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Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Aggregator
Any marketer, broker, public agency, city, county, or special district that combines the loads of multiple end-use customers in facilitating the sale and purchase of electric energy, transmission, and other services on behalf of these customers.
Ancillary Services
Necessary services that must be provided in the generation and delivery of electricity. As defined by the Federal Energy Regulatory Commission, they include: coordination and scheduling services (load following, energy imbalance service, control of transmission congestion); automatic generation control (load frequency control and the economic dispatch of plants); contractual agreements (loss compensation service); and support of system integrity and security (reactive power, or spinning and operating reserves).
Baseload
The minimum amount of electric power delivered or required over a given period of time at a steady rate.
Baseload Capacity
The generating equipment normally operated to serve loads on an around-the-clock basis.
Bcf
The abbreviation for 1 billion cubic feet.
Broker
An entity that arranges the sale and purchase of electric energy, transmission, and other services between buyers and sellers, but does not take title to any of the power sold.
Btu (British Thermal Unit)
A standard unit for measuring the quantity of heat energy equal to the quantity of heat required to raise the temperature of 1 pound of water by 1 degree Fahrenheit.
Bundled Utility Service
All generation, transmission, and distribution services provided by one entity for a single charge. This would include ancillary services and retail services.
Capacity
The amount of electric power delivered or required for which a generator, turbine, transformer, transmission circuit, station, or system is rated by the manufacturer.
Capacity Charge
An element in a two-part pricing method used in capacity transactions (energy charge is the other element). The capacity charge, sometimes called Demand Charge, is assessed on the amount of capacity being purchased.
Co-generator
A generating facility that produces electricity and another form of useful thermal energy (such as heat or steam), used for industrial, commercial, heating, or cooling purposes.
Commercial Customer
The commercial sector is generally defined as non-manufacturing business establishments, including hotels, motels, restaurants, wholesale businesses, retail stores, and health, social, and educational institutions. The utility may classify commercial service as all consumers whose demand or annual use exceeds some specified limit. The limit may be set by the utility based on the rate schedule of the utility.
Competitive Power Supplier
A competitive power supplier (also known as an electricity supplier, power producer, power generator, power seller, power marketer or power broker) is a company or group that sells electricity.
Competitive Transition Charge
A non-by passable charge levied on each customer of a distribution utility, including those who are served under contracts with non-utility suppliers, for recovery of a utility's transition costs.
Congestion
A condition that occurs when insufficient transfer capacity is available to implement all of the preferred schedules for electricity transmission simultaneously.
Consumer Choice
Allowing all customers to purchase kilowatthours of electricity from any of a number of companies that compete with each other.
Consumption (Fuel)
The amount of fuel used for gross generation, providing standby service, start-up and/or flame stabilization.
Contract Price
Price of fuels marketed on a contract basis covering a period of 1 or more years. Contract prices reflect market conditions at the time the contract was negotiated and therefore remain constant throughout the life of the contract or are adjusted through escalation clauses. Generally, contract prices do not fluctuate widely.
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Day-Ahead Market
The forward market for energy and ancillary services to be supplied during the settlement period of a particular trading day that is conducted by the applicable Independent System Operator, the power exchange, and other Scheduling Coordinators. This market closes with the Independent System Operator's acceptance of the final day-ahead schedule.
Demand
The rate at which electric energy is delivered to or by a system, part of a system, or piece of equipment, at a given instant or averaged over any designated period of time.
Deregulation
The elimination of regulation from a previously regulated industry or sector of an industry.
Disclosure Label
A disclosure label is a standard format of information detailing a competitive power supplier's prices, the terms of their contract with a customer, the types of power sources used, their air emissions and their labor practices. The same format is to be used by every supplier and distribution company, making it easier to compare the various offers.
Distribution Company
A distribution company, formerly known as an electric utility company, is the local company that delivers electricity to your home or business. Your distribution company will continue to read your meter, maintain local wires and poles, and restore your power in the event of an outage.
Distribution System
The portion of an electric system that is dedicated to delivering electric energy to an end user.
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Electric Plant
A facility containing prime movers, electric generators, and auxiliary equipment for converting mechanical, chemical, and/or fission energy into electric energy.
Electric Service Provider
An entity that provides electric service to a retail or end-use customer.
Electric Utility
A corporation, person, agency, authority, or other legal entity or instrumentality that owns and/or operates facilities within the United States, its territories, or Puerto Rico for the generation, transmission, distribution, or sale of electric energy primarily for use by the public and files forms listed in the Code of Federal Regulations, Title 18, Part 141. Facilities that qualify as cogenerators or small power producers under the Public Utility Regulatory Policies Act (PURPA) are not considered electric utilities.
