Agent: See Broker
Aggregation: The grouping of customers into a larger unit to obtain a pricing advantage with competitive suppliers.
Ancillary: Services, which are often included in the fixed-all inclusive price of electricity, that ensures that electricity will be generated and delivered. Services include, but are not limited to, maintaining reserves for energy, generation, and transmission; controlling and supporting the electric transmission system, and the overall management of the transmission system and process.
Alternative Retail Energy Supplier (ARES): Any entity that is not a jurisdictional utility, which sells energy in a competitive market to retail energy consumers.
Bandwidth: See Swing
Billion Cubic Feet (BCF): equivalent can produce roughly 1.028 trillion BTUs
British Thermal Unit (BTU): The standard unit of measurement for thermal (heat) energy.
Broker: (consultant, marketer, agent) An entity that negotiates for the purchase or sale of energy on behalf of customers.
Cogeneration: The simultaneous generation of electrical and thermal energy while burning a single fuel source.
Consultant: See Broker
Consumption: The amount of energy that is actually used by an entity in a given period of time.
Contract quantities: When a consultant puts your account out to bid, they should submit your historical usage, as recorded by the utility, to the providers as a reference. When a provider is chosen to contract, they use this historical usage to determine what volumes to purchase over the term of your contract. These are the ‘contracted quantities’.
Demand: A measure of the rate at which electric energy is consumed.
Demand Response: Concept that seeks to manage the electric consumption of end users in an effort to reduce the use of high cost electricity, better allocate the electrical systems resources, and maintain electrical system reliability. Demand response can be classified as: emergency demand response, which seeks to avoid unwanted service interruptions when electricity is scarce; economic demand response, which uses curtailment and self-generation to reduce electric consumption; and ancillary services demand response, which uses ancillary services (See Ancillary Services) to ensure the electrical transmission system operates securely and efficiently.
Deregulation: The end of or scaling back of regulations regarding the generation of energy. Consumers have a choice of who supplies or generates their energy. Transmission and distribution of energy though is still regulated and remains the responsibility of the public utility.
Distribution: The delivery of energy to customers from the transmission system.
Energy Services Company (ESCO): A business that provides services in an effort to improve the energy efficiency of facilities and projects. Services include developing, designing, arranging for financing, installing and maintaining equipment, measuring and monitoring energy savings, and assuming the risk of energy savings. ESCO’s utilize performance based contracting, earning through the savings their work has created. ESCO’s also exert effort to educate their customers about their energy use, so they better understand the relationship between energy use and their business.
Firm Transportation: The transportation of natural gas from the supplier to the consumer where the amount of natural gas delivered has been pre-determined, on either a daily or hourly basis, and the physical distribution pointes have been determined and aren’t subject to change.
Fixed Price: A price for an energy product that will not change for a specified amount of time.
Futures Market: A market place that engages in the trading of energy commodities and their future contracts.
Grid: The electrical utility distribution network.
Hedging: A tactic used in investing, especially involving futures trading, that allows an investor to reduce their risk through the investment of offsetting markets. Typically this tactic reduces the amount an investor would potentially gain or lose had they only invested in a single market.
Hundred Cubic Feet (CCF): Equivalent to one hundred thousand BTUs.
Independent System Operator (ISO): A federally-regulated organization responsible for coordinating, controlling and monitoring the operation of the electrical power system for a specified region.
Investor-Owned Utility: A utility company that is owned by stockholders and provides public utility services to retail customers for a profit.
Kilowatt (kW): Equivalent to one thousand Watts.
Kilowatthours (kWh): Equivalent to one thousand Watthours.
Line Loss: (unaccounted for gas factor, shrinkage) A percentage set by the utility; this is energy waste occurring during transport. The difference between energy billed & delivered
Load Factor: An indicator of how steady an electrical load is over time, a factor of consumption and demand. Load factor is a consideration used in pricing, where a lower load factors create higher pricing, and higher load factors generate lower pricing.
Marketer: See Broker
Material change: A clause incorporated into most providers’ contracts that addresses significant changes in usage due to the addition or deletion of facilities/equipment, hours of operation, or any other event that impacts usage over the long term. This clause allows the provider to adjust the terms/price of the contract to account for these changes. Swing addresses small changes to contracted usage on a monthly basis, whereas material change addresses significant changes that could impact usage over the long term.
Million Cubic Feet (MCF): Equivalent to one million BTUs.
Municipality: A political subdivision of a state, usually a city, town, or village, that maintains the rights and powers of self-government for general purposes.
Megawatt (MW): Equivalent to one million Watts.
Megawatthours (MWh): Equivalent to one million Watthours.
Off Peak: Period of time referring to low system demand. Also known as the period of year when demand is low, typically April through October.
On Peak: Period of time referring to high system demand. Also known as the period of year when demand is high, typically November through March.
Provider of Last Resort (POLR): A company who provides electric generation to consumers who don’t choose an alternative supplier, are unable to find a supplier willing to serve them, or no longer wish to receive electric generation from another supplier.
Public Utility Commission (PUC): The state agency that regulates utilities and competitive sales. PUC is referred to as Board of Public Utilities (BPU) or Public Service Commission (PSC) in some states.
Regional Transmission Organization (RTO): See Independent System Operator
Shrinkage: See Line Loss
Slamming: Refers to practice of switching providers without the consent or knowledge of the customer.
Spot Market: Public market where commodities, as their physical product, are traded during the month of their physical delivery. Also known as the cash market.
Swing: (bandwidth, tolerance) is the percent of energy that can be used above or below contracted quantities at the contracted rate. This percentage ranges from 0% to 100% (0% meaning that no variance is allowed, and 100% meaning unlimited variance). Swing addresses small changes to contracted usage on a monthly basis, whereas material change addresses significant changes that could impact usage over the long term.
Tariff: A schedule of rates that energy supplies and distributers are allowed to charge customers for the use of their product and services, and the general terms and conditions that apply to those rates.
Therm: Equivalent to 100,000 BTUs
Time of Use (TOU): Electric companies’ ability to measure the time of day when electric is consumed, while designating certain time periods, with adjustments for seasons, as on-peak or off-peak time periods. On-peak use is more expensive than off-peak use, and this knowledge allows consumers to adjust their consumption habits to reduce their electricity expense.
Tolerance: See Swing
Transmission: The flow of electricity from the generator to the distribution system.
Unbundled Service: The separation of utility service into basic components that are priced and sold separately.
Unaccounted for gas factor: See Line Loss
Variable: An aspect of an energy agreement, that is not fixed, but rather subject to change over the course of the agreement, often times in relation to the commodity market.
Watt: The electrical unit of power; equivalent to one joule per second.