Glossary

Those costs that are allocated on the basis of actual use of service.

A provision in a rate schedule for an adjustment of a customer's bill if the price of commodities or index of commodity prices varies from a specified standard.

A facility obligated by law to provide service to all potential users without discrimination, with services to be prorated among users in the event capacity is not sufficient to meet all requests. Interstate oil pipelines are common carriers, but interstate natural gas pipelines are not.

These terms may be used interchangeably to refer to a unit in which two or more entities share ownership.

Equal access to all natural gas pipeline transportation services, including storage and gathering, regardless of whether the customer purchases gas from the pipeline or from a third party. FERC Order No. 636 redefined comparability to require equality of service.

Two examples of compound derivatives are:

See Gas.

The action on a material which decreases its volume as the pressure to which it is subjected increases. Natural gas is usually compressed for transport.

The relationship of absolute outlet pressure at a compressor to absolute inlet pressure.

A mechanical device for increasing the pressure of a gas.

Natural gas burned as fuel to operate a compressor.

Facility that provides energy to move natural gas within a pipeline by increasing the pressure of the gas at the discharge side of the facility compared to the intake side.

The liquid resulting when a vapor is subjected to cooling and/or pressure reduction.

Hydrocarbons, existing as vapor in natural gas reservoirs, that condense to liquids as their temperature and pressure decrease when natural gas is produced. Natural gas condensates consist mostly of pentanes (C5H12) and some heavier hydrocarbons. Once condensed, natural gas liquids are usually blended with crude oil for refining. Compare LIQUIDS, NATURAL GAS.

A measure of a material's ability to conduct/transmit an electric charge.

A substance or body, usually in the form of a wire, cable, or busbar, that allows a current of electricity to pass continuously along it.

Pipeline verification that a change in a customer's level of transportation service will be matched by a change in supplier quantities.

Costs that arise from the redispatch of a system due to transmission constraints.

The process of billing for several natural gas demands, services, or meters as if the billing were for a single demand, service, or meter. Conjunctive billing is sometimes referred to as Combined Billing.

The physical junction (e.g., transmission lines, transformers, switch gear, etc.) between two electric systems permitting the transfer of electric energy.

Demand-Side Management (DSM) strategy for reducing generation capacity requirements by implementing programs to encourage customers to reduce their load during many hours of the year. Examples include utility rebate and shared savings activities for the installation of energy efficient appliances, lighting and electrical machinery, and weatherization materials. A resource produced by increasing the efficiency of energy use, production, or distribution.

A generator's high or low output limit, line rating, or other limiting condition on the electrical system.

Cost of construction for additions to, renewals of, and replacements of plant facilities, including overhead and allowance for funds used during construction. Excludes the purchase cost of an acquired operating unit or system of utility plant, accounting transfers and adjustments to utility plant, and cost to remove plant facilities from service. Construction expenditures are capitalized in a utility's rate base.

The account that includes the total of the balances of work orders for work in process of construction. This line item mayor may not be included in the utility's rate base.

The ultimate user of natural gas, as contrasted to a "customer" who may purchase natural gas for resale.

The amount of fuel used for gross generation, providing standby service, start-up and/or flame stabilization.

See HELIUM.

A term used in futures trading meaning that prices are progressively higher in succeeding delivery months than in the nearest delivery month.

A possible event for which preparations are made. Typically the loss of generating capacity or a transmission element.

An additional amount of operating reserve sufficient to reduce area control error to zero in 10 minutes following loss of generating capacity, which would result from the most severe single contingency.

A cutting head mining machine typically using bits mounted onto a rotating drum to cut coal from a coal seam and direct it toward a coal car (wheeled or track conveyance) or conveyor belt to move the coal from the face without interrupting the work of the miner operating the machine except for the occasional insertion of roof bolts above the miner for roof control.

Under Order No. 636, the ability of customers to reduce, in whole or in part, their firm purchase and/or transportation obligations under contracts with their pipeline suppliers. Firm transportation, in contrast to firm sales, cannot be reduced unless the pipeline agrees or an alternative purchaser is found at the maximum price.

A facility that voluntarily provides its services to others on a private contractual basis.

Under FERC Orders No. 500 and 636, the option of pipeline firm sales customers to convert their sales service entitlement to firm transportation service entitlement.