Energy
The capacity for doing work as measured by the capability of doing work (potential energy) or the conversion of this capability to motion (kinetic energy). Energy has several forms, some of which are easily convertible and can be changed to another form useful for work. Most of the world's convertible energy comes from fossil fuels that are burned to produce heat that is then used as a transfer medium to mechanical or other means in order to accomplish tasks. Electrical energy is usually measured in kilowatt hours, while heat energy is usually measured in British thermal units.
Energy Charge
That portion of the charge for electric service based upon the electric energy (kWh) consumed or billed.
Energy Source
The primary source that provides the power that is converted to electricity through chemical, mechanical, or other means. Energy sources include coal, petroleum and petroleum products, gas, water, uranium, wind, sunlight, geothermal, and other sources.
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Federal Energy Regulatory Commission (FERC)
A quasi-independent regulatory agency within the Department of Energy having jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, oil pipeline rates, and gas pipeline certification.
Federal Power Act
Enacted in 1920, and amended in 1935, the Act consists of three parts. The first part incorporated the Federal Water Power Act administered by the former Federal Power Commission, whose activities were confined almost entirely to licensing non-Federal hydroelectric projects. Parts II and III were added with the passage of the Public Utility Act. These parts extended the Act's jurisdiction to include regulating the interstate transmission of electrical energy and rates for its sale as wholesale in interstate commerce. The Federal Energy Regulatory Commission is now charged with the administration of this law.
Firm Power
Power or power-producing capacity intended to be available at all times during the period covered by a guaranteed commitment to deliver, even under adverse conditions.
Forced Outage
The shutdown of a generating unit, transmission line or other facility, for emergency reasons or a condition in which the generating equipment is unavailable for load due to unanticipated breakdown.
Fuel
Any substance that can be burned to produce heat; also, materials that can be fissioned in a chain reaction to produce heat.
Futures Market
Arrangement through a contract for the delivery of a commodity at a future time and at a price specified at the time of purchase. The price is based on an auction or market basis. This is a standardized, exchange-traded, and government regulated hedging mechanism.
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Gas
A fuel burned under boilers and by internal combustion engines for electric generation. These include natural, manufactured and waste gas.
Generation
The process of producing electric energy by transforming other forms of energy; also, the amount of electric energy produced, expressed in watthours (Wh).
Generation Company
A regulated or non-regulated entity (depending upon the industry structure) that operates and maintains existing generating plants. The generation company may own the generation plants or interact with the short-term market on behalf of plant owners. In the context of restructuring the market for electricity, the generation company is sometimes used to describe a specialized "marketer" for the generating plants formerly owned by a vertically-integrated utility.
Generator
A machine that converts mechanical energy into electrical energy.
Gigawatt (GW)
One billion watts.
Gigawatthour (GWh)
One billion watthours.
Grid
The layout of an electrical distribution system.
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Hedging Contracts
Contracts which establish future prices and quantities of electricity independent of the short-term market. Derivatives may be used for this purpose.
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ICAP
Installed Capacity
Independent Power Producers
Entities that are also considered nonutility power producers in the United States. These facilities are wholesale electricity producers that operate within the franchised service territories of host utilities and are usually authorized to sell at market-based rates. Unlike traditional electric utilities, Independent Power Producers do not possess transmission facilities or sell electricity in the retail market.
Independent System Operators
An independent, Federally-regulated entity that coordinates regional transmission in a non-discriminatory manner and ensures the safety and reliability of the electric system.
Industrial
The industrial sector is generally defined as manufacturing, construction, mining agriculture, fishing and forestry establishments Standard Industrial Classification (SIC) codes 01-39. The utility may classify industrial service using the SIC codes, or based on demand or annual usage exceeding some specified limit. The limit may be set by the utility based on the rate schedule of the utility.
Intermediate Load
The range from base load to a point between base load and peak. This point may be the midpoint, a percent of the peakload, or the load over a specified time period.
Interruptible Load
Refers to program activities that, in accordance with contractual arrangements, can interrupt consumer load at times of seasonal peak load by direct control of the utility system operator or by action of the consumer at the direct request of the system operator. It usually involves commercial and industrial consumers. In some instances the load reduction may be affected by direct action of the system operator (remote tripping) after notice to the consumer in accordance with contractual provisions. For example, loads that can be interrupted to fulfill planning or operation reserve requirements should be reported as Interruptible Load.
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Kilowatt (kW)
One thousand watts.
Kilowatthour (kWh)
A kilowatt-hour (kWh) is the standard unit of measure for electricity. One kilowatt-hour is equal to 1,000 watt-hours. The total number of kilowatt-hours charged to your bill is determined by your electricity use.
