An important evolution in the provision and consumption of electricity services is underway. Technological advances in information and communication technologies, demand response, distributed generation, energy storage, and advanced power electronics and control devices are creating new options for the provision of electricity services. A framework for proactive regulatory reform is needed to enable the efficient evolution of the power system, including improvements to the pricing of electricity services, incentives for distribution utilities, power sector structure, and electricity market design. With this framework in place, myriad consumers and producers of electricity services can make efficient choices based on accurate incentives reflecting the economic value of these services and their own diverse personal preferences.