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Energy Terms

Energy Terms

Let us shed some light on Energy Industry terminology.

We have supplied our customers with these energy terms to help them to educate them selves so they are aware of the “ins and outs” of their energy plan. With this information our customers can become energy experts, making wiser choices when it comes to the energy they use.

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  • Above-Market Generation
    Electricity is considered Above-Market Generation when production costs are higher than prevailing market prices.
  • Actual Peak Load Reductions
    The actual reduction in annual peak load (measured in kilowatts) achieved by consumers that participate in a utility Demand Side Management (DSM) program. It reflects the real changes in the demand for electricity resulting from a utility DSM program that is in effect at the same time the(...)
  • Advanced Metering Device
    This device is for recording or communicating actual electric use during minutes, hours, days or weeks useful for time-of-day, on-peak/ off peak or other billing rates.
  • Affiliated Retail Electric Provider
    A Retail Electric Provider (REP) that is owned, but separately operated, by a former monopoly electric utility.
  • Aggregator
    A group or organization that represents energy consumers to buy electricity or natural gas in a deregulated or restructured energy industry.
  • Alternating Current (AC or ac)
    An electric current which reverses direction repeatedly due to a change in voltage occurring at the same frequency.
  • Ampere Electric
    A current produced by one volt applied across a resistance of one ohm. It is also equal to the ow of one coulomb per second.
  • Ancillary Services
    Ancillary Services are 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(...)
  • Average Revenue per Kilowatt hour
    The average revenue per kilowatt-hour of electricity sold by sector (residential, commercial, industrial, or other) and geographic area (State, Census division, and national) is calculated by dividing the total monthly revenue by the corresponding total monthly sales for each sector and(...)
  • Avoided Cost
    The cost to the utility if it had generated or otherwise purchased the power. It is a benchmark price for energy services, used to compare resource alternatives. Avoided cost is the marginal long-term or short-term production cost that could be avoided by an alternative supply-side or(...)
  • Base Bill
    A charge calculated through multiplication of the rate from the appropriate electric rate schedule by the level of consumption.
  • Base Load Capacity
    The generating equipment normally operated to serve loads on an around-the-clock basis.
  • Base Load Plant
    A plant, usually housing high-efficiency steam-electric units, which is normally operated to take all or part of the minimum load of a system, and which consequently produces electricity at an essentially constant rate and runs continuously. These units are operated to maximize system(...)
  • Baseload
    The minimum amount of electric power delivered or required over a given period of time at a steady rate.
  • Basic Services
    Basic Services are services that are necessary for the physical delivery of service, including generation, transmission and distribution.
  • Basis
    Basis is the differential that exists between the future price for a given commodity and the Cash or Spot price for the same or related commodity. Basis may reflect different time periods, product forms, qualities or locations. Cash minus Futures equals Basis.
  • BCF
  • Bilateral Agreement
    Bilateral Agreement is a written statement signed by a pair of communicating parties that specifies what data may be exchanged between them.
  • Billion Cubic Feet
    Billion Cubic Feet
  • Biomass
    Biomass is an organic non-fossil material of biological origin constituting a renewable energy source such as energy derived from plants. Alcohol fuels are produced from wood, sugarcane and corn. Firewood, crop residue and cattle dung can also be burned.
  • British Thermal Unit
    British Thermal Unit (BTU) is a standard unit of energy which is a common measure of heating value for different fuels. One Btu is equal to the amount of heat required to raise the temperature of one pound of liquid water by 1 degree Fahrenheit at its maximum density, which occurs at a(...)
  • Broker
    A broker is a retail agent who arranges or negotiates for the purchase and sale of electricity or natural gas. Brokers usually act on the behalf of others and do not buy energy for their own end-use customers
  • BTU
    British Thermal Unit (BTU) is a standard unit of energy which is a common measure of heating value for different fuels. One Btu is equal to the amount of heat required to raise the temperature of one pound of liquid water by 1 degree Fahrenheit at its maximum density, which occurs at a(...)
  • Bulk Power Market
    Bulk Power Market is a market where wholesale purchases and sales of electricity are made.
  • Bundled Utility Service
    Bundled Utility Service is when all generation, transmission, and distribution services provided by one entity for a single charge. This would include ancillary services and retail services.
  • Burner tip
    Burner tip Refers to the location at which the gas is being consumed by the End-user. Generally off the local distribution company or gas utility system.
  • California Power Exchange
    The California Power Exchange Corporation (a.k.a. “CPX”), a State chartered, non-profit corporation charged with providing DayAhead and Hour-Ahead markets for energy and ancillary services, if it chooses to self-provide, in accordance with the power exchange tariff. The power exchange is a(...)
