Regardless of the underlying reasons or motivations for beginning the unbundling process, the objectives of restructuring tend to focus on three main areas:
- improving efficiency and arriving at lower prices than they would have been otherwise: creation of a competitive marketplace for wholesale electricity (generators) and retail services (suppliers) has the objective of improving efficiency and reducing costs to end users. The use of performance-based ratemaking for monopoly businesses at the wires level (distribution and transmission) mimics competitive pressures of an open marketplace and contributes to reducing end-user costs by constraining the price increases of distribution and transmission services;
- providing a reasonable opportunity to earn a return on investment: earning a return on investment ensures that companies are financially sustainable and able to meet their financial and operational obligations. This is critical to the ability to continue to mobilize investment. Companies must be able to earn a return on their investments via competitive markets (generation and retail services) or as regulated monopolies (transmission and distribution networks); and
- providing reliable electric service to customers: restructuring efforts need to balance the objective of affordability with ensuring the provision of reliable electric service to customers through reliability standards, often including reliability and customer service performance standards and incentive schemes.
