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Glossary of Energy and Related Terms
Electricity produced at costs higher than prevailing market prices.
Rain mixed with sulfuric, nitric and other acids which arise from emissions released during the burning of fossil fuels.
A company that is controlled by another or that has the same owner as another company.
AGGREGATOR / AGGREGATION
An entity that brings consumers together to buy electricity in bulk in order to increase customers' buying power. Aggregators can serve homes, businesses or entire communities. They facilitate the sale of power but are usually not the sellers.
Other energy sources that can be substituted for the fuel in use. For example, renewable energy sources represent viable alternatives to fossil fuels.
The measure of the number of electrons flowing past a given point in an electrical conductor in a given amount of time; this is the electrical current.
A chronic respiratory disease, often arising from allergies and agitated by pollution, which can cause labored breathing, chest constriction and coughing.
The historic basis for most utility rates, this is the cost of providing service to various customer classes. Computed by dividing total costs by the number of units produced, average-cost figures distinguish between customer classes but do not necessarily reflect the true costs of service for a specific customer.
The minimum energy level a company must provide to its customers on a constant basis.
A contract agreement between two willing parties. In a competitive electric market, bilateral contracts would be agreements between suppliers and customers that specify the terms and conditions for pricing and delivery of electric service.
Solar energy that is stored in green plants and other organic matter. Wood and forest residues, animal manure and waste, grains, crops and aquatic plants are some common living materials grown or produced expressly for use as biomass fuels. Biomass facilities burn wood, agricultural wastes and/or methane gases from landfills to spin a turbine that then generates electricity.
Facilities needed for interconnection but which may only be available from a single source or supplier. An example would be a local electricity transmission facility used in the wheeling of power.
In electric service, a company or individual that facilitates the sale of power to customers, but does not take title to the power and is therefore not the seller.
Spot power outages and/or voltage reductions within a utility's service area resulting from intermittent or curtailed power supply.
British Thermal Unit - A measure of heat energy; the amount needed to raise the temperature of one pound of water by one degree Fahrenheit.
BULK POWER SALES
The transmission of large amounts of electricity at high voltage, usually from one utility to another, for the purpose of resale.
CARBON DIOXIDE (CO2)
A colorless, odorless, incombustible gas formed during normal human breathing - but also emitted by the combustion activities used to produce electricity, as well as other natural and man-made processes. Carbon dioxide is a major cause of the greenhouse effect that traps harmful radiant energy close to the earth's surface.
Any of various compounds consisting of carbon, hydrogen, chlorine and fluorine, CFCs are widely produced by aerosol spray products and refrigerants. They are a major cause of the greenhouse effect that traps harmful radiant energy close to the earth's surface.
A term synonymous with renewable energy resource products. See Green Power.
A process by which both electric energy and thermal (heat or steam) energy are produced simultaneously from a single, common fuel source. The energy produced at a cogeneration facility can be used to meet its own electrical needs or may be sold to an electric utility.
COMPETITIVE POWER SUPPLIER
A company that sells power, which is delivered by the distribution company serving a community. Competitive power suppliers are sometimes called electricity suppliers, electricity providers, power generators, or power marketers.
COMPETITIVE TRANSACTION CHARGE (CTC)
The remaining costs of investments made by utilities in power plants and long-term contracts made to meet the obligation to serve. A CTC is not a new charge, but it is reflected in customers' bills as a separate line item. State officials have used a CTC to allow utilities to recover their "stranded costs" over a set period time (the transaction period) until competition is fully implemented - after which the CTC is phased out.
The lack of a monopoly in a market, evidenced by the presence of two or more entities providing for economic choice in buying, selling, or exchanging goods and services.
The agreement between a competitive power supplier and a consumer, including the cost, length of service, and whether there are penalties for early termination.
A fee demanded of customers for the cost of hooking up to new service.
Actions taken to reduce or more efficiently use energy, in an effort to preserve the environment and avoid depletion of energy resources.
A business entity similar to a corporation, except that ownership is vested in members rather than stockholders, and benefits are in the form of products and services rather than profits. Many rural and remote areas of the country are served by electric cooperatives formed to provide power to communities not served or under-served by utilities.
The ability of electricity consumers to select the company which supplies their power generation; and the laws and regulations that enable this choice to occur through the elimination of monopoly status for utilities.
The safe and orderly permanent shutdown of a utility plant; often used in reference to nuclear facilities.
A basic level of electricity service, which provides a consumer with a continuous supply of power based on a fixed rate. In many states, consumers who do not select their own power supplier in a competitive market are assigned to a company "by default." The terms of such an assignment are often called a Standard Offer.
