Glossary

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.

Generally a payment by a purchaser of natural gas to the seller after the purchaser has failed to take a contractually specified minimum amount of natural gas from the seller.

A measure of the coldness of the weather experienced, based on the extent to which the daily mean temperature falls below a reference temperature, usually 65? F. For example, on a day when the mean outdoor dry-bulb temperature is 35? F, there would be 30 degree days experienced. A measure of seasonal variation and intensity of temperature. In residential customer load, the more degree days in a year than the "average," the higher the utility bill.

The amount of natural gas a well, field, pipeline, or distribution system can supply in a given period of time. Also, the practical output from a gas storage reservoir. See also DELIVERY CAPACITY.

In the context of futures trading, the tendering and receipt of the physical commodity to satisfy a futures contract.

The point on a gas pipeline's system at which it delivers natural gas that it has transported.

An operator responsible for balancing loads and allocating gas quantities received at delivery points to parties who have contracted to receive deliveries at the point.

The rate of change of the theoretical price of an option with respect to a 1 unit move in the price of the underlying instrument. Also referred to as a hedge ratio because the value of Delta represents the ratio of options contracts to underlying instrument contracts required to establish a neutral option hedge.

The rate at which electric energy or natural gas is delivered to or by a system at a given instant or averaged over a designated period, usually expressed in kilowatts or megawatts (electric); Mcfs or MMBtus (natural gas).

The Demand Charge portion of rate design is expected to recover the costs associated with the level of demand for the particular service and will be paid even if no service is taken by the customer; a reservation charge. Included in demand charges are capital-related costs and the cost of operation and maintenance of generation, transmission, and distribution.

A cost included in the total cost of service that is allocated to classes of customers on the basis of service entitlements rather than actual use.

That 24-hour period specified by a supplier-user contract for purposes of determining the customer's daily amount of natural gas used (e.g., 7 am to 7 am). This term is primarily used in pipeline-distribution company agreements. It is similar to, and usually coincides with, the distribution company's "send-out day."

In pipeline rates, a factor established for each firm service customer that is applied against the pipeline's stated demand charge component to determine the customer's actual demand charge amount.

An estimate of the level of energy or capacity that is likely to be needed at some time in the future.

Time period over which electric billing demand is measured (typically 15, 30, or 60 minute intervals).

The term for all activities or programs undertaken by an electric system or its customers to influence the amount and timing of electricity use. Included in DSM are the planning, implementation, and monitoring of utility activities that are designed to influence consumer use of electricity in ways that will produce desired changes in a utility's load shape, such as, among other things, direct load control, interruptible load and conservation.

Demand side resources are those resources which perm it "demand side management."

The loss of value of assets, such as buildings and transmission lines, due to age and wear. Among the factors considered in determining depreciation are wear and tear, decay, action of the elements, inadequacy, obsolescence, changes in the technology, changes in demand, requirements of public authorities, and salvage value. Depreciation is charged to utility customers as an annual expense.

Reduction of a generating unit's net dependable capacity to a point below the manufacturer's nameplate rating.

The elimination of regulation from a previously regulated industry or sector of an industry.

Futures, options, and other contracts derived from underlying instruments such as securities, commodities, or financial instruments.

A derivatives dealer is a classic intermediary. The dealer provides over-the-counter risk management products to end users.

A 24-hour period of demand which is used as a basis for planning capacity requirements.

The amount of each type of service arranged to be available on design day, and the maximum combination of such services.

The mean temperature assumed for a design day.

A convention by which an operator accounts for differences between energy tendered and energy consumed in a bulk power transaction.

The ability of a retail customer to purchase commodity electricity directly from the wholesale market rather than through a local distribution utility.

A means of recovering costs other than by demand or commodity charge to customers; charges are made directly to identified parties, perhaps regardless of their current status as a customer. Direct billing provides a relatively low risk to the pipeline of non-recovery of costs.

An electric current that flows in one direction with a magnitude that does not vary or that varies only slightly.

A natural gas sales transaction in which at least one of the intermediary parties in the natural gas delivery system (i.e., pipeline transmission company or local distribution company) does not take title to the natural gas but only transports it. Historically, a sale of natural gas to an end user, as opposed to a "sale for resale. " More recently, the term has also been applied to a sale by a producer directly to an LDC.

Refers to program activities that can interrupt consumer load at the time of annual peak load by direct control of the utility system operator by interrupting power supply to individual appliances or equipment on consumer premises. This type of control usually involves residential or industrial consumers. Direct Load Control excludes Interruptible Load and other load management effects.