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Load (Electric)
The amount of electric power delivered or required at any specific point or points on a system. The requirement originates at the energy-consuming equipment of the consumers.
Market-Based Pricing
Electric service prices determined in an open market system of supply and demand under which the price is set solely by agreement as to what a buyer will pay and a seller will accept. Such prices could recover less or more than full costs, depending upon what the buyer and seller see as their relevant opportunities and risks.
Market Clearing Price
The price at which supply equals demand for the Day Ahead and/or Hour Ahead Markets.
Maximum Demand
The greatest of all demands of the load that has occurred within a specified period of time.
Mcf
One thousand cubic feet.
Megawatt (MW)
One million watts.
Megawatthour (MWh)
One million watthours.
MMcf
One million cubic feet.
Municipal Utility
A municipal utility is a non-profit utility that is owned and operated by the community it serves. Whether or not a municipal utility is open to customer choice and competition is decided by the municipality's public officials.
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Natural Gas
A naturally occurring mixture of hydrocarbon and nonhydrocarbon gases found in porous geological formations beneath the earth's surface, often in association with petroleum. The principal constituent is methane.
Non-Firm Power
Power or power-producing capacity supplied or available under a commitment having limited or no assured availability.
Nuclear Power Plant
A facility in which heat produced in a reactor by the fissioning of nuclear fuel is used to drive a steam turbine.
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Off-Peak Gas
Gas that is to be delivered and taken on demand when demand is not at its peak.
Outage
The period during which a generating unit, transmission line, or other facility is out of service.
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Peak Demand
The highest 15- or 30-minute demand recorded during a 12-month period.
Peaking Capacity
Capacity of generating equipment normally reserved for operation during the hours of highest daily, weekly, or seasonal loads. Some generating equipment may be operated at certain times as peaking capacity and at other times to serve loads on an around-the-clock basis.
Petroleum
A naturally occurring, oily, flammable liquid composed principally of hydrocarbons. Crude oil is occasionally found in springs or pools but usually is drilled from wells beneath the earth's surface.
Planned Generator
A proposal by a company to install electric generating equipment at an existing or planned facility or site. The proposal is based on the owner having obtained (1) all environmental and regulatory approvals, (2) a signed contract for the electric energy, or (3) financial closure for the facility.
Power
The rate at which energy is transferred. Electrical energy is usually measured in watts. Also used for a measurement of capacity.
Power Exchange
The entity that will establish a competitive spot market for electric power through day- and/or hour-ahead auction of generation and demand bids.
Power Exchange Load
Load that has been scheduled by the power exchange and which is received through the use of transmission or distribution facilities owned by participating transmission owners.
Power Marketers
Business entities engaged in buying, selling, and marketing electricity. Power marketers do not usually own generating or transmission facilities. Power marketers, as opposed to brokers, take ownership of the electricity and are involved in interstate trade. These entities file with the Federal Energy Regulatory Commission for status as a power marketer.
Power Pool
An association of two or more interconnected electric systems having an agreement to coordinate operations and planning for improved reliability and efficiencies.
Price
The amount of money or consideration-in-kind for which a service is bought, sold, or offered for sale.
Pricing Options
Among the different competitive power suppliers there are several types of pricing options being offered. Some may charge the same price for every kilowatt-hour of electricity that you use; whereas others will charge different rates depending on the time of consumption or the amount consumed.
Provider of Last Resort
The Provider of Last Resort serves as the "back-up" provider when a Retail Electric Provider leaves the market for any reason. If this happens, customers may switch back to the Affiliate Retail Electric Provider or choose another competitive Retail Electric Provider offering electric service in their area.
Regulation
The governmental function of controlling or directing economic entities through the process of rulemaking and adjudication.
Reliability
Electric system reliability has two components--adequacy and security. Adequacy is the ability of the electric system to supply to aggregate electrical demand and energy requirements of the customers at all times, taking into account scheduled and unscheduled outages of system facilities. Security is the ability of the electric system to withstand sudden disturbances, such as electric short circuits or unanticipated loss of system facilities. The degree of reliability may be measured by the frequency, duration, and magnitude of adverse effects on consumer services.
Renewable Resources
Naturally, but flow-limited resources that can be replenished. They are virtually inexhaustible in duration but limited in the amount of energy that is available per unit of time. Some (such as geothermal and biomass) may be stock-limited in that stocks are depleted by use, but on a time scale of decades, or perhaps centuries, they can probably be replenished. Renewable energy resources include: biomass, hydro, geothermal, solar and wind. In the future, they could also include the use of ocean thermal, wave, and tidal action technologies. Utility renewable resource applications include bulk electricity generation, on-site electricity generation, distributed electricity generation, non-grid-connected generation, and demand-reduction (energy efficiency) technologies.
