Distributed Energy Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Above-market Cost -   The cost of a service in excess of the price of comparable services in the market.

Access Charge -   A charge for a power supplier, or its customer, for access to a utility's transmission or distribution system. It is a charge for the right to send electricity over another's wires.

Actual Peak Load Reductions -  The actual reduction in annual peak load (measured in kilowatts) achieved by consumers that participate in a utility DSM program.  It reflects the real changes in the demand for electricity resulting from a utility DSM program that is in effect at the same time the utility experiences its annual peak load, as opposed to the installed peak load reduction capability (i.e., Potential Peak Load Reduction).  It should account for the regular cycling of energy efficient units during the period of annual peak load.

Affiliate -   A company that is controlled by another or that has the same owner as another company.

Affiliated Power Producer -   A generating company that is affiliated with a utility.

After-Market -   Broad term that applies to any change after the original purchase, such as adding equipment not a part of the original purchase. As applied to alternative fueled vehicles, it refers to conversion devices or kits for conventional fuel vehicles.

Aggregation -   The process of organizing small groups, businesses or residential customer into a larger, more effective bargaining unit that strengthens their purchasing power with utilities.

Aggregator -   An entity that puts together customers into a guying group for the purchase of a commodity service. The vertically integrated investor owned utility, municipal utilities and rural electric cooperatives perform this function in today's power market. Other entities such as buyer cooperatives or brokers could perform this function in a restructured power market.

Alternating Current (AC) -   Flow of electricity that constantly changes director between positive and negative sides. Almost all power produced by electric utilities in the United States moves in current that shifts direction at a rate of 60 times per second.

Ampere -   Unit that measures electrical current in a circuit by 1 volt acting through a resistance of 1 ohm.

Ancillary Services -  Ancillary services are those services necessary to support the transmission of energy from resources to loads while maintaining reliable operation of the Transmission Provider’s transmission system in accordance with Good Utility Practice.

Annual Fuel Utilization Efficiency (AFUE) -   A measure of heating efficiency, in consistent units, determined by applying the federal test method for furnaces. This value is intended to represent the ratio of heat transferred to the conditioned space by the fuel energy supplies over one year. The higher the AFUE, the more efficient the boiler.

Annual Maximum Demand -   The greatest of all demands of the electrical load which occurred during a prescribed interval in a calendar year.

Annuity -   A series of equal cash flows over a number of years.

Applicability Factor -   The percentage of end-use energy and demand used by a technology to which the demand-side management (DSM) measure applies. For example, the high-efficiency fluorescent lighting DSM measure applies to fluorescent lighting but not all lighting. Applicability therefore represents the percent of the lighting end-use attributable to fluorescence for which there could be high-efficiency replacements installed.

Area Load -   The total amount of electricity being used at a given point in time by all consumers in a utility's service territory.

Asset -  An economic resource, tangible or intangible, which is expected to provide benefits to a business.

Attributes -   Attributes are the outcomes by which the relative "goodness" of a particular expansion plan is measured e.g. fuel usage. Some attributes, such as fuel usage, are measured in well-defined parameters. Other attributes (e.g. public perception of a technology) are more subjective. Attributes may be grouped in several ways. Categories include financial, economic, performance, fuel usage, environmental, and socio-economic. The attributes chosen must measure issues that directly concern the utility and have an impact on its planning objectives. Limiting the number of attributes reduces the complexity and cost of a study.

Available but not Needed Capability -  Net capability of main generating units that are operable but not considered necessary to carry load, and cannot be connected to load within 30 minutes.

Average Cost -   The revenue requirement of a utility divided by the utility's sales. Average cost typically includes the costs of existing power plants, transmission, and distribution lines, and other facilities used by a utility to serve its customers. It also includes operations and maintenance, tax, and fuel expenses.

Average Demand -   The energy demand in a given geographical area over a period of time. For example, the number of kilowatt-hours used in a 24-hour period, divided by 24, tells the average demand for that period.

Average Revenue per Kilowatt-hour -  The average revenue per kilowatt-hour of electricity sold by sector (residential, commercial, industrial, or other) and geographic area (State, Census division, and National), is calculated by dividing the total monthly revenue by the corresponding total monthly sales for each sector and geographic area.