Momentary disturbances in transmission that are undetectable by equipment other than computers and other sensitive electronic equipment.

The breaking up of the traditional electric utility structure from a totally bundled service to an ala carte service. (See Divestiture and Functional Unbundling.)

The term for a utility company that has vertically disaggregated and operates its retail distribution business separately from any other power businesses it may own.

The monitoring and regulation of an electrical or natural gas system to provide coordinated operation; the sequence in which generating resources are called upon to generate power to serve fluctuating loads.

Generation available (contractually or physically) to respond to changes in system demand or to respond to transmission security constraints.

The substitution of less expensive energy generation for more expensive generation. Usually this means reducing or shutting down production at a high cost thermal plant and using cheaper thermal generation and/or hydroelectric power when it is available.

(a) In pipeline transportation, the substitution of a source of natural gas at one point for another source of natural gas at another point. Through displacement, natural gas can be transported by backhaul or exchange. (b) In natural gas marketing, the substitution of natural gas from one supplier of a customer with natural gas from another competing supplier.

A general classification for one of the petroleum fractions produced in conventional distillation operations. It is used primarily for space heating, on-and off-highway diesel engine fuel (including railroad engine fuel and fuel for agriculture machinery), and electric power generation. Included are Fuel Oils No.1, No.2, and No.4; and Diesel Fuels No.1, No.2, and NO.4.

Electric power produced elsewhere than a central station generating unit, such as that using fuel cell technology or on-site small scale generating equipment.

The system of lines, transformers and switches that connect between the transmission network and customer load. The transport of electricity to ultimate use points such as homes and businesses. The portion of an electric system that is dedicated to delivering electric energy to an end user at relatively low voltages.

Mains, service connections, and equipment that carry or control the supply of natural gas from the point of local supply to and including the sales meters. See also PIPELINE SYSTEM.

A company that obtains the major portion of its natural gas operating revenues from the operation of a retail gas distribution system and that operates no transmission system other than incidental connections within its own system or to the system of another company.

Network-like pipeline that transports natural gas from a transmission line to an end-user's service line or to other distribution lines. Generally, large pipelines are laid in principal streets, with smaller lateral lines extending along side streets and connected at their ends to form a grid; sometimes lateral lines are brought to a dead end.

Natural gas lost through leakage or condensation in delivering natural gas to customers through distribution mains.

A system that operates at a pressure higher than the standard service pressure delivered to the customer; thus, a pressure regulator is required on each service to control pressure delivered to the customer.

A system in which the pressure of the natural gas in the mains and service lines is substantially the same as that delivered to the customers' appliances; ordinarily a pressure regulator is not required on individual service lines in a low-pressure natural gas distribution system.

The voltage in the electric system between substation and ultimate utilization. Normally recognized as powerlines that would supply commercial/residential facilities.

Short circuit, broken wire, intermittent connection, or some other event occurring on a power system.

An exchange of capacity or energy, or both, between systems whose peak loads occur at different times.

Ratio of sum of coincident maximum demands of two or more loads to their noncoincident maximum demands for same period.

Corporate separation of generation, transmission and distribution of the traditional vertically integrated regulated utility as a means to eliminate market power.

A state or federal regulatory agency designation or classification of investigations or cases under consideration.

Department of Energy. A cabinet level department of the Executive Branch of the Federal government.

Commercial gas operations which are closer to the market, as opposed to upstream, which is closer to production.

A pipeline receiving natural gas from another pipeline at an interconnection point. Compare UPSTREAM PIPELINE.

Release of water from a reservoir, usually measured in feet of reservoir elevation.

Excavating machine used in the process of surface mining to remove overburden.

The distance the water surface of a reservoir is lowered from a given elevation as the result of releasing water. Drawdown can be expressed in terms of the acre-feet of stored water released.

A coal mine that enters a flat lying coal seam in a mountain, usually at the "outcrop" or location where the seam of coal exits the mountainside.

Equipment installed at the low point in a gas transmission line to collect and remove liquids.

Technically, the temperature registered by the dry-bulb thermometer of a psychrometer. It is identical with the temperature of the air.

Demand -side management.

The capacity of an energy burning facility to use more than one kind of fuel, alternatively.

Provides the technology and administration required to electronically move a transmission customer's generation or demand out of the control area to which it is physically connected and into a different control area.