Services in an unbundled and open electric services marketplace

Unbundling in the electric services industry (ESI) will result in greater diversity in customer services and service providers. Unbundling raises interesting questions for business and public policy-makers because it is neither a benign activity from the stand-point of efficiency or equity, nor, in certain circumstances, a desireable policy due to economic and technical constraints. This paper provides an overview of unbundling objectives and principles, and identifies key questions decision-makers should address in developing unbundling policies. A numerical example illustrates that value can be created when customers have hetereogenous needs for electric service attributes.