Avoided Costs -   These are costs that a utility avoids by purchasing power from an independent producer rather than generating power themselves, purchasing power from another source or constructing new power plants. A Public Utility Commission calculates avoided costs for each utility, and these costs are the basis upon which independent power producers are paid for the electricity they produce. There are two parts to an avoided cost calculation - the avoided capacity cost of constructing new power plants and the avoided energy cost of fuel and operating and maintaining utility power plants.

 Barrel -  A volumetric unit of measure for crude oil and petroleum products equivalent to 42 U.S. gallons.

Base Bill -  A charge calculated through multiplication of the rate from the appropriate electric rate schedule by the level of consumption.

Base load -  The minimum amount of electric power delivered or required over a given period of time at a steady rate.

Base load Capacity -  The generating equipment normally operated to serve loads on an around-the-clock basis.

Base load Plant -  A plant, usually housing high efficiency steam-electric units, which is normally operated to take all or part of the minimum load of a system, and which consequently produces electricity at an essentially constant rate and runs continuously.  These units are operated to maximize system mechanical and thermal efficiency and minimize system operating costs.

Base Load Unit -   A generating unit that normally operates at a constant output to take all or part of the base load of a system.

Base Rate -   The portion of the total electric or gas rate covering the general costs of doing business unrelated to fuel expenses.

Base Year -   The first year of the period of analysis. The base year does not have to be the current year.

Baseline Forecast -   A prediction of future energy needs which does not take into account the likely effects of new conservation programs that have not yet been started.

Baseload Capacity -   Generating equipment operated to serve loads 24-hours per day.

Basic Gas Supply Service (BGSS) - The “default” gas commodity service to be provided to consumers who do not elect to buy gas from a third party supplier.

Basic Service -   The four charges for generation, transmission, distribution and transition that all customers must pay in order to retail their electric service.

Bbl -  The abbreviation for barrel.

Bcf -  The abbreviation for 1 billion cubic feet.

Bilateral Contract -   A direct contract between the power producer and user or broker outside of a centralized power pool.

Biomass -   Plant materials and animal waste used as a source of fuel.

Blackout -   A power loss affecting many electricity consumers over a large geographical area for a significant period of time.

Boiler - A device for generating steam for power, processing, or heating purposes or for producing hot water for heating purposes or hot water supply.  Heat from an external combustion source is transmitted to a fluid contained within the tubes in the boiler shell.  This fluid is delivered to an end-use at a desired pressure, temperature, and quality.

Board of Public Utilities - Regulatory body that regulates utilities in the State of New Jersey.

British Thermal Unit (BTU) -   The standard unit for measuring quantity of heat energy. It is the amount of heat energy necessary to raise the temperature of one pound of water one degree Fahrenheit.

Broker -   A retail agent who buys and sells power. The agent may also aggregate customers and arrange for transmission, firming and other ancillary services as needed.

Broker (Gas) - A duly licensed gas supplier that assumes the contractual legal obligation to provide gas supply service to end-use retail customers, but does not take title to the gas.

Brownout -   A controlled power reduction in which the utility decreases the voltage on the power lines, so customers receive weaker electric current. Brownouts can be used if total power demand exceeds the maximum available supply. The typical household does not notice the difference.

Bulk Power Market -   Wholesale purchases and sales of electricity.

Bulk Power Supply -   Often this term is used interchangeably with wholesale power supply. In broader terms, it refers to the aggregate of electric generating plants, transmission lines, and related equipment. The term may refer to those facilities within one electric utility, or within a group of utilities in which the transmission lines are interconnected.

Burner Tip - The point at which natural gas is available in the customer’s home or business.

 Capability -  The maximum load that a generating unit, generating station, or other electrical apparatus can carry under specified conditions for a given period of time without exceeding approved limits of temperature and stress.

Capacitor -   This is a device that helps improve the efficiency of the flow of electricity through distribution lines by reducing energy losses. It is installed in substations and on poles. Usually it is installed to correct an unwanted condition in an electrical system

Capacity -  The amount of electric power delivered or required for which a generator, turbine, transformer, transmission circuit, station, or system is rated by the manufacturer.

Capacity (Purchased) -  The amount of energy and capacity available for purchase from outside the system.

Capacity Charge -  An element in a two-part pricing method used in capacity transactions (energy charge is the other element).  The capacity charge, sometimes called Demand Charge, is assessed on the amount of capacity being purchased.

Capacity Factor -   The ratio of the average load on a machine or equipment for a period of time to the capacity rating of the machine or equipment.

