Energy Glossary

A fee paid by a user to a local distribution company for the ability to send or receive electricity or natural gas through its transmission or distribution systems.

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.

Necessary services that must be provided in the generation and transmission 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).

The cost a local distribution company would otherwise incur to generate power to buy the same amount of power if it did not purchase from a qualifying facility.

A process that compares actual customer gas use with the amount of natural gas delivered to a local distribution company during a special time period (e.g., daily or monthly). The differences (either over or under) between these two amounts are called imbalances.

The minimum amount of electric power delivered or required over a given period of time at a steady amount.

The generating level of output that is usually operated to serve loads on an around-the-clock basis.

The abbreviation for one billion cubic feet of natural gas is equivalent to one million Mcf.

An entity arranges the sale and purchase of electric energy, transmission, and other services between buyers and sellers. Still, it does not take title to any of the power sold and is sometimes referred to by energy suppliers as a channel partner.

A standard unit for measuring the quantity of heat energy equal to the amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit.

All generation, transmission and distribution services are provided by one entity for a single charge. This would include ancillary services, transmission, capacity, energy supply and related services.

A situation that allows a customer to purchase full or partial electricity or natural gas service from a non-utility supplier instead of a local distribution company.

Reserve generation (in MW) is typically based on the highest hour or based on the average of several peak hours of use over a term.

The cost of commodity (natural gas or electricity) and related charges to deliver it to the marketplace.

Typically assessed during the transition period between a traditional monopoly construct and a competitive model. A non-bypassable charge is levied on each distribution utility customer, including those served under contracts with non-utility suppliers, for recovery of a utility’s transition costs.

A characteristic of the power grid is produced by a constraint on the optimum economic operation of the power system, such that the marginal price of energy to serve the next increment of load, exclusive of losses, at different locations on the transmission grid.

Traditional electric utility regulation under which a utility is allowed to set rates based on the cost of providing services to customers and the right to earn a guaranteed profit.

Any person that is an end user of electricity or natural gas and is connected to any part of the delivery system within a local electric or natural gas utility service territory within this state.

Charge billed each month to recover a portion of the ongoing fixed costs of providing service to a consumer’s home or business.

The opportunity for a retail electric or natural gas customer to choose who supplies their electric or natural gas.

The forward market for energy and ancillary services is to be supplied during the settlement period of a particular trading day conducted by the Independent System Operator (ISO), the power exchange, and/or other Scheduling Coordinators. This market closes with the ISO’s acceptance of the final day-ahead schedule.

A schedule is prepared by a Scheduling Coordinator or the Independent System Operator before the beginning of a trading day. This schedule indicates the levels of generation and demand scheduled for each settlement period that trading day.

The amount of natural gas that a well, production field, pipeline or distribution system can deliver in a given period.

The charge for delivering natural gas or electricity to homes and businesses including the cost of government-mandated programs designed to achieve public policy goals, such as energy conservation.

Owners and/or operators of transmission and distribution system equipment who provide billing and related energy services for the transmission and delivery of electricity.

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 (typically measured in kW or MW).

A bid into the Day-Ahead market indicates a quantity of energy or an ancillary service that an eligible customer is willing to purchase and, if relevant, the maximum price that the customer is willing to pay.

Charge based on the rate at which electricity is delivered to your system at a particular instant or averaged over a designated period in the billing cycle.

The planning, implementation, and monitoring of utility activities designed to encourage consumers to modify patterns of electricity usage, including the timing and level of electricity demand. It refers only to energy and load-shape modifying activities that are undertaken in response to utility-administered programs. It does not refer to energy and load-shape changes arising from the regular operation of the marketplace or government-mandated energy-efficiency standards. Demand-Side Management (DSM) covers the complete range of load-shape objectives, including strategic conservation and load management, as well as strategic load growth.

The ability of a retail customer to purchase commodity electricity directly from the wholesale market, rather than through a local distribution utility.

On-site, customer-owned renewable power systems, such as solar panels or wind turbines, that supply a portion or all of a customer’s electricity requirements. These systems are typically connected to the power grid and can send excess electricity into the grid.

The delivery of electricity to homes and businesses over the local poles and wires, transformers, substations and other equipment. This function remains regulated by the PUCO.

The portion of an electric system that is dedicated to delivering electric energy to an end user.