DEMAND SIDE MANAGEMENT
Processes and investments in equipment made by power companies and commercial customers to reduce the customers' "demand" for electricity or to shift the customers use away from periods of high electrical demand.
The relaxation of controls over business operation (also known as Decontrol). In the retail electricity market, deregulation refers to ending the monopoly status of local utilities and allowing other power marketers to offer service to customers. In this case, the incumbent utility retains control of the transmission and distribution of power, while the generation of power becomes open to competition.
An arrangement that gives customers the choice of buying electricity from any supplier in the competitive market. Under direct access, customers could buy power from any generator and use the transmission and distribution network to transport the electricity.
The flow of electricity (generally at lower voltages from transmission facilities) to the end consumer - usually businesses and homes. A distribution company uses electrical wires to deliver power to customers.
The selling of major assets (power plants, transmission equipment or distribution lines). Voluntary divestiture may occur in the natural course of doing business. Forced divestiture occurs when a public utility commission requires that a utility sell its assets to diminish the possibility of creating market power.
The ration of desired work-type output to the necessary energy input, in any given energy transformation device. An efficient light bulb, for example, uses most of the input electrical energy to produce light, not heat. An efficient heat bulb uses most of its input to produce heat, not light.
The term for electrical devices which produce the same amount power using less electrical energy. For example, a fluorescent type light bulb produces the same amount of light using less electrical energy than incandescent electric light bulbs. Efficiency programs reduce energy in order to lower electrical bills.
The primary categories of energy sources are 1. fossil fuels (coal, oil, gas); 2. nuclear (fission and fusion); and 3. renewables (solar, wind, geothermal, biomass, hydro).
Regulations requiring utilities to build and operate facilities in such a way as to preserve a healthy environment and conform with aesthetic, historic, and recreational patterns established within a community.
A contract provision which allows a party, such as an electric customer, to get out of it. Usually, there is a penalty.
The Federal Energy Regulatory Commission, an independent federal agency charged with regulating rates charged by public utilities, including electric and natural gas utilities. FERC is responsible for regulating interstate electric power transmission and the sale of electric power for resale. Many jurisdictional questions between FERC and state regulatory agencies are raised in proposals to open up the electric industry.
FERC ORDER 888
The FERC's open transmission access rulemaking. More than 1,000 pages, Order 888, in part, requires utilities with transmission capacity to file open access tariffs providing full comparability with what they provide themselves.
FLAT RATE OR FIXED RATE
A rate schedule that provides for a specified per-unit charge for goods and services that does not vary with changes in the amount used, volume consumed, or units purchased. Many electricity low-income assistance programs use a flat rate to avoid imposing escalating costs on vulnerable customers.
FOSSIL RESOURCES / FOSSIL FUELS
Electric generation using natural gas, oil, coal, or petroleum coke or other petroleum-based fuels; called fossil fuels because they are formed by the decayed remains of prehistoric plants and animals.
A material that is consumed, giving up its molecularly-stored energy which is then used for other purposes, such as to do work (run a machine).
A device which produces electricity with high efficiency (little heat) by using a fuel and a chemical which reacts with it (an oxidizer) at two separate electrical terminals. An electric current is thereby produced.
The amount of work obtained for the amount of fuel consumed. In cars, an efficient fuel allows more miles per gallon of gas than a less efficient fuel.
The act of producing electricity by changing other forms of energy - such as fossil fuels, nuclear or renewable energy. Generation also is sometimes used as a noun to refer to electricity that has been produced.
Entities that design, construct, own, operate, and maintain generation assets to supply energy and ancillary services to the competitive market.
Heat energy extracted from reservoirs in the earth's interior, as is the use of geysers, molten rock and steam spouts.
Geothermal energy is generated by utilizing steam that lies below the surface of the earth in certain locations to generate electricity. Geothermal plants emit little air pollution and can have minimal impacts on the environment.
The gradual warming of the earth due to the "greenhouse effect".
An exception provision in a new law or regulation allowing those already doing something to continue doing it, even if they would be stopped by the new restriction.
Solar radiation absorbed by the earth, converted to heat, and trapped close to the earth's surface. In greenhouse buildings used to grow plants, the radiant energy is trapped by glass; in the earth's atmosphere, dangerous radiant energy is trapped by gases such as CFCs and carbon dioxide.
Substances that can adversely effect human health and the environment when they accumulate in the atmosphere and trap radiant energy; they include sulfur dioxide, nitrous oxide and carbon dioxide.
