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The deregulation process has faced many difficulties and various problematic sectors are still being explored and resolved [1–5]. A business model describes the strategy by which an organization creates, delivers, and captures values. A suitable business model articulates the value created to users by using the product or service. It also identifies the market segment, defines the value chain to estimate the cost structure and profit earning ability, judges the position of the firm with respect to other competitors, and provides the competitive strategy to the firm to build up its identity. Because after manufacture a product is sold in a market, after being generated electricity is also sold like a market product. Hence a business model is also necessary for electricity distribution in order to articulate its value position. The process of delivery of electrical energy from the point of its generation up to the point of consumption needs a business strategy in each and every step of its production. The major parts of the business in the electrical sector lie with generation, transmission, and distribution processes. Of these three major business procedures in the power sector, distribution is the most growing concern sector in the smart grid environment, where the motivation to hold a business model is to be found in each and every step of the job needed to carry out the task of power distribution among consumers. In the power distribution sector the major functions lies with:

 Infrastructure creation and its operation and maintenance.

 Creation of an organizational structure.

 Collection of big data and its analysis.

 Policy framing and framing different processes.

 Managing work, asset, and demand.

 Developing different models related to finance, business, system, and technology.

 Pricing, billing, collection, and awareness related activities.

An opportunity exists for a distinct business model for each of the above activities. Hence there is an essential need to find a suitable business model that will divide all the above actions into a distinct business. As the major concern of the changes under smart grid initiatives exists in the power distribution sector and the varieties of these changes are large in number corresponding to their required expertise, a suitable business model for the power distribution sector is an utmost requirement to ensure smart grid implementation.

Various forms of business models adopted to carry out the task of power distribution across various parts of the globe have been summarized along with their merits and demerits. Considering the various functions and the various issues or challenges present in the power distribution sector under a smart grid environment, a new business model described by Jamasb, Thakur, and Bag [6] that has not been adopted by any utility is also discussed in this chapter. This new business model is expected to overcome all the challenges present while fulfilling all future desires of the power distribution sector.