• Obligation to Serve

    The obligation of a utility to provide electric service to any customer who seeks that service, and is willing to pay the rates set for that service. Traditionally, utilities have assumed the obligation to serve in return for an exclusive monopoly franchise.

  • Off Peak

    The period during a day, week, month or year when the load being delivered by a natural gas or electric system is not at or near the maximum volume delivered by that system for a similar period of time. (night vs. day; Sunday vs. Tuesday)

  • Off-Peak Gas

    Natural gas supplied during periods of relatively low system demands.

  • Off-System Sale

    Sale by a pipeline to a customer other than one of its own traditional firm sales customers.

  • Off-System Supply

    Natural gas supply purchased from other than the delivering pipeline or local distribution company. See SYSTEM SUPPLY.

  • Offer

    A proposal to sell a futures contract at a specified price.

  • Offset

    The liquidation or closing out of an open contract position.

  • Offshore

    Any area in the United States federal offshore, i.e., three miles or more offshore, except ten miles or more offshore Texas. A well may be located completely under state waters miles from land and still be classified as an onshore well.

  • Ohm

    The unit of measurement of electrical resistance. The resistance of a circuit in which a potential difference of 1 volt produces a current of 1 ampere.

  • Oil, Heavy

    Heavy, thick and viscous oils, particularly those found naturally in certain reservoirs in and around Kern County, California, and refinery residuals commonly specified as grades 5 and 6.

  • On-Peak Energy

    Electricity supplied during a period of high system demands as specified by the supplier.

  • One Hundred Percent Load Factor

    The circumstance in which a customer actually takes all of the service to which it is entitled during a specific period of time.

  • Onshore

    Any area within the United States other than that classified as offshore.

  • Open Access

    Non-discriminatory, fully equal access to transportation or transmission services offered by a pipeline or electric utility.

  • Open Contract, Interest or Commitment

    Future(s) contracts during a given period of time which have not been satisfied by an offsetting sale or purchase or actual delivery.

  • Open Order

    An order that is good until cancelled.

  • Open Outcry

    Public auction with verbal bids in the trading pits.

  • Open Season

    A period of time in which potential customers can bid for pipeline services, and during which such customers are treated equally regarding priority in the queue for service.

  • Operable Nuclear Unit

    A nuclear unit is "operable" after it completes low-power testing and is granted authorization to operate at full power. This occurs when it receives its full power amendment to its operating license from the Nuclear Regulatory Commission.

  • Operated by Others

    A property in which a producer has an interest but of which it is not the operator.

  • Operating Procedures (contingency)

    A set of written step-by-step practices or procedures that may be automatically implemented, or manually implemented by the system operator within a specified time frame, to maintain the operational integrity of the interconnected electric systems when specific anticipated contingencies occur. These actions or system adjustments may be implemented in anticipation of or following a system contingency (facility outage) or system disturbance, and include, among others, opening or closing switches (or circuit breakers) to change the system configuration, the redispatch of generation, and the implementation of Direct Control Load Management or Interruptible Demand programs.

  • Operating Reserve

    The reserve generating capacity necessary to allow an electric system to recover from generation failures and provide for load following and frequency regulation. It consists of spinning and non-spinning reserves.

  • Operating Security

    The ability of a power system to withstand or limit the adverse effects of any credible contingency to the system including overloads beyond emergency ratings, excessive or inadequate voltage, loss of stability or abnormal frequency deviations.

  • Operating Security Limit

    The value of a system operating parameter (e.g. total power transfer across an interface) that satisfies the most limiting of prescribed pre- and post-contingency operating criteria as determined by equipment loading capability and acceptable stability and voltage conditions.

  • Operational Balancing Agreements (OBAs)

    Agreements between pipelines and parties at delivery or receipt points, whereby the parties agree to specified procedures for balancing discrepancies between the nominated levels of service and the actual quantities. The agreements specify gas custody transfer procedures for confirmation of scheduled quantities at specific points.

  • Operational Flow Orders (OFOs)

    Orders which are issued by a pipeline to protect the operational integrity of the line. The orders may either restrict service or require affirmative action by shippers, such as line pack or 'draft.

  • Operator

    The party in control of the physical operation and maintenance of a well or other facility.

  • Option

    The right but not the obligation to buy or sell something at a specified price for a specified time period. The seller of an options contract receives a premium from the buyer of the option and has the obligation to deliver if the contract is exercised by the buyer. Options are also referred to as Caps, Floors, or Ceilings. (See Put Option and Call Option.)