A term synonymous with renewable energy resource products. Green Power is cleaner than electricity from traditional sources because it results in lower air pollution emissions and no nuclear waste. It is also more environmentally friendly because it comes from electricity resources that are renewable - such as the sun, water, wind, biomass (the burning of agriculture or other wastes), and geothermal (heat from the earth).
The transportation highway over which electricity travels from supplier to customer.
The entity that oversees the delivery of electricity over the grid to the customer, while assuring consistently high levels of reliability, and public and worker safety. The grid operator potentially could be independent of the utilities and suppliers.
A prefix meaning produced by or derived from water or the movement of water, as in hydroelectricity.
Power obtained from the natural movement of masses of water. Hydroelectric power plants convert the energy contained in flowing water, like rivers and streams, into electricity. Low impact hydro plants producing less than 30 Megawatts are often considered renewable sources of electricity. Larger hydro projects, known as high impact, cause concern because dams can change natural river flows, degrade water quality and block fish migration. Hydropower currently provides about 10 percent of the electricity generated in the United States - a percentage unlikely to increase dramatically, both because few new sites remain for the construction of large dams and because of general opposition to building large new facilities on environmental grounds.
INDEPENDENT POWER PRODUCER (IPP)
An entity other than a public utility that offers electric power for sale to the public, usually on a wholesale basis. The term is sometimes meant to include qualifying cogeneration or small power facilities under the federal PURPA law that produce power for sale at wholesale to an electric utility.
INDEPENDENT SYSTEM OPERATOR (ISO)
An independent entity that controls a power grid to coordinate the generation and transmission of electricity among several electric utilities and ensures a reliable power supply. In current models, ISOs are independent of states' utilities and are regulated by the FERC.
INVESTOR-OWNED UTILITY (IOU)
A utility company owned and operated by private investors, as opposed to governmental or cooperative-type ownership. Some 85 percent of electric power customers in the United States are served by IOUs.
KILOWATT HOUR (KWH)
The standard unit to measure electricity; it is the energy equivalent to that expended in one hour by one kilowatt of power. A kilowatt is 1,000 watts of power. For example, ten 100-watt light bulbs lit for one hour use one kilowatt-hour (1,000 watt-hours) of electricity. Your electricity use determines the total number of kilowatt-hours on your bill.
The amount of electricity being used at one time by a customer, circuit or system. Also, the total demand for service on a utility system at any given time.
Information on a customer's usage over a period of time, sometimes shown as a graph like the one on the bill.
Individuals and families whose household income (usually a set percentage below the federal poverty level) qualifies them for programs that offer discounted electricity service.
The cost, in scarce resources, of producing one more unit of a product or the value, in resources, that would be saved by producing one unit less of a product.
When one company owns a sufficiently large percentage of generation, transmission, or distribution capabilities in a region to allow it to influence the price of electricity by forcing the purchase of its own power.
One thousand kilowatts.
A colorless, odorless, flammable gas forming the major portion of natural gas.
The absence of competition in any economic relationship. Throughout this century, electric utilities were granted monopoly markets by government in exchange for allowing the oversight of rates and plant construction, and by meeting an obligation to serve all customers in a service area. Deregulation ends this arrangement to allow competition in the retail electricity market.
The removal of a power plant from service, usually in conjunction with maintenance or decommissioning processes that hold the plant in reserve until service issues are resolved.
A non-profit utility that is owned and operated by the community it serves. Whether municipal utilities are open to customers choice and competition are decisions to be made by the community's public officials, as well as state and federal policy makers.
The National Association of Regulatory Utility Commissioners, an organization of elected and appointed officials who oversee the regulation of electricity and other utilities.
The National Association of State Utility Consumer Advocates, an organization of elected and appointed representatives who promote the interest of consumers before regulatory and legislative bodies.
A dry, combustible mix of methane and hydrocarbons used in heating, lighting, and other utility services. New Natural Gas power plants called combined cycle combustion turbines are very efficient and only produce a fraction of the air pollution of other types of fossil-fuel fired power plants. Old Natural Gas plants that are simply converted fossil-fuel fired facilities emit carbon dioxide and greenhouse gases. Some environmental advocates do not consider natural gas a "green" technology because the exploration for and extraction of natural gas can severely damage ecosystems.
NITROGEN OXIDE (NOX)
A byproduct of electricity generation and a contributor to ozone pollution, smog and the greenhouse effect.
Atomic nuclear processes which involve the splitting of nuclei with the accompanying release of energy.
Atomic nuclear processes which involve the fusing of nuclei with an accompanying release of energy.