Capital (Financial) - The line items on the right side of a balance sheet that include debt, preferred stock, and common equity.  A net increase in assets must be financed by an increase in one or more forms of capital. 

Capital Recovery Factor (CRF) -   A  factor used to convert a lump sum value to an annual equivalent.

Captive Customer -   A  customer who does not have realistic alternatives to buying power from the local utility, even if that customer had the legal right to buy from competitors.

Census Divisions -  The nine geographic divisions of the United States established by the Bureau of the Census, U.S. Department of Commerce, for the purpose of statistical analysis.  The boundaries of Census divisions coincide with state boundaries.  The Pacific Division is subdivided into the Pacific Contiguous and Pacific Noncontiguous areas.

Circuit -   Conductor for electric current.

City Gate - The point at which the Local Gas Distribution Company takes delivery of natural gas from an interstate pipeline.

Coal -  A black or brownish-black solid combustible substance formed by the partial decomposition of vegetable matter without access to air.  The rank of coal, which includes anthracite, bituminous coal, subbituminous coal, and lignite, is based on fixed carbon, volatile matter, and heating value.  Coal rank indicates the progressive alteration from lignite to anthracite.  Lignite contains approximately 9 to 17 million Btu per ton.  The contents of subbituminous and bituminous coal range from 16 to 24 million Btu per ton and from 19 to 30 million Btu per ton, respectively.  Anthracite contains approximately 22 to 28 million Btu per ton.

Cogeneration -   Production of heat energy and electrical or mechanical power from the same fuel in the same facility. A typical cogeneration facility produces electricity and steam for industrial process use.

Cogenerator -  A generating facility that produces electricity and another form of useful thermal energy (such as heat or steam) used for industrial, commercial, heating, or cooling purposes.  To receive status as a qualifying facility (QF) under the Public Utility Regulatory Policies Act (PURPA), the facility must produce electric energy and “another form of useful thermal energy through the sequential use of energy,” and meet certain ownership, operating, and efficiency criteria established by the Federal Energy Regulatory Commission (FERC).  (See the code of Federal Regulations, Title 18, Part 292.)

Coincidence Factor -   The ratio of the coincident maximum demand of two or more loads to the sum of their noncoincident maximum demands for a given period. The coincidence factor is the reciprocal of the diversity factor and is always less than or equal to one.

Coincidental Demand -  The sum of two or more demands that occur in the same time interval.

Coincidental Peak Load -  The sum of two or more peak loads that occur in the same time interval.

Combined Cycle -  An electric generating technology in which electricity is produced from otherwise lost waste heat exiting from one more gas (combustion) turbines.  The exiting heat is routed to a conventional boiler or to a heat recovery steam generator for utilization by a steam turbine in the production of electricity.  This process increases the efficiency of the electric generating unit.

Combined Cycle Plant -   An electric generating station that uses waste heat from its gas turbines to produce steam for conventional steam turbines.

Combined Cycle Unit -  An electric generating unit that consists of one or more combustion turbines and one or more boilers with a portion of the required energy input to the boiler(s) provided by the exhaust gas of the combustion turbine(s).

Combined Pumped-Storage Plant -  A pumped-storage hydroelectric power plant that uses both pumped water and natural streamflow to produce electricity.

Combustion Turbine -   A fossil-fuel-fired power plant that uses the conversion process known as the Brayton cycle. The fuel, oil, or gas is combusted and drives a turbine-generator.

Commercial -  The commercial sector is generally defined as nonmanufacturing business establishments, including hotels, motels, restaurants, wholesale businesses, retail stores, and health, social, and educational institutions.  The utility may classify commercial service as all consumers whose demand or annual use exceeds some specified limit.  The limit may be set by the utility based on the rate schedule of the utility.

Commercial Operation -  Commercial operation begins when control of the loading of the generator is turned over to the system dispatcher.

Competitive Bidding -   This is a procedure that utilities use to select suppliers of new electric capacity and energy. Under competitive bidding, an electric utility solicits bids from prospective power generators to meet current or future power demands. When offers from independent power producers began exceeding utility needs in the mid-1908's, utilities and state regulators began using competitive bidding systems to select more fairly among numerous supply alternatives.

Competitive Franchise -   A process whereby a municipality (or group of municipalities) issues a franchise to supply electricity in the community to the winner of a competitive bid process. Such franchises can be for bundled electricity and transmission/distribution, or there can be separate franchises for the supply of electricity services and the transmission and distribution function. Franchises can be, but typically are not, exclusive licenses.

