Glossary

Incremental Energy Rate.

Incremental Heat Rate.

Occurs when the generation and interchange schedules do not match demand.

A discrepancy between a transporter's receipts and deliveries of natural gas for a shipper. Most pipelines require that a shipper's deliveries to the pipeline and receipts from the pipeline remain in balance over a given period of time or the pipeline may assess charges until the imbalance is cured.

Penalties implemented by a pipeline to provide an incentive for shippers to maintain actual receipts and deliveries at nominated and confirmed levels.

Impairment or asset impairment occurs when, due to changed circumstances, the previously allowed recovery of costs of a regulatory asset through rates is eliminated or removed by action of a regulatory body.

The opposition in an electrical circuit to the flow of alternating current (AG). The ratio of electromotive force to the effective current.

In the context of FERC rate methodology, a determination that certain of a pipeline's costs have not been prudently incurred, with the result that the pipeline is prohibited from placing such costs in its rates. See PRUDENT INVESTMENT.

In the context of FERC rate methodology, an arbitrarily attributed, rather than actual value.

Energy exchanged between a reservoir owner and the owner of a downstream project. The agreement allows reservoir owners to retain water above a reservoir's energy content curve; however, owners of downstream projects may request release of such water. Upstream project owners must then release the water or provide an amount of energy in lieu of the release equal to the amount of energy which could have been generated downstream had the release been made.

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

A control area's accounting of its inadvertent interchange. Adjacent control areas must agree on these values daily. The difference is repaid usually with energy, not money.

The accumulated difference between the control area's net actual interchange and net scheduled interchange.

Rates which permit increased profits as a reward for increases in cost savings and efficiencies.

A pressure unit representing the pressure required to support a column of mercury one inch high; 2.036 inches of mercury is equal to one pound per square inch at sea level.

A pressure unit representing the pressure required to support a column of water one inch high. Usually reported as inches W.C. (water column); 27.68 inches of water is equal to one pound per square inch.

The change in total costs when. output is increased or decreased by an increment or block of output for which costs can be accurately determined, usually calculated as the change in cost divided by the change in volume (for example as cents per Mcf); marginal cost.

Cost incurred by producing or purchasing next available unit of energy (gas, electricity, oil, coal, etc.).

Efficiency of a plant in producing the next increment of additional output. Expressed in Btu/kWh.

Contract provision that allows for future price adjustments that cannot be determined when the contract is executed; e.g., area rate clause, most favored nations clause.

A non-utility power generating entity, defined by the 1978 Public Utility Regulatory Policies Act, that typically sells the power it generates to electric utilities at wholesale prices.

The independent system operator (ISO) has been granted the authority by multiple utilities to operate in a nondiscriminatory manner all the transmission assets of a fixed geographic area.

A measure of relative value attached to a specific commodity or group of commodities or stocks. An index option is an option contract based on an index instead of an individual stock or commodity. A measure of market trends.

Tying the commodity price of gas in a contract to published prices.

A situation in which large industrial customers buy power directly from a non-utility generator, bypassing the local utility system. Deregulation of generation and transmission in some instances has opened up the opportunity for large electricity users to purchase services from a supplier other than the local retail utility.

The industrial customer is generally defined as manufacturing, construction, mining, agriculture, fishing and forestry establishments, Standard Industrial Classification (SIC) codes 01-39. The utility may classify industrial service using the SIC codes, or based on demand or annual usage exceeding some specified limit. The limit may be set by the utility based on the rate schedule of the utility.

Drilling between existing well locations for the purpose of increasing reserves or productive capacity.

Natural gas placed in underground storage or returned to the producing reservoir to maintain pressure.

The designed rate of fuel acceptance by a burner.

Rate of energy use at any given instant.

The ability to change deliveries on a pipeline simultaneously with a change in nominations on the same business day.

Average of instantaneous demands over a time interval.

A company that obtains significant portions of its natural gas revenues from the operations of both a retail natural gas distribution system and a natural gas transmission system.

A public planning process and framework within which the costs and benefits of both demand and supply side resources are evaluated to develop the least total cost mix of utility resource options. In many states, IRP includes a means for considering environmental damages caused by electricity supply/transmission and identifying cost effective energy efficiency and renewable energy alternatives. IRP has become a formal process prescribed by law in some states and under some provisions of the Clean Air Act Amendments of 1992.

The process of finding a seller and buyer for an interchange transaction, plus reserving transmission and Interconnected Operations Services.

Interchange energy agreements assure all parties an equal ability to serve their firm loads. If a party cannot meet its load in a given month, that party has the right to request interchange energy from another that has a surplus. The party with excess is obligated to meet the request. The price of interchange energy is set by parties to the agreement.

The net of all power flows across the tie lines of a given control area or the net of all power flows between two adjacent control areas.

The planned energy interchange between control areas. It is the algebraic sum of all interchange transactions between two control Areas.

An agreement, arranged by purchasing-selling entities' merchant function, to transfer energy from a point of receipt to a point of delivery .

Services offered on a voluntary basis by transmission providers to transmission customers in addition to ancillary services.

A system which has two or more power systems normally operating in synchronism and having connecting tie lines.

When this term is capitalized (Interconnection), anyone of the four synchronized bulk electric system networks in North American Electric Reliability Council: Eastern, Western, ERCOT, and Quebec, which are only connected through DC ties. When this term is not capitalized (interconnection), the facilities that connect two systems or control areas.

The direct interconnections between two areas or between two areas comprising one or more electrical systems.

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

Capacity designed to operate less hours than baseload but more than peaking capacity (typically 20% -60%).

The range from base load to a point between base load and peak. This point maybe the midpoint, a percent of the peakload, or the load over a specified time period.

A plant in which the prime mover is an internal combustion engine. An internal combustion engine has one or more cylinders in which the process of combustion takes place, converting energy released from the rapid burning of a fuel-air mixture into mechanical energy. Diesel or gas-fired engines are the principal types used in electric plants. The plant is usually operated during emergencies or periods of exceptionally high demand for electricity.

The magnitude of customer demand that, in accordance with contractual arrangements, can be interrupted by direct control of the system operator, remote tripping, or by action of the customer at the direct request of the system operator.

Gas sold to customers with a provision that permits curtailment or cessation of service at the discretion of the supplier under certain circumstances, as specified in the service contract.

Demand that can be interrupted by direct action of the supplying system's system operator in accordance with contractual provisions at times of seasonal peak load. It usually involves commercial and industrial consumers. In some instances the load reduction may be affected by direct action of the system operator (remote tripping) after notice to the consumer in accordance with contractual provisions. For example, loads that can be interrupted to fulfill planning or operation reserve requirements should be reported as Interruptible Load. Interruptible Load as defined here includes Direct Load Control and Other Load Management.

The market for natural gas that is consumed outside the state in which it is produced or is transported by an interstate pipeline pursuant to NGA authorization, or both. Gas sold to an interstate pipeline is sold in the interstate market.

A natural gas pipeline company that is .engaged in the transportation of natural gas across state boundaries, and is therefore subject to FERC jurisdiction and/or FERC regulation under the NGA.

The market for natural gas consumed in the same state as it is produced, without the natural gas having been transported by an interstate pipeline.

A natural gas pipeline company that is engaged in the transportation of natural gas not subject to the FERC jurisdiction under the NGA.

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

A utility organized under state law as a publicly traded corporation for the purpose of providing electric power service and earning a profit for its stockholders.

A bill covering service for a period less than or in excess of the regular billing cycle.

A part of one or more power systems electrically separated from the main grid as a result of the tripping of transmission system elements.