  • Option Charge

    A set unit fee or demand charge to be paid at the outset by the recipient of a service based on total entitlement. See also RESERVATION FEE.

  • Option on Swap

    A market maker writes an option to a counterparty to take out a swap at a future date on pre-specified terms. The counterparty will pay a premium for such an option.

  • Order No. 497

    A FERC order having to do with the activities of marketing affiliates of interstate natural gas pipeline companies. Among other things, Order 497 proscribes the sharing of certain information with marketing affiliates without concurrent disclosure to non-affiliates.

  • Out-of-the-Money Option

    The price relationship of an option's strike price to the current market price of the underlying instrument. A call option is out-of-the-money if its strike price is above the price of the underlying instrument. A put option is out-of-the-money if its strike price is below the market price of the underlying instrument.

  • Outage

    Periods, both planned and unexpected, during which power system facilities (generating unit, transmission line, or other facilities) cease to provide generation, transmission, or the distribution of power.

  • Over-the-Counter Market

    A general name for any transaction that does not take place on an exchange. There is no central exchange facility for an over-the-counter market which operates through "middlemen", or dealers. The dealer stands ready to buy or sell a given security on request. The dealer provides the service of allowing the buyer or seller of an asset to make the exchange when he or she desires, rather than waiting to locate a party who wants to do business. An over-the-counter option is a call or a put whose strike price, expiration, and premium are negotiated between two parties.

  • Overburden

    Earth and rock layers covering coal seam.

  • Pacific Northwest Coordination Agreement

    An agreement between federal and non-federal owners of hydroelectric generation on the Columbia 'River system, which resulted from the 1964 Columbia River Treaty. The PNCA governs the release of stored water to obtain the maximum usable energy and directs operations of the major generating facilities as if they belonged to a single owner.

  • Paper Hearing

    A process used by FERC to expedite decisions on the basis of a written record submitted directly to the Commission, instead of an oral hearing before an Administrative Law Judge.

  • Parallel Path Flow

    The flow of electric power on an electric system's transmission facilities resulting from scheduled electric power transfers between two other electric systems.

  • Participating Collar

    Unlike a standard collar, which requires the hedger to give up the benefit of favorable prices on one side of the band, a participating collar allows the hedger to participate in a portion of the price decline below the lower level of the band.

  • Participating Swap

    A swap which is structured to hedge floating rate exposure while allowing the hedger to retain some benefit from a favorable move in rates.

  • PCBs

    Synthetic chemicals (polychlorinated biphenyls), manufactured from 1929 to 1977, found in electrical equipment, such as voltage regulators and switches, and used to cool electrical capacitors and transformers. The manufacture of PCBs was banned in 1979.

  • Peak Day Demand

    The maximum daily quantity of gas used during a specified period, such as a year.

  • Peak Demand

    The maximum load during a specified period of time.

  • Peak/Energy Exchange

    Exchange of peaking capacity for off-peak energy between two or more systems.

  • Peak Load

    The maximum load consumed or produced by a unit or group of units in a stated period of time.

  • Peak Load Plant or Peaker Unit

    A plant usually housing low-efficiency, quick response steam units, gas turbines, diesels, or pumped-storage hydroelectric equipment normally used during the maximum load periods. Peakers are characterized by quick start times and generally high operating costs, but low capital costs.

  • Peak Responsibility

    The load of a customer, a group of customers or part of a system at the time of occurrence of the system peak load.

  • Peak Shaving

    Methods to reduce the peak demand for gas or .electricity.

  • Peaking Capacity

    Capacity of generating equipment normally reserved for operation during the hours of highest daily, weekly, or seasonal loads. Some generating equipment may be operated at certain times as peaking capacity and at other times to serve loads on an around-the-clock basis.

  • Peaking Supply

    A supply of natural gas that is available to meet peak demand. Peaking supply is generally associated with seasonal demand, i.e., colder than normal days. Peaking supply may be provided out of storage facilities, from LNG facilities, from Btu enhancement through the injection of propane or other high Btu substances, or other means.

  • Peaking Supply Service

    A service that entitles a buyer to a certain quantity of natural gas delivered at the buyer's request during peak periods.

  • Performance Based Rate

    A method of establishing rates which departs from the cost-of-service standard in setting just and reasonable utility rates. Performance Based Rates generally afford utilities the opportunity to increase profits by exceeding targets for efficiency and cost savings. This type of methodology purports to streamline regulatory process by replacing rate hearings with annual, accounting-type reviews. Cost of service studies might not be required at all, once initial rates are fixed.