A statement of the electric rate and the terms and conditions governing its application, including attendant contract terms and conditions that have been accepted by a regulatory body with appropriate oversite authority.

An entity that provides electric service to a retail or end-use customer. Sometimes called an ESCO, an ARES, a CES, a TPS, an EGS, an ES, a REP, a CRES, an AES, and/or an ESP depending on the state. This list is not all inclusive, there are several other names/abbreviations used as well.

An electric power company, often referred to as a public utility, which engages in the generation, transmission, distribution and sale of electricity.

A network of transmission and distribution lines, substations and transformers that delivers electricity to consumers.

The amount of electricity being consumed at any given time. Demand rises and falls throughout the day in response to the time of day and other environmental factors.

The process of producing electricity using a natural resource or a renewable source, such as coal, natural gas, nuclear energy, solar, wind, water or biomass.

On your electricity bill, this is the amount of electricity used in a billing cycle, measured in kilowatt-hours (kWh).

Alternative means of generating electricity used only during temporary interruptions of normal power supply.

The capacity for doing work is 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 to accomplish tasks. Electrical energy is usually measured in kilowatt-hours, while heat energy is usually measured in British thermal units.

A portion of your total charge for electricity service; the total number of kilowatt-hours consumed within the billing cycle times the price you pay per kWh.

Using less energy to provide the same level of performance, comfort and convenience. The goal of energy efficiency is to reduce energy use, which may result in cost savings and the conservation of natural resources.

Power marketers or other electricity vendors who provide an unbundled service and bill for only the energy component of the electricity consumed by the end-use customer.

A non-utility business that provides gas or electric commodity or that installs energy efficient and other demand side management measures in facilities.

An independent federal agency that regulates the interstate transmission of natural gas, oil and electricity.

Gas sold on a continuous and generally long-term contract.

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.

Costs that do not vary in relation to the amount of service provided.

Charge billed each month to recover a portion of the ongoing fixed costs of providing service to a consumer’s home or business.

An all-inclusive per kWh price that will remain the same for at least three billing cycles or the term of the contract, whichever is longer.

An economic incentive rate designed by the New York State Public Service Commission that allows a local distribution company to negotiate discounted costs with industrial or large commercial customers.

The actual cost of natural gas that a local distribution company (LDC) pays to purchase natural gas for your use. That cost is then passed through to you on a dollar-for-dollar basis with no mark-up or profit to the LDC. Only the actual costs of the natural gas are recovered through this process.

The actual production of electricity in a power plant.

The charge for producing electricity. If you purchase electricity from a supplier, your generation charge will depend on the contract between you and your supplier.

Energy that can be extracted, generated and/or consumed without any significant negative impact to the environment. Production of green power typically comes from “renewable” or environmentally friendly sources, such as hydro, wind and solar.

The transmission network or transportation lines over which electricity travels from the electric supplier to the local electric utility to the consumer.

A company other than a utility that generates electricity. Also referred to as a non-utility supplier.

An independent entity that controls and monitors a grid, coordinating the generation and transmission of electricity to ensure a reliable power supply to consumers.

Gas sold to customers with a provision that permits curtailment or cessation of service at the discretion of the distributing company under certain circumstances, as specified in the service contract.

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 the 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 the 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 operating reserve requirements should be reported as Interruptible Load. Interruptible Load as defined here excludes Direct Load Control and Other Load Management. (Interruptible Load, as reported here, is synonymous with Interruptible Demand reported to the North American Electric Reliability Council on the voluntary Form EIA-411, “Coordinated Regional Bulk Power Supply Program Report,” with the exception that annual peak load effects are reported on the Form EIA-861 and seasonal (i.e., summer and winter) peak load effects are reported on the EIA-411).

A meter which records energy consumption for each hour of the day during a billing period.

For new customers, an all-inclusive per kWh price that will remain the same for a limited period of time between one and three billing cycles followed by a different fixed or variable per kWh price that will be in effect for the remaining billing cycles of the contract term, consistent with terms and conditions in the supplier’s ‘disclosure statement.

Public utilities owned by shareholders. Investor-owned utilities serve about three-quarters of all electricity customers.

A 1,000-watt unit of energy.

A 1,000-watt unit of energy for one hour. This is the standard measurement for the amount of electricity a customer uses.

Locational Forward Reserve – Locational market to acquire forward commitments for ten and thirty-minute reserves.

