Glossary
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, transmissions, and other services on behalf of these customers.
Ancillary services
Those services necessary to support the transmission of energy from resources to loads while maintaining reliable operation of the transmission provider's transmission system.
Base load
The minimum load over a given period of time (see Load for further information).
Biomass
The amount of living matter in a given unit of the environment. Also, a variety of organic fuel sources that can be either processed into synthetic fuels or burned directly to produce steam or electricity.
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.
Bundled utility service
All generation (energy), transmission, and distribution (delivery) services provided by one entity as a single service, including ancillary and retail services.
Capacity charge
That portion of the charge for electric service based upon the electric capacity (kW or kVa) consumed and billed on the basis of billing demand under an applicable rate schedule.
Coincident
The sum of two or more demands that occur in the same demand interval.
Commercial
An energy-consuming sector that consists of services providing facilities and equipment for non-manufacturing businesses. Common uses of energy associated with this sector include space heating, water heating, air conditioning, lighting, refrigeration, cooking, and running a wide variety of other equipment. Commercial customers can be classified as a function of energy demand or annual usage, which meets some specified limit set by the energy provider.
Competitive Transition Assessment (CTA)
The part of a customer's electric bill that allows the electric distribution company to recover stranded costs. Also referred to as Competitive Transition Charge (CTC).
Congestion
A condition that occurs when insufficient transfer capacity is available to simultaneously implement all of the preferred schedules for electricity transmission.
Cooperative, rural electric (co-op)
An electric utility legally established to be owned by and operated for the benefit of those using its service. The utility company will generate, transmit, and/or distribute electric energy to a specified area not being serviced by another utility. Such ventures are generally exempt from Federal income tax laws. Most electric cooperatives have been initially financed by Utilities Service (prior Rural Electrification Administration), U.S. Department of Agriculture.
Customer charge
An amount to be paid periodically by a customer for electric service, often based on costs incurred for metering, meter reading, billings, etc., exclusive of demand or energy consumption.
Customer choice
Allowing certain customers to purchase electricity from alternative competitive suppliers.
Default service
Under customer choice, the local distribution company will provide service to a customer who is not eligible for Standard Offer Service, or has not chosen, or is unable to choose, an alternative energy service provider (ESP), or whose ESP has ceased to provide service to that customer (this might occur when a customer's ESP goes out of business, or when a customer does not pay his/her electric bill or make other billing arrangements).
Demand
The rate at which electricity is being used at any one given time (or averaged over any designated interval of time). Demand differs from energy use, which reflects the total amount of electricity consumed over a period of time. Demand is often measured in kilowatts (kW = 1 kilowatt =1000 watts), while energy use is usually measured in kilowatt hours (kWh = kilowatts x hours of use = kilowatt hours). The term "load" is considered synonymous with demand. Load also can be defined as an end-use energy-consuming piece of equipment or customer that receives power from the electric system. Using this definition of load, demand is the measure of power that a load receives or requires.
Deregulation
The elimination of regulations from previously regulated industry or sector of an industry.
Direct access
The ability of a retail customer to purchase electricity directly from the wholesale market rather than through a local distribution utility.
Distribution
The process of delivering electricity from points on the transmission system to consumers.
Electric distribution company
The utilities that provide regulated services for the distribution of electricity to customers and serve customers who do not choose direct access.
Electric supplier
An entity (including an electric aggregator or participating municipal electric utility) licensed to provide electric generation services to customers. With electric choice, customers can choose their electric supplier. The customer's electric distribution company then delivers the power.
Energy charge
That portion of the charge for electric service based on the electric energy (kWh) consumed or billed.
Fixed costs
Costs that do not change or vary with usage, output, or production.
Future
A contract to buy or sell a specific quantity of securities or commodities for a specific price or yield on a specified future date.
Generation
The act or process of transforming other forms of energy into electric energy, expressed in kilowatt hours.
Grid
An interconnected network of electric transmission lines and related facilities.
Independent Power Producer (IPP)
Power generators that are not affiliated with a vertically integrated utility.
Independent System Operator (ISO)
An independent, federally regulated control area operator with the primary responsibility of ensuring short-term reliability of the transmission grid. An ISO performs essentially the same functions as a Regional Transmission Organization (RTO), but may not have the same requirements for regional configuration as an RTO.
Industrial
An energy-consuming sector that consists of all manufacturing facilities and equipment used for producing, processing, or assembling goods. The industrial sector encompasses the following types of activities: manufacturing; agriculture, forestry, and fisheries; mining; and construction. Overall, energy use in this sector is largely for process heat and cooling and powering machinery, with lesser amounts used for facility heating, air conditioning, and lighting. Fossil fuels are also used as raw material inputs to manufactured products. This sector could include energy deliveries to large commercial customers, and could exclude deliveries to small industrial customers, which might be included in the commercial sector. It also could classify by using the North American Industry Classification System (NAIC) or on the basis of energy demand or annual usage exceeding some specified limit set by the energy provider.