  • Period Hours

    Number of hours a unit was in the active state. A unit generally enters the active state on its service date.

  • Permeability

    A measure of the ease with which a fluid flows through rock in response to pressure differences (measured in darcys). Permeability implies that there is some degree of porosity in the rock.

  • Petroleum

    A complex mixture of various hydrocarbons existing in the liquid state found in natural underground reservoirs, often associated with gas. Petroleum includes fuel oil No.2, No.4, No.5, No. 6; topped crude; kerosene; and jet fuel.

  • Petroleum Coke

    A final product, often called a "waste product," of the petroleum refining process, which is the output of the refinery after all of the higher distillates and oils have been distilled from crude oil, leaving a product that has the appearance of coal, and can be found in various types of petroleum coke, depending on the size of the output product, including "sponge, " "shot," and "fluid" coke. Petroleum coke may be calcined for specialty uses, including anode production or it may be burned as fuel in various process, ranging from power plants to cement kilns, which is currently the largest single use of petroleum coke. The fuel product is typically high in sulfur (although there are exceptions), low in volatile matter, low in ash and low in moisture. Heating value is typically 14,200 Btu/lb.

  • Petroleum Industry Data Exchange

    API's Subcommittee serving as an action group for the oil and gas industry.

  • Photovoltaic Conversion

    The process of converting the sun's light energy directly into electric energy, through the use of photovoltaic cells.

  • Pig

    A cylindrical device that is inserted into a pipeline to clean or monitor the pipeline wall.

  • Pipeline

    An entity engaged in the transportation of natural gas in interstate or intrastate commerce. Also, the actual facility itself.

  • Pipeline Day

    An arbitrary 24-hour period of time established by a pipeline for the operation of its system, often beginning at seven or -eight o'clock in the morning.

  • Pipeline Interconnection

    A point at which facilities of two or more pipelines interconnect.

  • Pipeline Quality


  • Pipeline System

    A collection of pipeline facilities used to transport natural gas from source of supply to burner tip, including gathering, transmission, or distribution lines, treating or processing plants, compressor stations, and related facilities.

  • Plain Vanilla

    A term used to describe the most basic form of a single-currency, constant-notional-principal interest rate swap in which fixed-rate cash flows are exchanged for floating-rate payments.

  • Planned Derating

    Advance reduction in capacity required by scheduled removal of a component for repairs with a predetermined duration.

  • Planned Outage

    The removal of a unit from service to perform work on specific components that is scheduled well in advance and has a predetermined duration (e.g., annual overhaul, inspections, testing).

  • Plant

    A facility at which are located prime movers, electric generators, and auxiliary equipment for converting mechanical, chemical, and/or nuclear energy into electric energy. A plant may contain more than one type of prime mover. Electric utility plants exclude facilities that satisfy the definition of a qualifying facility under the Public Utility Regulatory Policies Act of 1978. A station.

  • Plant Factor

    The ratio of the average generation and capacity of a plant during a specified period of time, expressed as a percentage. Sometimes called capacity factor.

  • Plant Thermal Reduction (PTR)

    The Btu equivalent of the liquid products extracted from natural gas by a processing plant, plus the natural gas used as plant fuel to extract those liquids, plant flare and other losses. When expressed as a volume (in MCf), plant thermal reduction is referred to as Plant Volume Reduction (PVR).

  • Plant-Use Electricity

    The -electric energy used in the operation of a plant. This energy total is subtracted from the gross energy production of the plant; for reporting purposes the plant energy production is then reported as a net figure. The energy required for pumping-storage plants is, by definition, subtracted, and the energy production for these plants is then reported as a net figure.

  • Point of Unbundling

    The farthest point upstream on a pipeline's system (usually in or contiguous to the production area) when transportation is unbundled from the sale and the point at which title to the gas passes.

  • Point or Tick

    The smallest monetary unit of change in a futures price.

  • Point-to-Point Service

    (Similar to the concept of contract path) Point-to- point service provides a -customer the ability to use only that portion of a transmission owner's integrated facility to input power at a specified point and take out the power at a specified point regardless of actual flow.

  • Poolco

    Poolco refers to a specialized, centrally dispatched spot market power pool that functions as a short term market. It establishes the short term market clearing price and provides a system of long term transmission compensation contracts. It is regulated to provide open access, comparable service and cost recovery. A poolco would make ancillary generation services, including load following, spinning reserve, backup power, and reactive power, available to all market participants on comparable terms. In addition, the Poolco provides settlement mechanisms when differences in contracted volumes exist between buyers and sellers of energy and capacity.