Locational Marginal Price – Locational Marginal Price. An hourly price value which may be RT or DA and which varies by region and/or zone.

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.

An estimate of the level of future energy needs.

Utility activities designed to influence the timing and amount of electricity that customers may use.

An area served by local generators when the existing transmission system cannot import sufficient power to meet local demand.

Customer usage pattern.

A type of load management that shifts use from peak to off-peak periods, such as using storage water heating and space heating.

The local natural gas distribution utility that delivers natural gas to your home or business.

The company that delivers your electricity or natural gas to your home or business. This does not change if you choose to procure energy from a third party supplier.

The price at which supply equals demand for the Day-Ahead and/or Real-Time Markets.

The price of electricity or natural gas in a particular market.

Electric service prices are 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.

The greatest of all demands of the load that has occurred within a specified period of time.

One thousand cubic feet.

One million watts.

One million watt-hours.

A device that measures the amount of electrical energy consumed by a residence, business or an electrically powered device. Utility companies (or TDSPs) read meters to determine how much electricity each customer used. Types of electricity meters include digital meters and smart meters.

One million cubic feet.

One seller of electricity with control over market sales.

A utility owned and operated by a city or town and usually regulated by a local governing body.

North American Electric Reliability Corporation – Develops and enforces reliability standards; monitors the bulk power system; assesses future adequacy; audits owners, operators, and users for preparedness; educates personnel.

Network Integrated Transmission Service – Service used to transport power across a transmission system to serve customers.

A company that generates power for sale but is exempt from traditional utility regulation.

A regulatory mandate to allow others to use a utility’s transmission and distribution facilities to move bulk power from one point to another on a non-discriminatory basis for a cost-based fee.

To affirmatively participate in a program from which the customer would be automatically excluded unless the customer affirmatively indicated the intention to participate.

To affirmatively indicate a choice not to participate in a program in which the customer would be automatically included unless the customer affirmatively indicated the intention not to participate.

The maximum load during a specified period of time.

Business entities engaged in buying, selling, and marketing electricity. Power marketers may or may not own generating 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.

An association of two or more interconnected electric systems having an agreement to coordinate operations and planning for improved reliability and efficiencies.

The price for an electric supplier to beat in order for you to save money. It will be shown on residential customer’s electric utility bill. You can use this amount to compare with prices offered by suppliers.

To calculate proportionately across a billing cycle when a component(s) of the bill change during the billing cycle.

In a purchase of receivables (“POR”) program, the utility purchases the receivables of a retail supplier at a discount rate equal to the utility’s actual uncollectible rate percentage. This discount rate is then offset from the monthly payments the utility makes to the retail supplier and is subject to a periodic reconciliation process.

The amount you pay for your electricity is the rate, and it is usually an amount per kilowatt hour (kWh).

The value of capital investment upon which a utility is permitted to earn a specified rate of return as established by a regulatory authority. The rate base generally represents the value of capital used by the utility in providing service and may be calculated by anyone or a combination of the following accounting methods: fair value, prudent investment, reproduction cost, or original cost. Depending on which method is used, the rate base includes cash, working capital, materials and supplies, and deductions for accumulated provisions for depreciation, contributions in aid of construction, customer advances for construction, accumulated deferred income taxes, and accumulated deferred investment tax credits. In restructured (competitive) markets, utilities typically no longer place generating assets into the rate base.

A utility commission’s legal authority to fix, modify, approve or disapprove rates, as determined by the powers given the commission by a State or Federal legislature.

Renewable energy credit (REC) — also referred to as a renewable energy certificate — is created for each megawatt-hour (1 MWh, or 1000 kilowatt-hours) of renewable electricity generated and delivered to the power grid. RECs are how these environmental benefits are tracked and accounted for.

An organization that is responsible for moving electricity over large interstate areas. An RTO coordinates, controls and monitors an electricity transmission grid that is larger with much higher voltages than the typical power company’s distribution grid.

The governmental function of controlling or directing economic entities through the process of rulemaking and adjudication.

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.

An energy source that provides an alternative to oil, gas or coal for the generation of electricity.

The percentage of the contracted generation supply that is provided by a renewable energy source.

Electricity or natural gas that is made from environmentally friendly fuel resources, such as wind, water, biomass, biogas, waste heat or solar. Sometimes referred to as “green” energy.

