Glossary

An oil or gas well not in use because it was a dry hole originally, or because it has ceased to produce in paying quantities. State statutes and regulations require the plugging of abandoned wells to prevent oil, gas, or water seeping from one stratum of underlying rock to another.

Termination of a sale or interstate transportation of natural gas. Abandonment of a service that is subject to FERC jurisdiction requires some type of advance determination by the FERC under Section 7 (b) of the NGA that the "present or future public convenience and necessity" requires termination.

A provision of a FERC certificate of public convenience and necessity that authorizes abandonment on a future condition subsequent or on a date certain.

See PRESSURE.

The legal right to use an electrical or gas transmission and /or distribution system as a means of transferring electrical energy or natural gas as set forth in the contract.

A charge levied on power supplied, or its customer, for access to a utility's transmission or distribution system. It is a charge for the right to send electricity over another's wires.

Tracking system established by the FERC for unrecovered gas supply costs incurred by interstate pipelines, to be eliminated once pipelines sell gas at market-based rates under blanket sales certificates pursuant to Order No. 636.

Tracking system established by the FERC used by interstate pipelines for costs incurred transporting sales gas on upstream pipelines.

See Area Control Error.

Also called acid precipitation or acid deposition, acid rain is precipitation containing harmful amounts of nitric and sulfuric acids formed primarily by nitrogen oxides and sulfur oxides released into the atmosphere when fossil fuels are burned. It can be wet precipitation (rain, snow, or fog) or dry precipitation (absorbed gaseous and particulate matter, aerosol particles or dust). Acid rain has a pH below 5.6. Normal rain has a pH of about 5.6, which is slightly acidic. The term pH is a measure of acidity or alkalinity and ranges from 0 to 14. A pH measurement of 7 is regarded as neutral. Measurements below 7 indicate increased acidity, while those above indicate increased alkalinity.

Under capacity release, an agreement between a gas pipeline and an acquiring shipper which establishes the terms and conditions for the acquiring shipper using firm capacity rights from a releasing shipper.

In the context of capacity release, a shipper who acquires firm capacity rights from a releasing shipper (also known as "replacement shipper").

The amount of water it takes to cover one acre to a depth of one foot. This measure is used to describe the quantity of storage in a hydrosystem reservoir. An average household of four will use approximately one acre foot of water per year.

Metered electric power that flows from one control area to another.

The actual reduction in annual system peak load (measured in kilowatts) achieved through consumer's participation in a utility DSM (See Demand Side Management) program. It reflects the changes in the demand for electricity resulting from a utility DSM program that is in effect at the same time the utility experiences its annual system peak load, as opposed to the installed peak load reduction capability (i.e. potential peak reduction).

Number of times the unit was synchronized.

In the context of futures trading, actual cash commodities in contrast to futures commodities. In the context of ratemaking, actual costs and throughput data relating to a given time frame.

Tax imposed at a percent of a value. Local property taxes are often ad valorem taxes.

A bulk electric power system's ability to supply the aggregate electrical demand and energy requirements of customers at all times.

The minimum on-line capacity that can be increased or decreased to allow the system to respond to all reasonable demand changes in order to be in compliance with the NERC Control Performance Criteria. See Spinning Reserves.

Any system or control area either directly interconnected with or electrically close to (so as to be significantly affected by the existence of) another system or control area.

A provision in a utility tariff that provides for changes in rates or total charges with changes in specified items of cost, such as No.2 or 6 fuel price, purchased gas, tax, etc.

See COSTS, ADMINISTRATIVE AND GENERAL.

The number of years the unit(s) has been in commercial service.

An arrangement which allows a gas buyer to give an agent authority to act on the buyer's behalf to arrange or administer pipeline transportation and/or sales services.

A coordination requirement which calls for identification of the purchasing-selling entities that "aggregate" an interchange schedule.

A company that consolidates a number of individual users and/or supplies into a group.

A demand-side management program in which the utility remotely controls customers' cooling equipment and periodically interrupts power to the equipment during times of high power system demands.

An agreement among businesses, organizations, or group to work cooperatively toward a common purpose.

Used During Construction (AFUDC) A non-cash accounting convention of regulatory utilities that represents the estimated composite interest costs of debt and a return on equity funds used to finance construction. The allowance is capitalized in the property accounts and included in income.

Firm receipt or delivery point, not including primary points designated in a gas contract, at which a firm shipper may schedule gas receipt or delivery with a priority above that of interruptible service.

The ability of any user such as an industrial facility to use more than one fuel, whether or not the facilities for such use have actually been installed.

A periodic current, the average value of which over a period is zero. Unless distinctly specified otherwise, the term refers to a current that reverses its direction at regularly recurring intervals of time and that has alternately positive and negative values. Almost all electric utilities generate AC electricity because it can easily be transformed to higher or lower voltages.