Competitive Transition Charge (CTC) -   A "nonbypassable" charge generally placed on distribution services to recover utility costs incurred as a result of restructuring (stranded costs - usually associated with generation facilities and services) and not recoverable in other ways.

Comprehensive National Energy Policy Act -   Federal legislation in 1992 that opened the U.S. electric utility industry to increase competition at the wholesale level and left authority for retail competition to the states.

Conductor -   An object or substance which conducts or leads electric current. A wire, cable, busbar, rod, or tube can serve as a path for electricity to flow. The most common conductor is an electrical wire.

Connection -  The physical connection (e.g. transmission lines, transformers, switch gear, etc.) between two electric systems permitting the transfer of electric energy in one or both directions.

Conservation and Other DSM -  A foregoing or reduction of electric usage for the purpose of saving natural energy resources and limiting peak demand in order to ultimately reduce the capacity requirements for plant and equipment. This Demand-Side Management category represents the amount of consumer peak load reduction at the time of system peak due to utility programs that reduce consumer 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.  In addition, this category includes all other Demand-Side Management activities, such as thermal storage, time-of-use rates, fuel substitutions, measurement and evaluation, and any other utility-administered Demand-Side Management activity designed to reduce demand and/or electricity use.

Contract Path -   The most direct physical transmission tie between two interconnected entities. When utility systems interchange power, the transfer is presumed to take place across the "contract path" , notwithstanding the electric fact that power flow in the network will distribute in accordance with network flow conditions. This term can also mean to arrange for power transfer between systems.

Contract Price -  Price of fuels marketed on a contract basis covering a period of 1 or more years.  Contract prices reflect market conditions at the time the contract was negotiated and therefore remain constant throughout the life of the contract or are adjusted through escalation clauses.  Generally, contract prices do not fluctuate widely.

Control Area -  An electric power system or combination of electric power systems to which a common automatic control scheme is applied in order to - (1) match, at all times, the power output of the generators within the electric power system(s) and capacity and energy purchased from entities outside the electric power system(s), with the load in the electric power system(s); (2) maintain, within the limits of Good Utility Practice, scheduled interchange with other Control Areas; (3) maintain the frequency of the electric power system(s) within reasonable limits in accordance with Good Utility Practice; and (4) provide sufficient generating capacity to maintain operating reserves in accordance with Good Utility Practice.

Converter -   Any technology that changes the potential energy in fuel into a different form of energy such as heat or motion. The term also is used to mean an apparatus that changes the quantity or quality of electric energy.

Cooling System -  Energy Efficiency program promotion aimed at improving the efficiency of the cooling delivery system, including replacement, in the residential, commercial, or industrial sectors.

Cooperative Electric Utility -  An electric utility legally established to be owned by and operated for the benefit of those using its service.  The utility company will generate, transmit, and/or distribute supplies of electric energy to a specified area not being serviced by another utility.  Such ventures are generally exempt from Federal income tax laws.  Most electric cooperatives have been initially financed by the Rural Electrification Administration, U.S. Department of Agriculture.

Current (Electric) -  A flow of electrons in an electrical conductor.  The strength or rate of movement of the electricity is measured in amperes.

Current Transformers -   These are used in conjunction with metering equipment. They are designed to permit measurement of currents beyond the range of a meter.

Customer Assistance Programs -   Alternative collection program set up between a utility company and a customer that allows customers to pay utility bills on a percentage-of-the-bill they owe or percentage-of-customer-income instead of paying the full amount owed. These programs are for low-income people who can't pay their bills. These customers must agree to make regular monthly payments based on their new payment plans.

Customer Service Charge -   That portion of the customer's bill which remains the same from month to month. The charge is determined separately from the amount of energy used. It is based on the costs associated with connecting a customer to the company's distribution system, including the service connection and metering equipment. This charge also recovers expenses such as meter reading, billing costs, customer accounting expenses records and collections, and a portion of general plant items such as office space for customer service personnel.

 Daily Peak -   The maximum amount of energy or service demanded in one day from a company or utility service.

Degree-day -   A unit measuring the extent to which the outdoor mean (average of maximum and minimum) daily dry-bulb temperature falls below (in the case of heating) or rises above (in the case of cooling) an assumed base. The base is normally taken as 65 degrees for heating and cooling unless otherwise designated.