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 restructuring of the vertically integrated electric utility.

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.

The ability of retail customers to shop for electric generation or natural gas supply service, and to choose the supplier that will provide their electricity or natural gas.

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.

A market in which electricity and other energy services are sold directly to the end-use customer.

Retail Load Responsibility – Load that a supplier is responsible for supplying in a particular zone of an electric distribution company.

Reliability Must Run – Resources that are required to run out of merit by an ISO to maintain system reliability.

Discontinuation of utility service.

Switching electric or natural gas service to another supplier without a customer’s consent.

A type of electricity meter that has continuously available, remote, two-way communication and information storage capability. Smart meters record and store your electrical usage in 15-minute intervals and communicate that usage information back to your local wires company. Unlike traditional electric meters that only measure total consumption, smart meters show when the energy was consumed.

The electric generation service a customer will receive from their local electric utility if they do not choose an electric supplier.

The placement of utility-owned gas in underground facilities during the summer, when demand is low, that is withdrawn for the winter when gas consumption is higher.

Prudent costs that a utility has an obligation to pay for (e.g., long-term contracts or payments on a generation plant) that may not be recoverable due to obsolescence or market changes.

A non-interval meter that records total energy consumed over a billing period (sometimes max. demand as well) but not on an hour-by-hour basis.

The company that you can choose to provide the generation portion of your electricity or the supply portion of your natural gas service.

Under this billing method, a single customer bill is issued to a customer of a Third-Party Supplier. It includes the supply charges of the Third-Party Supplier as well as the distribution charges of the Electric and/or Gas Utility, for which a single payment from the customer is expected. This is generally done by the Utility.

The price of electricity or natural gas offered by a supplier.

A contract between a competitive retail electric service provider or competitive retail natural gas service provider and a customer that outlines fees, length of service and other important information.

The transporting of high-voltage electricity from generation at a power plant to local electric utilities.

The local wires company responsible for the poles and wires that transmit and deliver electricity to your home or business. TDSPs are responsible for the maintenance and repair of these poles and wires.

Charge for transporting electricity from the generation plant to the local electric utility.

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.

This is a regulated entity that owns and may construct and maintain wires used to transmit wholesale power. It may or may not handle the power dispatch and coordination functions. It is regulated to provide non-discriminatory connections, comparable service, and cost recovery. According to EPACT, this includes any electric utility, qualifying cogeneration facility, qualifying small power production facility, or Federal power marketing agency which owns or operates electric power transmission facilities which are used for the sale of electric energy at wholesale.

Cost related to the actual transportation of natural gas through the natural gas transmission pipeline to the LDC.

The separating of the total process of electric power service into it’s components such as generation, capacity, ancillaries, transmission, delivery, metering, etc. for the purpose of separate pricing or service offerings.

The amount of electricity you used during a specified billing period listed in kilowatt-hours (kWh). This is listed on your electric bill as kWh used.

In a market with Utility Consolidated Billing (“UCB”), the utility offers an option to retail suppliers in which it provides, for a fee, a single bill to the customer that includes both the utility’s delivery charges and the retail supplier’s supply charges. A retail supplier’s supply charges, included on the consolidated bill, are sent to the utility via electronic communication. The utility performs all regular billing and payment processing functions that it performs for customers on utility supply. The utility then forwards customer payments for the retail supplier supply portion of the consolidated bill to the retail supplier. The utility recovers the cost of UCB through fees assessed to the retail supplier.

The entities that will continue to provide regulated services for electricity distribution to customers and serve customers who do not choose direct access. Regardless of where a consumer decides 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. Sometimes called an Electric Distribution Company (EDC).

An all-inclusive per kWh price that can change, by the hour, day, month, etc., according to the terms and conditions in the supplier’s disclosure statement.

A system whereby a distributor of power (such as a municipal utility or a coop or an EDC) would have the option to buy its power from a variety of wholesale power producers. The wholesale power producers would be able to compete to sell their power to a variety of companies.

Entities that purchase electricity or natural gas in bulk for resale to end-use customers. Examples include municipal utilities and rural electric cooperatives.

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.

Energy supplied to other electric utilities, cooperatives, municipals and Federal and State electric agencies for resale to ultimate consumers.

A broad term that refers to charges levied on power suppliers or their customers for the use of the transmission or distribution wires.