The supply of electrical energy from one or more major receiving stations to the point of ultimate utilization. The energy is generally supplied at a voltage that can be directly utilized by large rotating machinery and step-down transformers are utilized to reduce the voltage for most commercial or residential utilization.

A futures contract provision in which buyers and sellers make and take delivery under terms and conditions which differ from those imposed in the futures contract.

The on-site availability of apparatus to burn more than one fuel.

The coordinating organization for U.S. federated national standards system. The ANSI federation consists of 1400 company, organization, government agency, institutional and international members.

The unit of measurement of electrical current produced in a circuit by 1 volt acting through a resistance of 1 ohm. The measure of the rate of flow of electrons past a given point in an electric conductor such as a power line.

Automated Meter Reading.

Interconnected Operations Services identified by the Federal Energy Regulatory Commission (Order No. 888 issued April 24, 1996) as necessary to effect a transfer of electricity between purchasing and selling entities and which a transmission provider must include in an open access transmission tariff.

The total effects in energy use (measured in kilowatt-hours) and peak load (measured in kilowatts) caused by all participants in the DSM programs that are in effect during a given period.

A form of coal often referred to as "hard coal," which is generally used in the production of steel, characterized by low volatile matter, low sulfur, low ash, low Hargrove index (indicating a hard coal) and high heating value. Sometimes blended with bituminous coal in sized coal cargoes to increase heating value. Heating value is often at or above 13,500 Btu/lb.

Alaska Power Administration. A power marketing and electric transmission agency of the United States government with headquarters in Juneau, Alaska.

A company that provides businesses with access to application programs via the Internet. The application resides on the ASP's site and the user organization pays a license fee or some other usage charge.

Trading the same security, currency, or commodity in two or more markets in order to profit from differences in prices.

An arbitrageur takes advantage of momentary disparities in prices between markets. Arbitrageurs make markets more efficient by bringing the prices in line with each other.

The instantaneous difference between actual and scheduled power flow between two entities.

The methodology in natural gas pipeline rate design in which all charges that the pipeline paid for transportation, transition costs, etc., pass through to its customers in the same form, demand or commodity, by which those costs were charged to the pipeline,

The average price asked by those persons recently willing to sell a commodity or over -the-counter stock. Bid is the purchase price and asked is the selling or offer price.

An economic resource, tangible or intangible, which is expected to provide benefits to a business.

Not in sync - usually applied to rotating equipment which generates power at a different frequency than the power grid. Synchronization with the grid is obtained through solid state inverters.

A condition placed upon certificates of Public Convenience and Necessity issued by the FERC which places the responsibility for under-recovery of costs regarding pipeline expansion or new construction on the pipeline sponsor and/or new customers, rather than on the pipeline's other customers.

In futures trading, the placement of an order immediately at the best price available on the trading floor.

Describes the price relationship of an option's strike price and the current market price of the underlying instrument. A call or a put option is said to be "at-the-money" when the option's strike price equals the current market price of the underlying instrument.

See PRESSURE, ATMOSPHERIC.

Number of attempts to synchronize the unit after being shut down. Repeated failures to start for the same cause, without attempting corrective action, are considered a single attempt.

A coal mining process used to recover coal that is otherwise difficult or impossible to access, due to high cover or where pre-existing (Civil War, etc.) mine works make the coal too hazardous to recover. An auger is similar in appearance to a large wood drill, and several augers can be attached one to the other to a length of up to 250 feet, although 200 feet of depth is generally considered the practical maximum depth of drilling. This is inexpensive mining, but is not favored by many landowners, who want the maximum amount of coal taken from their reserve.

Equipment which automatically adjusts an electric power control area's generation from a central location.

Special protection systems (or remedial action schemes) or other operating systems installed on the electric systems that require no intervention on the part of system operators for their operation.

Unit of measure for the actual time a transmission line or generating unit is capable of providing service, if called upon.

Net capability of main generating units that are operable, but not considered necessary to carry load and cannot be connected to load within 30 minutes.

Sum of all Service Hours, Reserve Shutdown Hours, Pumping Hours, Synchronous Condensing Hours; or Period Hours less Planned Outage Hours, Forced Outage Hours, and Maintenance Outage Hours.

Sum of all capacity to which an entity has a legal right including Existing Generating Capacity, New Units Scheduled for Service, the NET of Equivalent Firm Capacity Purchases and Sales less Existing Capacity Unavailable Due to Planned Outages

Unit of measure for the transfer capability remaining in the physical transmission network for further commercial activity, over and above committed uses.

A unit of energy output over a year that is equal to the energy produced by the continuous operation of one megawatt of capacity over a period of time. (Equal to 8,760 megawatt-hours.)

