The Act also unbundles, or separates, the different pieces of the electricity product from each other. For example, when you buy power, you are buying generation, transmission and distribution. Generation creates the power, transmission brings it to your area, and distribution brings it to your home or business. The only piece of the electricity product that you are now able to choose is generation. Generation is the creation of electricity through the burning of fuels or the use other energy sources.
Generation usually happens at a power plant.
Most power plants burn fossil fuels such as coal, oil or natural gas. Some power plants use nuclear energy. And, some electricity is generated from renewable resources such as solar power, wind, biomass, or the combustion of solid waste. Transmission is the process of transmitting, or moving, the electricity from the power plant to the local distribution facility. Sometimes electricity is transmitted over long distances.