Investor-owned electric utility (IOU)
A privately-owned electric utility whose stock is publicly traded. It is rate regulated and authorized to achieve a certain rate of return.
Kilowatt (kW)
One kilowatt equals 1,000 watts.
Kilowatt-hour (kWh)
The basic unit of electric energy equal to one kilowatt of power supplied to or taken from an electric circuit steadily for one hour. One kilowatt-hour equals 1,000 watt hours.
Load
The term "load" is considered synonymous with demand. Load also can be defined as an end-use device or an end-use customer that consumes power. Using this definition of load, demand is the measure of power that a load receives or requires.
Load profile
Shows the quantity of energy used by a class of customers at specific time intervals over a 24-hour period.
Market-based rates
Rates for services that are established through individual negotiations between the buyer and seller, or established in short-term competitive spot markets, in absence of government price caps or controls. FERC has increasingly allowed wholesale generators to charge market based rates when they can show that they do not have market power.
Marketer
An agent who markets power on behalf of the generator. The marketer may also arrange transmission or other ancillary services as needed. Though a marketer might perform many of the same functions as a broker, the difference is that a marketer represents the generator while a broker acts as a middleman.
Megawatt (MW)
One megawatt equals one million watts.
Megawatt-hour (MWh)
One megawatt-hour equals one million watt hours.
Municipally owned electric system
An electric utility system owned and operated by a city, county, irrigation district, drainage district, or a political subdivision or agency of a state competent under the laws thereof to carry on the business of developing, transmitting, or distributing power usually, but not always, providing service within the boundaries of the municipality.
Off-peak energy
Energy supplied during periods of relatively low system demands as specified by the supplier.
On-peak energy
Energy supplied during periods of relatively high system demands as specified by the supplier.
Open access transmission
A condition where transmission service is offered to anyone who requests it.
PJM Interconnection
The regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia.
Peak demand
The greatest demand during a specified period of time.
Power
The time rate of generating, transferring, or using electric energy, usually expressed in kilowatts (kW).
Power 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.
Power marketer
Business entity that engages in buying, selling and marketing electricity in the wholesale markets. Power marketers, unlike power brokers, take title to the electricity. Power marketers that sell electricity for resale at wholesale prices are considered to be public utilities under the Federal Power Act.
Public utilities commission (PUC)
A name commonly used for the state regulatory agency that governs retail utility rates and practices and, in many cases, issues approvals for the construction of new facilities. There are regulatory commissions in all 50 states, as well as the District of Columbia, Puerto Rico, and the Virgin Islands. The state commissions generally vary in size from three to seven members, and most states provide that state governors shall appoint commissioners. In some states, commissioners are elected. Also called Public Service Commission or Board of Public Utilities.
Real-time pricing
A method of charging for energy that changes the price at irregular times as the cost of generation changes. It is accompanied by some form of communications system that informs customers of the current price as that price is changing, so that the customers have the opportunity to alter their usage in response to price changes.
Regional Transmission Organization (RTO)
A utility industry group that is responsible for transmission planning and use on a regional basis.
Residential
An energy-consuming sector that consists of living quarters for private households. Common uses of energy associated with this sector include space heating, water heating, air conditioning, lighting, refrigeration, cooking, and running a variety of other appliances. The residential sector excludes institutional living quarters. This sector may exclude deliveries or sales to apartment buildings or homes on military bases (these buildings or homes may be included in the commercial sector).
Retail
Sales of electric energy to ultimate customers.
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 customer choice
Allowing certain customers to purchase electricity from alternative competitive suppliers.
Retail electric provider (REP)
An energy-only service, providing energy sales to ultimate customers, where delivery service is provided by a utility. Services may also include metering, billing, or power quality enhancement. Also referred to as alternative energy provider or energy service provider.
Solar power
Energy generated by the sun through the collection, transfer and storage of the sun's heat.
Tariff (tariff schedule)
A document filed with the regulatory authority(s) specifying lawful rates, charges, rules and conditions under which the utility provides service to the public.
Transmission
The act or process of transporting electric energy in bulk from a source or sources of supply to other principal parts of the system or to other utility systems. Also a functional classification relating to that portion of utility plant used for the purpose of transmitting electric energy in bulk to other principal parts of the system or to other utility systems, or to expenses relating to the operation and maintenance of transmission plant.
Unbundled customer
Customers provided energy (generation) and delivery (distribution) electric service by separate entities.
Wind energy
Energy produced by harnessing the force of the wind. In a wind energy conversion system such as a windmill, the energy of wind is used to turn the shaft of a generator, that in turn typically produces direct current. This direct current is usually converted to alternating current before being fed into a utility grid system.
(07/06/07)
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