  • Capability
    Capability is the maximum load that a generating unit, generating station, or other electrical apparatus can carry under specified conditions for a given period of time without exceeding approved limits of temperature and stress.
  • Capacity
    Capacity is 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 (Purchased)
    Capacity (Purchased) is the amount of power available for purchase from outside the system to supply energy or capacity.
  • Capacity Charge
    Capacity Charge is 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.
  • Cash Market
    Cash Market is the market for a cash commodity where the actual physical product is traded (same as spot market).
  • CCF
    CCF is a unit of measure of natural gas. It is approximately the energy equivalent of burning 100 cubic feet of natural gas
  • City Gate
    The City Gate is the location where natural gas transfers from the interstate gas pipeline to the local utility’s distribution system.
  • Co-Generator
    A  co-generator is 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.
  • Co-Op
    Cooperative (Co-Op) Rural electric cooperatives generate and/or purchase wholesale power, arrange for the transmission of that power, and then distribute the power to serve the demand of rural customers. Co-ops typically become involved in ancillary services such as energy conservation, load(...)
  • Coincidental Demand
    Coincidental Demand is the sum of two or more demands that occur in the same time interval.
  • Coincidental Peak Load
    Coincidental Peak Load is the sum of two or more peak loads that occur in the same time interval.
  • Combined Cycle
    Combined Cycle is an electric generating technology in which electricity is produced from otherwise lost waste heat exiting from one or more gas (combustion) turbines. The exiting heat is routed to a conventional boiler or to a heat recovery steam generator for utilization by a steam turbine(...)
  • Combined Cycle Unit
    Combined Cycle Unit is an electric generating unit that consists of one or more combustion turbines and one or more boilers with a portion of the required energy input to the boiler(s) provided by the exhaust gas of the combustion turbine(s).
  • Competitive Power Suppliers
    Competitive Power Suppliers are companies that sell power - also called electricity providers, power generators or energy marketers. Your power is delivered by the local electric utility/distribution company (DISCO).
  • Competitive Transition Charge
    Competitive Transition Charge  also know as CTC, is a non-bypassable 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
    Congestion is a condition that occurs when insufficient transfer capacity is available to implement all of the preferred schedules for electricity transmission simultaneously.
  • Conservation
    Conservation is the reduction of energy use.
  • Contract for Differences
    Contract for Differences is a financial instrument used to hedge against the daily or hourly fluctuating prices that would be offered by an ISO or a “power exchange.” A customer would be able to purchase a financial hedge from another party who may or may not have contractual rights to any(...)
  • Contract Price
    Contract Price is the price of goods 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(...)
  • Contract Receipts
    Contract Receipts is a purchase based on a negotiated agreement that generally covers a period of 1 or more years.
  • Control Area
    Control Area is an electric power system or combination of electric power systems to which a common automatic control scheme is applied in order to: (1) match, at all times, the power output of the generators within the electric power system(s) and capacity and energy purchased from entities(...)
  • Cooperative
    Cooperative (Co-Op) Rural electric cooperatives generate and/or purchase wholesale power, arrange for the transmission of that power, and then distribute the power to serve the demand of rural customers. Co-ops typically become involved in ancillary services such as energy conservation, load(...)
  • CTC
    Competitive Transition Charge  also know as CTC, is a non-bypassable 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.
  • Cubic Foot
    Cubic Foot is the most common unit of measurement of natural gas volume. It is the amount of gas that can fit within a space one foot times one foot times one foot in volume. One cubic foot of pipeline-quality gas contains approximately 1,000 BTU.
  • Customer Charge
    Customer Charge is part of the monthly basic distribution charge to partially cover costs for billing, meter reading equipment, service line maintenance and equipment. This charge is the same no matter how much electricity you use.
  • Customer Choice
    Customer Choice is the freedom for a retail customer to purchase electric services, either individually or through voluntary aggregation with other retail customers, from the provider(s) of the customer’s choice and to choose among various fuel types, energy efficiency programs, and renewable(...)
  • Daily Peak
    Daily Peak The greatest amount of electricity used during a certain period in a day, such as an hour, half-hour or quarter hour.
  • Day-Ahead Market
    Day-Ahead Market is 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 Independent System Operator, the power exchange, and other Scheduling Coordinators. This market closes with the Independent(...)
  • Day-Ahead Schedule
    A Day-Ahead Schedule is a schedule 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.
  • DC
    Direct Current is the electrical current that normally flows in one direction only.
  • Decatherm
    Decatherm (or, Dekatherm) is equivalent to ten therms or 1 million Btu. One decatherm is equal to approximately 1,000 cubic feet (Mcf).
