Glossary

A transmission or distribution system that is not networked and does not provide multiple parallel flow paths.

Railroad and railway services include electricity supplied and services rendered to railroads and interurban and street railways, for general railroad use, including the propulsion of cars or locomotives, where such electricity is supplied under separate and distinct rate schedules.

The Demand Charge level that a customer pays each month regardless of actual consumption. The demand charge is based on the peak consumption rate during a rolling period of time (usually 12 months.)

The unit charge or charges made by an energy company or utility to customers for energy. Rate structures include:

The value of property upon which a utility is given the opportunity to earn a specified rate of return as established by a regulatory authority. The rate base generally represents the value of property used by the utility in providing service and may be calculated by anyone or a combination of the following accounting methods: fair value, prudent investment, reproduction cost, or original cost. The rate base may include a working capital allowance covering such elements as cash, working capital, materials and supplies, prepayments, minimum bank balances and tax offsets. The rate base may be adjusted by deductions for accumulated provision for depreciation, contributions in aid of construction, accumulated deferred income taxes, and accumulated deferred investment tax credits.

The development of electricity prices for various customer-classes to meet revenue requirements dictated by operating needs and costs within current regulatory and legislative policy goals.

The profit a regulated utility is given the opportunity to earn. The allowed rate of return is the percentage determined by the jurisdictional state or federal commission based on standards including the cost of capital in other sectors with comparable risk. The achieved rate of return is the actual result the utility obtained over any given period. In the utility industry, rate of return usually refers to the rate of return on rate base. (See Revenue Requirement.)

The rates, charges and provisions under which service is supplied to a designated class of customers. Also referred to as a Service Classification.

A reservoir located downstream from a hydroelectric peaking plant which stores the widely fluctuating discharges from the upstream plant in order to release them downstream in a relatively uniform manner.

Rural Electrification Administration.

Reactive power is utilized to control voltage on the transmission network, particularly, the portion of the electrical power flow incapable of performing real work or energy transfer (See Real Power). Reactive power is that portion of electricity that establishes and sustains the electric and magnetic fields of alternating current equipment. It must be supplied to most types of magnetic equipment, such as motors and transformers. It also must supply the reactive losses on transmission facilities. Reactive power is provided by generators, synchronous condensers, or electrostatic equipment, such as capacitors, and directly influences electric system voltage. It is measured in megavars.

The production of electric current that leads-or lags the phase of the electric voltage. Reactive power supplies the charging power for electromagnetic loads and the reactive needs of the transmission system.

The portion of the electrical power flow capable of performing real work or energy transfer. Real power is utilized to supply customer load on the transmission network and is expressed in megawatts.

Compensates for losses measured in KWh incurred by the Host Control Area(s) as a result of the interchange transaction for a transmission customer.

Time of day pricing whereby the customer receives frequent signals on the cost of consuming electricity at that time.

The process under Order No. 636 whereby an agent may act on behalf of a customer to arrange supply, storage and/or transportation service and sell these combined services to a customer.

The provision for a wholesale seller of power to cease to perform, generally in order to use such power to serve its indigenous retail loads.

Transmission Capability - Transmission Reliability Margin - Contracted Recallable Transmission Service - Non-Recallable Transmission Service = Recallable Available Transmission Capability

The point on a pipeline's system at which it receives natural gas into its system.

The control area within whose metered boundaries a schedule of capacity and/or energy is consumed. Absent other offsetting simultaneous interchange schedules, the Receiving Control Area will accept a net import schedule of capacity and/or energy, in lieu of, or in addition to, its own generation to meet Control Area load requirements.

Requires those that own, control or operate transmission facilities and request open-access service to, in turn, provide open access service to the transmitting utility.

The quantity of natural gas determined to be economically recoverable and available for delivery from a well or wells at a given price over a specific period of time.

Delivery of natural gas by a pipeline, back to a shipper or to a shipper's account that the pipeline had received from the shipper.

The annual process of filling a reservoir; also refers to the point at which the hydroelectric system is considered "full" from the seasonal snowmelt runoff.

See HELIUM, REFINED.