A pricing mechanism based on dividing the total cost of providing electricity incurred in a period by the number MWh (wholesale) and kWh (retail) sold in the same period.

The measure of the total of energy loads placed by customers on a system divided by the time period over which the demands are incurred.

Calculated by dividing the total monthly revenue in any given period by the corresponding total kWh sales.

Revenue from the sale of natural gas to a class of service, exclusive of penalties and forfeited discounts, divided by the corresponding number of units sold. Units may be therms, Btu, or cubic feet.

The calculated average of the twenty-four hourly dry bulb atmospheric temperatures in degrees Fahrenheit recorded for each day. See MEAN TEMPERATURE.

The cost to produce or otherwise procure electric power that an electric utility does not incur because it purchases this increment of power from a qualifying facility (QF). It may include a capacity payment and/or an energy payment component.

Business to Business

Business to Consumer

Business to Employee

Arranging for alternate supplies of gas in the event a user's primary source fails to be delivered.

Power provided by terms of the contract to a customer when normal source is unavailable.

A term used in surface mining to reflect the practice of placing overburden behind the location where the coal seam has been removed, typically using a long reach dragline. The intent is to move the overburden as little as possible to reduce costs. .

A "paper transport" of natural gas by displacement against the flow on a single pipeline, so that the natural gas is redelivered upstream of its point of receipt. See also DISPLACEMENT.

Capacity and energy provided to a transmission customer to replace the loss of its generation sources and to cover that portion of demand that exceeds the generation supply.

In the context of futures trading, a market condition in which futures prices are gradually lowered in the future months of delivery.

Equalizing the volumes of gas withdrawn from a pipeline system with the volumes of gas injected into the pipeline. Penalties may be assessed for transportation imbalances beyond specified tolerances.

A regulatory convention in which costs and revenues associated with certain utility expenses (e.g., fuel) are accumulated but on which no return is earned.

Space or capacity on a communications network. Marketing bandwidth is a rapidly growing business since the Telecommunications Act of 1996 effectively eliminated the barriers to competition among long distance, local exchange and cable service providers.

Energy delivered or received by a utility with intent to return it in the future.

A volumetric unit of measure for crude oil and petroleum products equivalent to 42 US gallons.

The minimum amount of electric power or natural gas delivered or required over a given period of time at a steady rate. The minimum continuous load or demand in a power system over a given period of time usually not temperature sensitive.

The generating equipment normally operated to serve loads on an around-the-clock basis.

A plant which is normally operated to take all or part of the minimum continuous load of a system, and which consequently produces electricity at an essentially constant rate. These plants are operated to maximize system mechanical and thermal efficiency and minimize system operating costs. A base load plant is typically characterized by relatively high fixed costs and low unit operating costs. Traditionally, coal and nuclear plants and some high efficiency steam electric plants have been considered as base load plants.

Generating unit designed for run at or near full capacity on a nearly continuous basis.

A charge normally set through rate proceedings by appropriate regulatory agencies and fixed until reviewed at future proceedings. It is calculated through multiplication of the rate from the appropriate electric rate schedule by the level of consumption. It does not include components that may vary from billing cycle to billing cycle, such as fuel.

The difference between the spot or cash price of a financial instrument or commodity and the price of the futures contract or a related derivative instrument. A seller is "short of the basis" if selling spot goods hedged by the purchases of futures. Someone who is "long of the basis" has bought spot goods and hedged them by the sale of futures. A basis point is one percent of one percent.

In the context of futures trading, the difference between the futures price for a given commodity and the comparable cash or spot price for the commodity.

A basis swap involves swapping one floating rate index for another. An interest rate swap in which payments are on a different floating-rate basis, e.g., three-month versus six-month. Also known as a floating/floating swap. A basis swap enables the user to lock in a differential between two grades, two product types, or two locations of a commodity. This tool is used to fine-tune energy price risk management. (A swap on the differential between a petroleum product and crude oil is often referred to as a "crack spread" swap.)

The abbreviation for 1 billion cubic feet of natural gas.

Service offered to customers under rate schedules or contracts that anticipate and permit some interruption on short notice, generally in peak-load seasons, by reason of the claims of firm service customers.

An offer to pay an asking price in an over -the-counter or commodity market. It is the average price of those people recently willing to purchase. Bid is the purchase price and asked is the selling or offer price.

The fixed rate at which a dealer will take either the pay- or the receive-fixed side of a swap transaction.

A natural gas shipper bidding for capacity released by a firm capacity holder.

A direct contract between the power producer and user or broker outside of a centralized power pool or POOLCO.

The regular periodic interval used by a utility for reading the meters of a customer for billing purposes. Usually meters are scheduled to be read monthly or bimonthly.