Reserve Margin
The amount of unused available capability of an electric power system at peakload for a utility system as a percentage of total capability.
Residential
The residential sector is defined as private household establishments which consume energy primarily for space heating, water heating, air conditioning, lighting, refrigeration, cooking and clothes drying. The classification of an individual consumer's account, where the use is both residential and commercial, is based on principal use. For the residential class, do not duplicate consumer accounts due to multiple metering for special services (water, heating, etc.). Apartment houses are also included.
Restructuring
The process of replacing a monopoly system of electric utilities with competing sellers, allowing individual retail customers to choose their electricity supplier but still receive delivery over the power lines of the local utility. It includes the reconfiguration of the vertically-integrated electric utility.
Retail
Sales covering electrical energy supplied for residential, commercial, and industrial end-use purposes. Other small classes, such as agriculture and street lighting, also are included in this category.
Retail Competition
The concept under which multiple sellers of electric power can sell directly to end-use customers and the process and responsibilities necessary to make it occur.
Retail Market
A market in which electricity and other energy services are sold directly to the end-use customer.
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Scheduled Outage
The shutdown of a generating unit, transmission line, or other facility, for inspection or maintenance, in accordance with an advance schedule.
Spot Purchases
A single shipment of fuel or volumes of fuel, purchased for delivery within 1 year. Spot purchases are often made by a user to fulfill a certain portion of energy requirements, to meet unanticipated energy needs, or to take advantage of low-fuel prices.
Steam-Electric Plant
A conventional electric plant in which the prime mover is a steam turbine. The steam used to drive the turbine is produced in a boiler where fossil fuels are burned.
Standard Offer Service(Massachusetts market)
A transition generation service that will be available to customers of record of each Distribution Company through 2004. A customer that did not select a competitive supplier as of March 1, 1998 automatically was placed on Standard Offer Service (customers who move into a Distribution Company's service territory after March 1, 1998 are not eligible to receive Standard Offer - these customers are placed on Default Service until they select a competitive supplier).
System
Physically connected electric generation, transmission, and distribution facilities operated as an integrated unit under one central management, or operating supervision.
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Transformer
An electrical device for changing the voltage of alternating current.
Transition Charge
The transition charge, also known as stranded costs, are the costs of past utility investments including power plants and power contracts. These charges were included in electric rates before competition. Because these costs cannot be fully recovered in a competitive market, stranded costs are temporary expenses that are included in the transition charge on your electric bill. These charges will be reduced over time.
Transmission
The movement or transfer of electric energy (at high voltage levels) over an interconnected group of lines and associated equipment between points of supply and points at which it is transformed for delivery to consumers, or is delivered to other electric systems. Transmission is considered to end when the energy is transformed for distribution to the consumer. This portion of the electric utility industry has not been opened to competition and will continue to be regulated by state and federal government.
Transmission System
An interconnected group of electric transmission lines and associated equipment for moving or transferring electric energy in bulk between points of supply and points at which it is transformed for delivery over the distribution system lines to consumers, or is delivered to other electric systems.
Turbine
A machine for generating rotary mechanical power from the energy of a stream of fluid (such as water, steam, or hot gas). Turbines convert the kinetic energy of fluids to mechanical energy through the principles of impulse and reaction, or a mixture of the two.
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UCAP (Unforced Capacity)
The measurement used to determine if a Participant has met their contribution to it's Installed Capacity Requirement.
UDC
Utility Distribution Company
Unbundling
The separating of the total process of electric power service from generation to metering into its component parts for the purpose of separate pricing or service offerings.
Usage
This is the amount of electricity you used during the billing period listed in kilowatt-hours (kWh). This will be listed on your electric bill as kWh used.
Utility Distribution Companies
The entities that will continue to provide regulated services for the distribution of electricity to customers and serve customers who do not choose direct access. Regardless of where a consumer chooses to purchase power, the customer's current utility, also known as the utility distribution company, will deliver the power to the consumer's home, business, or farm.
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Watt
The electrical unit of power. The rate of energy transfer equivalent to 1 ampere flowing under a pressure of 1 volt at unity power factor.
Watthour (Wh)
An electrical energy unit of measure equal to 1 watt of power supplied to, or taken from, an electric circuit steadily for 1 hour.
Wholesale Power Market
The purchase and sale of electricity from generators to resellers (who sell to retail customers), along with the ancillary services needed to maintain reliability and power quality at the transmission level.