A chemical process that uses heat in presence of a catalyst to break down a substance into desired components; e.g., natural gas or light oils may be reformed into lower Btu fuel gas. Also used to describe the process of refining gasoline designed to burn with fewer emissions.

The most recent just and reasonable gas rate approved by the FERC, which is the lower limit that can be used for calculating refunds resulting from a subsequent rate case.

The plan that .explains how the Regional Council will meet the NERC Operating Policies that deal with operational security.

A proposal advanced by the FERC to establish regional groups to expedite the coordination of wholesale wheeling. The group is voluntary in each region and may include transmission system owners, wholesale purchasers, and independent power generators.

The amount of spinning reserve responsive to automatic generation control, which is sufficient to provide normal regulating margin.

The governmental function of controlling or directing economic entities through the process of rulemaking and adjudication.

The process whereby one control area contracts to provide correct response to all or a portion of the ACE of another control area. The controlling utility assumes the obligation of meeting all applicable control criteria as specified by NERC.

A contractual provision whereby a party is excused from performance due to the actions of a jurisdictional regulatory agency.

A principal momentum indicator or price oscillator used with natural gas futures. RSI values fluctuate between 0 and 100, 70+ indicates an overbought market and 30 or less indicates an oversold market.

A shipper who is the original capacity holder of firm space on a pipeline for which reservation fees are paid, and who desires to sell this capacity under the capacity release program.

The degree to which the performance of the elements of a system results in power being delivered to consumers within accepted standards and in the amount desired. The degree of reliability may be measured by the frequency, duration, and magnitude of adverse effects on consumer service.

A remotely controlled unit which gathers accumulated and instantaneous data to be telemetered to a specified control center which displays the current status of the generation facility. Inputs can be used for economic dispatch.

A permit for the removal (export) of gas from a given Canadian province issued by the appropriate government body.

A power source that is continuously or cyclically renewed by nature, i.e., solar, wind, hydroelectric, geothermal, biomass or similar sources of energy.

A shipper who acquires firm transportation capacity after release by another shipper under the capacity release program. (Also known as "acquiring shipper.")

The partial or complete replacement of the existing steam supply system with a new (and usually technologically different) steam supply system. Most other systems and components, including the steam-turbine generator, are refurbished and reused. Repowering generally increases the output of the plant and reduces its heat rate, thus improving overall efficiency.

Forcing natural gas or water, under pressure, into the oil reservoir in an attempt to increase the recovery of crude oil.

A sale by a supplier to a purchaser in which the seller pledges to meet all of the purchaser's requirements, or the purchaser pledges to buy all of its requirements from the seller, or both.

A sale by a supplier to a purchaser in which the seller pledges to meet a part of the purchaser's energy requirements.

Change in a generator's capability as a result of changes in conditions such as age, auxiliary equipment, cooling, etc.

The design and implementation of regulatory practices to be applied to the remaining regulated entities after restructuring of the vertically integrated electric utility. The remaining regulated entities would be those that continue to exhibit characteristics of a natural monopoly, where imperfections in the market prevent the realization of more competitive results, and where, in light of other policy considerations, competitive results are unsatisfactory in one or more respects. Reregulation could employ the same or different regulatory practices as those used before restructuring.

A set unit charge payable at the outset by the recipient of a service based on total entitlement. Similar to an "option" charge or "demand" charge. Currently used by natural gas transmission pipelines for firm transportation service.

Capacity in excess of that required to-carry peak load, available to meet unanticipated demands for power or to generate 'Power in the event of loss of generation.

The amount of unused available -capability that can be applied to the system within 10 minutes at peakload for a utility system, expressed as a percentage of total capability.

A state in which the unit was available for service but not electrically connected to the transmission system for economic reasons.

Natural gas in natural underground formation in wells, fields or pools.

An estimate used to project the productive life of a field based upon the size of the field compared to the annual production capacity.

Man-made: A structure which stores water for later use in the production of electricity. Natural: A rock stratum that forms a trap in which oil and natural gas may accumulate.