  • Default Service
    Default Service is when the electric generation service provided to any consumer who does not or is unable to arrange for or maintain electric generation services with an electric supplier after deregulation begins.
  • Degree Day
    Degree Day is a day when the measure of the coldness of the weather (heating degree day) or its heat (cooling degree day) based on the extent to which the daily mean temperature falls below or rises above 65 degrees Fahrenheit.
  • Delivering Party
    The Delivering Party is the entity supplying the capacity and/or energy to be transmitted at Point(s) of Receipt.
  • Delivery Month
    Delivery Month is the month specified in a given contract for delivery of the actual physical commodity
  • Delivery Point
    The Delivery Point is the location(s) designated at which delivery may be made in fulfillment of contract terms usually where the sale or transportation of gas exits the pipeline’s system.
  • Demand Charge
    Demand Charge is a charge for gas or electric service based on actual or estimated peak daily (or hourly, weekly, monthly) usage of a customer.
  • Demand-Side Management
    Demand-Side Management is 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.
  • Deregulation
    Deregulation is the elimination of regulation from a previously regulated industry or sector of an industry (such as electricity or natural gas); sometimes used interchangeably with restructuring.
  • Direct Current
    Direct Current is the electrical current that normally flows in one direction only.
  • DISCO
    Distribution Company (DISCO) is the company that delivers power to your home or business, also known as your local electric utility/distribution company.
  • Distribution
    Distribution is the delivery of electricity or natural gas to the retail customer’s home or business through local electrical lines or gas pipelines.
  • Distribution Company
    Distribution Company (DISCO) is the company that delivers power to your home or business, also known as your local electric utility/distribution company.
  • Distribution Power
    Distribution Power is a packaged power unit located at the point of demand. While the technology is still evolving, examples include fuel cells and photovoltaic cells.
  • Distribution System
    Distribution System is the portion of an electric system that is dedicated to delivering electric energy to an end user.
  • Downstream
    Downstream is a pipeline closer to the market area as opposed to an upstream pipeline which is closer to the production area.
  • Dual Fuel Capacity
    Dual Fuel Capacity is when a facility has the ability to use more than one kind of fuel for the same purpose non-concurrently.
  • EDC
    Electric Distribution Company (EDC) is the company that owns the power lines and equipment necessary to deliver purchased electricity to the customer.
  • Electric Distribution Company
    Electric Distribution Company (EDC) is the company that owns the power lines and equipment necessary to deliver purchased electricity to the customer.
  • Electric Power Plant
    Electric Power Plant is a station containing prime movers, electric generators, and auxiliary equipment for converting mechanical, chemical, and/or fission energy into electric energy.
  • Electric Rate Schedule
    Electric Rate Schedule is 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 oversight authority.
  • Electric Service Provider
    Electric Service Provider is an entity that provides electric service to a retail or end-use customer.
  • Electric Utility
    Electric Utility, when any person or state agency with a monopoly franchise (including any municipality) that sells electric energy to end-use customers. End-Use The ultimate use to which energy service is put, such as water heating and air conditioning.
  • Electrical Current
    An Electrical Current is a flow of electrons in an electrical conductor. The strength or rate of movement of the electricity is measured in amperes.
  • Electricity Generation
    Electricity Generation is the process of producing electric energy or transforming other forms of energy into electric energy. Also, the amount of electric energy produced or ex-pressed in watt-hours (Wh).
  • Electricity Supplier
    Electricity Supplier is an entity (including an energy marketer or energy services company – or ESCO) licensed or approved by a state utility regulatory agency to provide electricity supply to consumers. With energy choice, consumers can choose their electric supplier. The energy is then(...)
  • Energy Charge
    Energy Charge That portion of the charge for electric service based upon the electric energy that was consumed or billed. The energy charge is usually measured in kilowatt-hours (kWh).
  • Energy Conservation
    Energy Conservation is when actions that are taken to reduce or manage energy consumption in a cost-effective and efficient manner. Methods of reducing energy include using insulation, increasing energy efficiency and changing patterns of use.
  • Energy Consumption
    Energy Consumption is the use of energy as a source of heat or power or as an input in the manufacturing process. Energy consumption determined by multiplying the demand by the time period over which the energy was used. The kilowatt-hour is the typical unit of measure for energy consumption.
  • Energy Efficiency Programs
    Energy Efficiency Programs refers to programs that are aimed at reducing the energy used by specific enduse devices and systems, typically without affecting the services provided. These programs reduce overall electricity consumption (reported in megawatt or kilowatt hours), often without(...)
  • Energy Policy Act
    The Energy Policy Act (EPACT) of 1992 addresses a wide variety of energy issues. The legislation creates a new class of power generators, exempt wholesale generators, that are exempt from the provisions of the Public Holding Company Act of 1935 and grants the authority to the Federal Energy(...)