Energy produced in the form of heat by causing changes in the nucleus of the atom, which can then be converted into electrical power.
The byproduct of nuclear power production·
High-level nuclear waste is
Low-level nuclear waste is
Giving all customers equal opportunity to the grid.
OBLIGATION TO SERVE
Under traditional regulation, it is the duty of a regulated utility to provide service to all customers in its service territory on a non-discriminatory basis.
Blocks of time when energy demand and price is low (off-peak) or high (on-peak).
A form of oxygen that is a major agent in the formation of air pollution; it results from photochemical reactions involving automobile and industrial emissions. Ozone also occurs naturally in the upper atmosphere (the ozone layer) where it serves as a barrier against the harmful effects of the sun's radiation. Ozone emissions involve pollution close to the earth's surface, where ozone accumulation is harmful. Ozone depletion occurs in the upper atmosphere, where preserving the shrinking ozone layer is essential to protecting the planet.
Microscopic particles of dust found in the air. Industrial activities including electricity generation are the focus of proposals to limit particulates, which are said to cause health and environmental problems.
The maximum demand for energy on a utility system at a stated point of time, which determines the necessary generating capacity. The historic obligation to serve for utilities means being able to produce enough power at any given time to meet the peak load of a service area.
PERFORMANCE BASED RATEMAKING (PBR)
Rates for utility service are no longer be based on the cost of service, but instead on performance standards and market indices. PBR allows a utility greater flexibility to manage the costs of its electric system and to price its power at competitive levels by taking into account the market risk for recovering investments.
PHOTOVOLTAIC / PV
Pertaining to the production of electricity from light (see Solar Cell).
A utility program offering a limited group of customers their choice of certified or licensed energy suppliers on a minimum time trial basis (such as one year).
An arrangement between two or more interconnected electric utilities to coordinate the operation of their generating or transmission facilities, or both.
An entity, such as a supply coordinator or broker, that obtains energy from any source or combination of sources, including independent generators, utility system power or spot purchases, for delivery to a utility or end user.
A situation where a price has been determined and fixed, often by a regulatory body to control the cost of electricity.
Market prices for generation and transmission service made available to the public so that customers know how much they will pay for power supply and transportation in a deregulated market.
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 (PUHCA)
The act of Congress that simplified the organizational structure of the more than 200 complex electric and gas utility holding company systems. The act also authorized the Securities and Exchange Commission to regulate financial transactions of certain registered holding companies that remained the owner of utility subsidiaries in more than one state.
PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978 (PURPA)
The federal act outlines requirements for state utility commissions, electric utilities, independent power producers and certain federal regulatory agencies to encourage the use of alternative energy sources in the generation of electric power. The act created a market for independent power producers called qualifying facilities (QFs), requiring utilities to buy power from certain power providers.
QUALIFYING FACILITY (QF)
A small power producer or cogenerator that meets PURPA guidelines and qualifies to supply generating capacity to electric utilities, which must purchase this power at a price approved by state regulators.
The unit charge or charges made to customers for providing a public utility service.
The accumulated capital cost of facilities built or purchased to serve a public utility's customers, upon which the utility is allowed to earn a return.
The maximum permitted rate for flexibly-priced electricity service.
A proceeding before a regulatory commission to set rates and charges to customers. In addition to the utility, members of the public and their representatives can be parties to a rate case.
Assurance that utilities, if and when their markets are no longer protected, are allowed to compete in the markets of their competitors.
The conversion of solid waste into new products using resources contained in the discarded materials.
REGIONAL TRANSMISSION GROUP
A group of voluntary organizations made up of transmission users and providers that simplify the use of existing transmission facilities, coordinate planning and expansion, and resolve disputes.
A rule or law established by the federal or state government which sets procedures that a utility must follow; the process in which government powers are used to direct or control some phase or unit of economic activity. In electricity, regulation has been used to set rates, determine where and when power facilities are built, set which utility companies serve a given area, and other functions.
The providing of adequate and dependable generation, transmission and distribution service.
Sustainable energy sources that cause relatively few environmental impacts and pose a low risk to human health. They includes technologies such as solar photovoltaic energy, solar thermal energy, wind power, low-impact hydro power, geothermal energy, and biomass energy.
The reorganization of traditional monopoly electric service to allow operations and charges to be separated or "unbundled" into generation, transmission, distribution and other services. This permits customers to buy generation services from competing suppliers.
A process that allows retail customers to obtain electric generation supply from sources beyond the local utility. The process requires the use of the local utility's transmission and distribution systems.