The residential sector is defined as private household establishments which consume energy primarily for space heating, water heating, air conditioning, lighting, refrigeration, cooking and clothes drying. The classification of an individual consumer's account, where the use is both residential and commercial, is based on principal use.

The topped crude of refinery operation after the removal of valuable distillates like gasoline; includes No.5 and No.6 fuel oils: Residual fuel oil is used for the production of electric power, space heating, vessel bunkering, and various industrial purposes. Imports of residual fuel oil include imported crude oil burned as fuel.

The use of smaller amounts of physical resources to produce the same product or service. Resource efficiency involves a concern for the use of all physical resources and materials used in the production and use cycle, not just the energy input.

In futures trading, an order away from the market waiting to be executed.

Source of power which enables a host control area to restore its system and a transmission customer to start its generating units or restore service to its customers when local power is not available.

The unbundling of pipeline transportation, storage, gathering and sales services and associated realignment of service obligations resulting from Order No. 636.

Sales covering electrical energy supplied for residential, commercial, and industrial end-use purposes. Other small classes, such as agriculture and street lighting, also are included in this category.

A system under which more than one electric provider can sell to retail customers, and retail customers are allowed to buy from more than one provider. (See also Direct Access)

The sale of electricity by a utility or other supplier to a customer in another utility's retail service territory. Refers to the use of the local utility's transmission and distribution lines to deliver the power from a wholesale supplier to a retail customer by a third party.

A practice prohibited under the Natural Gas Act which bars increasing gas rates on a retroactive basis.

A measure of the effectiveness of a business in using its sources of capital to generate earnings. It is a measure of EBIT divided by capital employed. Capital employed represents the total debt and equity components of the balance sheet.

Compensation for the investment of capital; i.e., earnings. Regulated public utilities statutorily entitled to charge rates that permit them to earn a fair return on their equity invested.

A fundamental measure of the earning power of a company. It is equal to earnings before interest and taxes times one minus the tax rate, all divided by total assets minus current liabilities.

The total amount of money received by a firm from sales of its products and/or services, gains from the sales or exchange of assets, interest and dividends earned on investments, and other increases in the owner's equity except those arising from capital adjustments.

The amount of funds (revenue) a utility must take in to cover the sum of its estimated operation and maintenance expenses, debt service, taxes, and allowed rate of return. Revenue requirement is often defined as:

Process which allows any long-term firm gas transportation customer, including formerly bundled city-gate sales customers, to continue receiving firm gas transportation service by paying up to the maximum rate and matching the length of a term offered by another customer who is seeking service.

A strip of land, the use of which is acquired for the construction and operation of a pipeline or some other facility; may be owned outright or an easement taken for a specific purpose.

Real-time Information Network. Method proposed by the FERC to have information available via an Electronic Bulletin Board about transmission availability, scheduling, economic dispatch, service interruptions and system reliability. (See Oasis)

Risk management is the reducing of the prospect of losses which will interfere with the execution of a company's business strategy. It allows managers to focus directly on shareholder value as an objective in decision making.

A pricing method which establishes rates on a weighted average of all costs, as opposed to allocating specific costs to specific customers.

In natural gas contracts, a contract clause that permits a contract to extend beyond the initial term. In futures contracts, astraddle trading procedure involving the shift of one month of a straddle into a future month, while maintaining the other contract month of the original spread.

During an emergency, a system operator sequentially rotates portions of its system that will be without power so that the total system load remains under its maximum load level and no one customer is without power for the entire emergency.

The completion of a purchase and a sale of a futures contract.

With respect to oil and gas properties, a share of production, which mayor may not bear a share of expenses of production, depending upon the terms of the specific lease.

A person who owns a royalty interest in production.

Regional Transmission Group.

Rules set in advance to delineate acceptable activities by participants, particularly participants with significant market power.

A hydroelectric plant which depends chiefly on the flow of a stream as it occurs for generation, as opposed to a storage project, which has space available to store water from one season to another. Some run-of-river projects have a limited storage capacity (pondage) which permits them to regulate streamflow on a daily or weekly basis.

In general, quick-start capability refers to generating units that can be available for load within a 3-minute period.