The amount of service a seller agrees to provide on a periodic (daily, monthly, annually) basis. Contract demand is a maximum amount.

A contract between a power supplier and buyer that is referenced to the price prevailing at the pool level.

A NERC control area that has 'connecting facilities in the scheduling path between the sending and receiving control areas and operating agreements which establish the conditions for the use of such facilities.

A Point of Receipt to Point of Delivery route for which capacity rights and contract prices have been established.

The term of effectiveness of a contract.

Natural gas reserves dedicated to fulfill natural gas purchase agreements.

A portion of a power grid which regulates its generation in order to maintain its interchange schedule with other Control Areas or systems and contributes its frequency bias obligation to the Interconnection. All connecting points with other utilities either inside or outside the Control Area must be metered and monitored in real time. A control area must be able to: control its generation to balance continuously its actual interchange and scheduled interchange, and help the entire Interconnection regulate and stabilize the Interconnection's alternating frequency.

Any services provided by an electric utility Control Area operator, or by another qualified provider located within the applicable Control Area, which are required to establish and maintain interchange schedules according to regional reliability council and NERC reliability guidelines.

The process of cutting blocks of coal from the seam by use of coal saws or by using explosives to blast portions of the seam, and thereafter removing the coal from the face of the seam by shovel or small front end loader.

Changing consumer's energy service to natural gas from some other fuel. The term includes adjustment of consumers' appliances to perform satisfactorily with natural gas.

A unit consisting of a burner and associated thermostat and safety controls which can be used to convert heating equipment from one fuel to another.

A structure used to vent steam produced in the generation of power.

A non-profit utility owned by its members. Generally, coops are self-regulated by an elected board of directors.

An electric utility legally established to be owned by and operated for the benefit of those using its service. It will generate, transmit, and/or distribute supplies of electric energy to a specified area not being served by another utility. Such ventures are generally exempt from Federal income tax laws. Many have been initially financed by the Rural Electrification Administration, US Department of Agriculture.

The operation of two or more interconnected electrical systems or a group of hydroelectric plants to achieve greater reliability and economy.

See CAPTIVE CUSTOMER.

Volumes that are typically supplied by the local distribution company to residential and commercial customers, public institutions such as hospitals and schools, and non-industrial companies with relatively small consumption and generally no alternative fuel capability.

The ownership rights of oil/gas producers within a common reservoir.

A procedure in which common or joint costs are apportioned among customers or classes of customers.

A rate based upon a projected cost of service and throughput level, contrasted with a market-based rate determined directly by supply and demand.

In the context of FERC gas rate methodology, the classification of costs between demand and commodity components for purposes of pipeline rate design. Traditional cost classification methodologies include the following:

The weighted average of the cost of various sources of capital, generally consisting of outstanding securities such as mortgage debt, preferred and preference stock, common stock, etc., and retained earnings.

The total amount of money, including return on invested capital, operation and maintenance costs, administrative costs, taxes, and depreciation expense, to produce a utility service. Traditional utility cost of service may be expressed as Operating Costs + Taxes + (Rate of Return x {Cost of Plant - Depreciation]).

A study designed to determine the cost of providing service to various classes of customers; used as a basis for establishing various electric and gas service rates. Factors that must be considered in rate design are the value of the service, the cost of competitive services, the volume and load factor of the system load equalization and stabilization of revenue, promotional factors and their relation to the social and economic growth of the service area, political factors such as the sizes of minimum bills, and regulatory factors.

A tariff specifying that the entity providing the service will be reimbursed for its cost of service, including a specified rate of return on the rate base (distinguished from the usual tariff, providing for charges sufficient to cover the entity's costs of service and return on equity only if the entity meets its projected throughput).

A subset of operation and maintenance expenses that are part of a utility company's cost of service (e.g., salaries, office supplies and expenses, outside services, injuries and damages).

A broad class of expenses that are part of a utility company's cost of service (e.g., production, storage, terminaling, processing, transmission, distribution, customer accounts, customer service, sales, administration and general).

Costs that vary according to the amount purchased (e.g., gas acquisition costs).

A participant in a swap transaction.

In futures trading, to close out a short futures position.

The owner of the option also owns the stock or commodity and purchased a put on it.

Process by which a pipeline evaluates a potential shipper's financial accountability.

The portion of an historical streamflow record that would produce the least amount of energy. The critical period is used to determine the maximum firm load-carrying capability of the present system under "worst-case" conditions.