  • Pooling Point

    The point (either physical or theoretical) at which gas is aggregated from many receipt points in order to serve several contracts without tying a specific receipt point to a specific contract. "Paper pooling" refers to aggregation as a matter of accounting, as opposed to physical pooling in a supply basin.

  • Porosity

    The presence of spaces (pores) between the grains of sand making up a rock formation. Porosity is measured by dividing pore volume by total rock volume.

  • Portal

    Any entrance to a mine.

  • Portal

    An internal or external Web site that functions as an informational hub, aggregating links that connect the portal's users to various information sources. Portals are typically positioned as starting points for users.

  • Position

    In futures trading, one's status as long or short.

  • Post-Contingency Operating Procedures

    Operating procedures that are invoked by the system operator to mitigate or alleviate system problems after a contingency has occurred.

  • Power

    A term usually meant to imply both capacity and energy. The rate at which energy is transferred. Electrical energy is usually measured in watts.

  • Power Authorities

    Quasi governmental agencies that perform all or some of the functions of a public utility.

  • Power Factor

    The fraction of power actually used by a customer's electrical equipment compared to the total apparent power supplied, usually expressed as a percentage. Power factors apply only to alternating current circuits; direct current circuits always exhibit a power factor of 100 percent. A power factor indicates how far a customer's electrical equipment, causes the electric current delivered at the customer's site to be out of phase with the voltage.

  • Power Factor Adjustment

    A calculation or charge on industrial or commercial customers' bills reflecting an adjustment in billing demand based on customer's actual metered power factor. If the power factor stays within a specified range, there is no adjustment.

  • Power Marketing Administrations

    Congress established five federal power marketing administrations (PMAs) to sell hydroelectric power generated by federal dams and power plants. These PMAs and their headquarters are:

  • Power Plant

    An industrial facility that has the production of kilowatt hours of power as its primary product. The power is produced from a raw material such as oil, coal, or nuclear. A plant that converts mechanical energy to electric energy. (See generation, real power, and reactive power.)

  • Power Pool

    An entity established to coordinate short-term operations to maintain system stability and achieve least cost dispatch. The dispatch provides backup supplies, short-term excess sales, reactive power support, and spinning reserve. Historically, some of these services were provided on an unpriced basis as part of the members' utility franchise obligations. Coordinating short-term operations includes the aggregation and firming of power from various generators, arranging exchanges between generators, and -establishing (or enforcing) the rules of conduct for wholesale transactions. The pool may own, manage and/or operate the transmission lines ("wires") or be an independent entity that manages the transactions between entities. Often, the power pool is not meant to provide transmission access and pricing, or settlement mechanisms if differences between contracted volumes among buyers and sellers exist.

  • Prearranged Release

    An arrangement set between a shipper releasing firm transportation capacity and a prospective acquiring shipper.

  • Preference

    A legal directive that gives publicly owned utilities and cooperatives priority access to federal power.

  • Preference Customers

    Publicly owned utilities and non-profit cooperatives which by law have preference over investor-owned systems and industrial customers for the purchase of power from federal projects.

  • Preferred Voltage Zone or Range

    The range of voltages within which utilization equipment will provide optimum performance. Voltage control equipment and distribution circuits have been designed and operate to maintain voltages within the Preferred Zone limits so to produce optimum operation of customer equipment. (See Chart.)

  • Preliminary Determination

    Conditional approval granted by FERC after the review of all the terms and conditions of a proposed -construction project.

  • Premium

    In the context of sales of natural gas, a price differential reflecting differences in the quality of the product, services, or relationships, particularly for long-term firm commitments as opposed to spot sales.

  • Premium Customer

    A customer that has a high value to the seller, such as a customer that takes at a consistent high load factor, or that pays a high incremental or premium price for the product.

  • Preparation Plant

    A facility which crushes, sizes and washes coal prior to shipment.

  • Pressure, Absolute (PSIA)

    Pressure above that of a perfect vacuum; the sum of gauge pressure and atmospheric pressure.

  • Pressure, Atmospheric

    The pressure of the weight of air and water vapor on the earth's surface. The average atmospheric pressure at sea level has been defined for scientific purposes as 14.696 pounds per square inch. The American Gas Association, the FERC and all other federal agencies have adopted 14.73 pounds per square inch as the standard pressure base.

  • Pressure, Base

    A standard pressure to which measurements of a volume of natural gas are referred.

  • Pressure Base

    The factor for pressure used in determining a gas's volume, expressed in terms of pounds of pressure per square inch that the gas would exert on the walls of a one-cubic-foot container.