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Glossary

 

 


 

Aggregators:
Brokers who seek to bring together customers to create a "load" so that they can buy power in bulk, taking advantage of economies of scale.

Ampere (amp):
Unit that measures electrical current in a circuit.

Base-Load Capacity:
Generating units, such as coal-fired steam and combined cycle plants, that are used around the clock to meet consumer's electric needs.

Capacity:
The maximum load a generating unit, generating station, or other electrical apparatus is rated to carry or can actually carry under existing service conditions.

Circuit: Conductor for electric current.

Combustion Turbine Plants: Small electric generating units, usually gas and/or oil-fired, that are typically used for peaking capacity.

Combined Cycle Plants:
Electric generating units in which electricity is produced from otherwise lost waste heat, in the form of steam, exiting from one or more combustion turbines.

Coal-Fired Steam Units:
Generating plants that use the steam produced by heating water with burning coal to create electricity.

Current:
Current is the flow of electrons in an electric conductor.

Demand:
The rate at which electric energy is delivered to or by a system, part of a system, or a piece of equipment. The primary source of demand is the power-consuming equipment of the customers.

Deregulation (also called Restructuring, Customer Choice, Retail Wheeling, etc.):
The ability of generation companies or brokers to sell electricity directly to retail consumers, utilizing regulated transmission lines and the regulated distribution facilities of existing utility companies.

Distribution:
The function of delivering power to retail customers after it reaches the city gates by way of the transmission grid.
Energy: This is broadly defined as the capability of doing work. In the electric power industry, energy is more narrowly defined as electric energy supplied over time, expressed in kilowatt-hours (kWh) or megawatt-hours (MWh).

Generation or Production:
The actual creation of electricity at power plants or generating stations.

Generation Costs:
Costs to produce electricity or acquire it by contract.

Grid:
The system of transmission lines, regionally and locally, linking generating facilities to distribution systems.

Independent System Operator or Regional Transmission Operator:
Regional, independent managers of transmission facilities formed to ensure safe, reliable and fair transfer of electricity from generators to distribution companies at a consistent price.

Investor-Owned Utility (IOU):
A utility that is owned by shareholders who receive a dividend based on profits from electric sales.

Joint Action Agency:
A not-for-profit organization of municipal utilities that band together to jointly own and operate generation and transmission facilities to gain economies of scale.

kWh:
Kilowatt-hour - how consumption of electricity is measured.

Load:
Amount of electricity needed at a given time.

Market Power:
When one or a few large companies dominate power production in a regional market and use such dominance to manipulate the market.

Megawatt (MW):
One million watts

Megawatt-hour (MWh):
One thousand kilowatt-hours or one million watt-hours.

Municipal Utility:
A utility that is owned and operated by a municipality, a Public Power utility.

North American Electric Reliability Council (NERC):
NERC is a voluntary membership organization that makes reliability rules and standards for the electric utility industry.

Obligation to Serve:
Obligation by a utility to assure adequate supply of electricity for all customers into the future.

"Pancaked" Transmission Rates:
The practice of adding a transmission fee on top of previous transmission fees each time power passes through a different utility service area between the generator and the distribution system.

Peak Demand:
The point at which demand for electricity reaches its highest level.

Peaking Capacity:
Generating units, like combustion turbine plants, that are used when the demand for electricity is high.

Power Exchange:
A spot market for electricity in competitive marketplaces.

Public Power:
The term used for not-for-profit utilities that are owned and operated by a municipality, state or the federal government.

Regulated Monopoly:
Utility with service territory protection. The system currently in place in the regulated electric utility industry in which one utility is designated to serve a defined service territory.

Regulation:
Supervision over rates, terms and conditions of service, financing and service areas by a governmental agency.

Reliability:
Steady, predictable and consistent electric service and prices.

Restructuring:
Reconfiguring the market structure by eliminating the monopoly on some of the necessary functions of an electric company.

Retail Customer:
A residential, commercial, industrial or other ultimate user of electricity.

Rural Electric Cooperative (REC):
A member-owned utility funded through government or CFC loans or private funding to serve a rural area.

Service Territory:
A designated area served by an individual utility under a regulated utility structure.

Stranded Investments:
Generation, transmission or distribution facilities whose costs cannot be recovered because the power or service cannot be sold on the open market at a price that allows for recovery of the investment in the facilities.

Substation:
A facility used for switching and/or changing or regulating the voltage of electric energy. Substation may tie generating stations to transmission systems or transmission systems to distribution systems.

Transformer:
A device for changing the voltage of alternating current. Step-up transformers increase voltage, for example, from a power plant to a transmission system. Step-down transformers reduce voltage, for example, from a transmission system to a distribution system or from a distribution line to a retail customer’s premises.

Transmission:
The system of lines that carries electricity from generators to distribution companies.

Vertically Integrated Utility:
A utility that provides all generation, transmission and distribution services to its customers.

Voltage:
A measure of the force which makes electrons move or provides potential for them to move.

Watt:
The electric unit of power or rate of doing work. One horsepower is equivalent to approximately 746 watts.

Watt-hour:
One watt of power expended for one hour.

Wholesale Customer:
An entity that purchases power for resale to others.

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