A graphic representation of the storage level of a surface water reservoir at various times of the year under critical streamflow conditions. The curve serves as a guide to the use of stored water by indicating the level at which storage would become insufficient to meet firm energy loads.

A sequence of stream flows under which the regional hydroelectric system could produce an amount of power equal to that which could have been produced during the Critical Period given today's generating facilities and constraints.

The practice of charging rates higher than the actual cost of service to one class of customers in order to charge lower rates to another class of customers.

See HELIUM, CRUDE.

See Combustion Turbine.

A measurement of water flow representing one cubic foot of water moving past a given point in one second.

The most common unit of measurement of gas volume; the amount of gas required to fill a volume of one cubic foot under stated conditions of temperature, pressure, and water vapor.

Theft of electric power in which current is diverted to bypass the meter. More generally, any type of tampering to obtain unmetered service.

A flow of electrons in an electrical conductor. The rate of movement of the electricity, measured in amperes.

The right of a transmission provider to interrupt transmission when system reliability is threatened or emergency conditions exist.

An option offered by utilities to customers who can accept specified amounts of service reduction in return for reduced energy rates.

Reduction in scheduled capacity or energy delivery as a result of transmission constraints.

An individual, firm or organization that purchases service at one location under one rate classification, contract, or schedule. If service is supplied at more than one location or under more than one rate schedule, each location and rate schedule may be counted as a separate customer. See CLASS OF SERVICE.

A fixed amount to be paid periodically by the customer without regard to demand or energy consumption. See also DEMAND CHARGE.

The costs directly related to serving a customer, regardless of sales volume, such as meter reading, billing, and fixed charges for the minimum investment required to serve a customer.

Number of customers in a given unit of area or on a given length of distribution line.

A comprehensive approach that provides seamless integration of key areas of business that touch the customer - for example, marketing, sales, customer service and field support - through the integration of people, process and technology, by taking advantage of the Internet.

Core processes across an organization, from sales and marketing to service and support, in the field, on the phone and over the Web, that enable a company to connect with customers.

A billing procedure that provides for the billing of a portion of customers each working day so that all customers are billed within a predetermined period, such as one month, two months, etc. See also BILLING CYCLE.

A storage process in which the same quantity of gas is injected into and withdrawn from storage within a prescribed time period. The maximum throughput of natural gas over a specified period of time for which a pipeline system or portion thereof is designed or constructed, not limited by existing service conditions.

In the context of FERC gas rate design methodology, the demand charge component under the modified fixed-variable (MFV) rate design methodology that allocates fixed costs to firm sales customers based on peak usage or entitlement.

In the context of FERC gas rate design methodology, the demand charge component under the modified fixed-variable (MFV) rate design methodology that allocates fixed costs to firm sales customers based on their projections of annual usages.

The total amount of natural gas delivered for a period of time divided by the number of days in the period.

The maximum amount of natural gas per day that a buyer may purchase under the provisions of a gas purchase agreement.

A request for information made by one party to another, typically in conjunction with a regulatory proceeding.

The convention used for prorating an interest rate movement expressed on an annual basis to the percentage of the year represented by the settlement period. Most common are actual/360, actual/365, and 30/360.

With respect to futures contracts, the purchase and sale of a contract on the same day.

The cost, actual or imputed, of borrowing money, Le., interest.

A rate structure that prices successive blocks of power use at increasingly lower per-unit prices. The more energy a customer uses, the lower the average price.

An external account established by owners of nuclear-powered generating plant usually at the direction of a state regulatory commission, to accumulate sufficient funds to finance the final closure of the plant.

The act of ending federal government control over the wellhead price of new natural gas sold in interstate commerce.

A coal mine in which the coal seam is accessed underground, rather than by removing all of the overburden from above the coal seam. Various access methods include the drift, slope and vertical shaft. Such mines typically use the "room and pillar" method, by which approximately 50% of the coal is removed making the "rooms," leaving "pillars" of coal for roof support. Another method of underground method that is gaining rapid popularity is the "longwall" method, by which a cutting head is used to remove all of the coal from the seam, permitting the roof to fall behind the advancing cutting head.

A charge per unit of deficiency imposed when a buyer's actual purchases fall below a required minimum or threshold level, as under a take-or-pay clause or certain forms of gas inventory charge.