Equipment designed to reduce sulfur emissions from coal-fired power plants.
The act of selling bonds to finance to cost of capital construction. In electricity deregulation, securitization has been used to finance the transition costs incurred by utilities as competition alters the ability to pay for facility investments and contracts that have met the obligation to serve.
An economic transaction that has little capital substance behind it. For example, when an entity attempts to operate as a utility but does not plan to build, own or operate any substantial generation or transmission facilities.
An electricity cost discounting method used in many states to help make electricity markets more competitive and affordable for consumers. Once a state determines a shopping credit, consumers could use that per kilowatt-hour figure to compare the savings they might realize by selecting a particular power supplier. By subtracting the shopping credit from the price at which a supplier is willing to serve them, consumers can determine the rate at which they will be billed. (For example, if a supplier is willing to serve you at 2.9 cents/kwh, and your shopping credit is 3.72 cents/kwh, subtract to arrive at your savings of .82 cents/kwh.)
An unauthorized switching of service from one company to another, without the knowledge or consent of the customer.
Fog that has become mixed with smoke to form a form of pollution that adversely affects human health and the environment.
SOCIAL AND ENVIRONMENTAL PROGRAMS
Programs designed to benefit the public and maintain the quality of life, such as energy-efficiency and low-income assistance programs.
Device made of semiconductor materials which produces a voltage when exposed to light.
Power produced by technology that collects solar radiation to produce electricity. The two most common forms of solar energy are photovoltaic panels, which are semiconductors that directly generate electricity, and solar thermal plants, which use the sun to create steam to turn a turbine.
SOLAR THERMAL ENERGY SYSTEMS
Systems using concentrating collectors to focus the sun's radiant energy onto or into a receiver to produce heat.
A stranded cost occurs when customers of one utility are allowed to have power brought to them from some other supplier, thereby leaving the original utility with debts for plants and equipment it no longer needs and without the revenue from the ratepayers the plants were built to serve. All potentially stranded costs are the result of decisions that were reviewed and approved by government regulators and were made by utilities under the unique regulatory contract with their state and their customers.
A solar energy installation not connected to a utility power line. A direct system uses the PV-produced electricity as it is produced, e.g. a solar-powered water-pumping station. A battery storage system stores the PV-produced electricity for use a later time, e.g. at night or on cloudy days.
The basic terms and rates offered to a customer in a competitive retail electricity market, usually when the customer does not select a particular service plan and receives the standard offer "by default."
SULFUR DIOXIDE (SO2)
A pungent toxic gas that is a major pollutant associated with electric generation through non-renewable sources.
The collection of programs, such as renewable energy and demand side management programs, lifeline rates and other utility resources.
Public schedules that detail a utility's rates, rules, service territory and terms of service that are filed for official approval with a regulatory agency.
see Geothermal Power
Above-market utility costs that have not yet been recovered through rates. These costs result from changes in market structure (such as deregulation) and would become "stranded" in the move to a competitive market. They include: utility-owned above-market generation costs; non-utility-owned above-market generation costs; such as power purchased from QFs; and costs known as regulatory assets, such as deferred taxes.
The flow of electricity over high voltage wires from power plants to local distribution lines.
The spin-off of services traditionally provided by utilities (e.g. generation, transmission, distribution) into separate business entities. Also, the separation of services offered to consumers as a package into different services that can be purchased separately.
The provision of a basic level of service to all persons at affordable rates.
A unit of electric power equal to a current of one ampere flowing across an electrical circuit with a potential of one volt. A kilowatt is a unit of power equal to 1,000 watts.
Modifying a home or structure to conserve energy. Methods include: sealing window and door frames with caulking or gaskets, installing storm doors and windows, and adding or increasing the insulation.
The transfer of electric energy from a generating source to a purchaser, who then resells the power to its own retail customers. Energy can be wheeled for short distances, across an entire system or across several systems.
Electricity produced when wind power is captured by turbines and converted into electricity. This is the cheapest, and fastest growing, renewable energy technology.
A facility at which many devices powered by the wind produce mechanical or electrical power on a large scale.
NREL photo library
PIX number: 05424
Old Faithful geyser at Yellowstone National Park
Geothermal energy can be used to provide highly efficient heating, cooling, and hot water.
Credit: Renner, Joel - DOE
Federal energy management program overview - "Super energy savings performance contracts" (DOE/GO-10099-792 , August 1999) Geothermal today: 1999 geothermal energy program highlights. Clean energy for the
21st century booklet, 2000. (NREL/BR-810-27820 ) (DOE/GO-102000-1066 )