  • Energy Service Company
    Energy Service Company (ESCO) are companies that offer customers energy and energy-related products and services; required to be approved or licensed by state public utility commissions.
  • Energy Source
    Energy Source is 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.
  • Escape Provision
    Escape Provision when I contract clause allowing one to break a contract, usually with a penalty.
  • ESCO
    Energy Service Company (ESCO) are companies that offer customers energy and energy-related products and services; required to be approved or licensed by state public utility commissions.
  • Exempt Wholesale Generator
    Exempt Wholesale Generator was created under the 1992 Energy Policy Act, these wholesale generators are exempt from certain financial and legal restrictions stipulated in the Public Utilities Holding Company Act of 1935.
  • Expiration Dates
    Expiration Dates are the dates and times after which trading in options or futures contracts terminate, and after which all contract rights or obligations become null and void.
  • Federal Energy Regulatory Commission
    The Federal Energy Regulatory Commission (FERC) regulates the price, terms and conditions of natural gas and electricity sold in interstate commerce and regulates the price, terms and conditions of all wholesale transactions. FERC is the federal counterpart to state utility regulatory commissions.
  • FERC
    The Federal Energy Regulatory Commission (FERC) regulates the price, terms and conditions of natural gas and electricity sold in interstate commerce and regulates the price, terms and conditions of all wholesale transactions. FERC is the federal counterpart to state utility regulatory commissions.
  • Firm Power
    Firm 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.
  • Firm Service
    Firm Service is the highest quality of sales or transmission service offered to customers under a led rate schedule that anticipates no planned interruption. It also receives the highest priority of service.
  • Fixed Price
    Fixed Price is a price, usually per kilowatt-hour, that remains the same over the term of the contract.
  • Flat Rate
    Flat Rate is a fixed charge for goods and services that does not vary with changes in the amount used, volume consumed or units purchased.
  • Forced Outage
    Forced Outage is 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.
  • Fossil-Fuel Plant
    Fossil-Fuel Plant is a plant using coal, petroleum, or gas as its source of energy.
  • Fuel
    Fuel is any substance that can be burned to produce heat; also, materials that can be fissioned in a chain reaction to produce heat.
  • Fuel Chain
    Fuel Chain is the chain of activities involved in transforming energy into forms more convenient for society. This chain may include some or all of the following: fuel exploration, extraction, preparation, transportation, conversion to electricity, distribution and waste disposal.
  • Fuel Charge
    Fuel Charge is the rate charged per kilowatt-hour (or cubic feet) to cover the costs of the fuel used to produce power (or gas).
  • Fuel Consumption
    Fuel Consumption is the amount of fuel used for gross generation, providing standby service, start-up and/or flame stabilization.
  • Fuel Expenses
    Fuel Expenses are the costs that include the fuel used in the production of steam or driving another prime mover for the generation of electricity. Other associated expenses include unloading the shipped fuel and all handling of the fuel up to the point where it enters the first bunker,(...)
  • Fuel loss
    Fuel Loss is associated with transporting natural gas across a pipeline system (also referred to as Line Loss or Shrinkage).
  • Full-Forced Outage
    Full-Forced Outage is the net capability of main generating units that is unavailable for load for emergency reasons.
  • Futures Market Arrangement
    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.
  • Gas
    Gas is any fuel which burned under boilers and by internal combustion engines for electric generation. These include natural, manufactured and waste gas.
  • Gas Adjustment Factor
    Gas Adjustment Factor is an adjustment to a LDC sales rate to reflect the fluctuating cost of purchased gas.
  • Gas Day
    Gas Day is the standard day by which gas is nominated (e.g. 10:00 am to 10:00 am the following day).
  • Gas Turbine Plant
    Gas Turbine Plant is a plant in which the prime mover is a gas turbine. A gas turbine consists typically of an axial-ow air compressor, one or more combustion chambers, where liquid or gaseous fuel is burned and the hot gases are passed to the turbine and where the hot gases expand to drive(...)
  • Generating Unit
    Generating Unit is any combination of physically connected generator(s), reactor(s), boiler(s), combustion turbine(s), or other prime mover(s) operated together to produce electric power.
  • Generation Company
    Generation Company is 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(...)
  • Generator
    Generator is a machine that converts mechanical energy into electrical energy.
  • Worry-Free Fixed
    Worry-Free Fixed is a fixed rate electricity supply plan from Energy Me. When customers enroll in a worry-free fixed plan they experience comfort knowing that they have securely locked-in their electricity supply rate for the term they chose. When that particular term is up, the customer then(...)