Dekatherm ("Dth") - Refers to a unit of heating value equal to ten therms. A typical residential heating customer in New Jersey uses about 100 dekatherms of natural gas per year.

Demand (electric) -   The rate at which electric energy is delivered to or by a system, part of a system, or a piece of equipment. Demand is expressed in kW, kVA, or other suitable units at a given instant or over any designated period of time. The primary source of "demand" is the power-consuming equipment of the customers.

Demand Billing -   The electric capacity requirement for which a large user pays. It may be based on the customer's peak demand during the contract year, on a previous maximum or on an agreed minimum. It is measured in kilowatts.

Demand Charge -   The sum to be paid by a large electricity consumer for its peak usage level.

Demand Controller -   An electrical, mechanical, or electromechanical device or system that monitors the customer demand and causes that demand to be leveled and/or limited.

Demand Ratchet -   This is the minimum billing demand based upon a given percentage of the actual demand use, recorded during the last eleven months of demand history.

Demand-Side Management -  The planning, implementation, and monitoring of utility activities designed to encourage consumers to modify patterns of electricity usage, including the timing and level of electricity demand.  It refers only to energy and load-shape modifying activities that are undertaken in response to utility-administered programs.  It does not refer to energy and load-shape changes arising from the normal operation of the marketplace or from government-mandated energy efficiency standards.  Demand-Side Management (DSM) covers the complete range of load-shape objectives, including strategic conservation and load management, as well as strategic load growth

Demand-Side Management Costs -  The costs incurred by the utility to achieve the capacity and energy savings from the Demand-Side Management Program.  Costs (expenditures) incurred by consumers or third parties are to be excluded.  The costs are to be reported in nominal dollars in the year in which they are incurred, regardless of when the savings occur.  Program costs include expensed items incurred to implement the program, incentive payments provided to consumers to install Demand-Side Management measures, and annual operation and maintenance expenses incurred during the year.  Utility costs that are general, administrative, or not specific to a particular Demand-Side Management category are to be included in “other” costs.

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

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

Direct Current (DC) -   Electric that flows continuously in the same direction.

Direct Energy Conversion -   Production of electricity from an energy source without transferring the energy to a working fluid or steam. For example, photovoltaic cells transform light directly into electricity. Direct conversion systems have no moving parts and usually produce direct current.

Direct Load Control -  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 consumers.  Direct Load Control excludes Interruptible Load and Other Load Management effects.  (Direct Load Control, as defined here, is synonymous with Direct Load Control Management reported to the North American Electric Reliability Council on the voluntary Office of Energy Emergency Operations Form OE-411, “Coordinated Regional Bulk Power Supply Program Report,” with the exception that annual peak load effects are reported here and seasonal (i.e., summer and winter) peak load effects are reported on the OE-411).

Direct Utility Cost -  A utility cost that is identified with one of the DSM program categories (i.e., Energy Efficiency, Direct Load Control, Interruptible Load, Other Load Management, Other DSM Programs, Load Building).

Disaggregation -   The functional separation of the vertically integrated utility into smaller, individually owned business units (I.e. generation, dispatch/control, transmission, distribution). The terms "deintegration", "disintegration" and "delimitation" are sometimes used to mean the same thing.

Dispatchability -   This is the ability of a generating unit to increase or decrease generation, or to be brought on line or shut down at the request or a utility's system operator.

Distillate Fuel Oil -  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.

Distributed Energy -   A distributed generation system involves small amounts of generation located on a utility's distribution system for the purpose of meeting local (substation level) peak loads and/or displacing the need to build additional (or upgrade) local distribution lines.

Distributed Generation -   Same as distributed energy, a distributed generation system involves small amounts of generation located on a utility's distribution system for the purpose of meeting local (substation level) peak loads and/or displacing the need to build additional (or upgrade) local distribution lines.

Distribution -   The system of wires, switches, and transformers that serve neighborhoods and business, typically lower than 69,000 volts. A distribution system reduces or downgrades power from high-voltage transmission lines to a level that can be used in homes or businesses.

Distribution Line -   This is a line or system for distributing power from a transmission system to a customer. It is any line operating at less than 69,000 volts.

Distribution Service - The gas delivery service provided by the Local Gas Distribution Company (GDC). This service encompasses the delivery of the natural gas from the city gate to the burner tip, using the GDC’s network of pipes within New Jersey. Historically, New Jersey’s GDCs have referred to this service as “transportation” service.

Distribution System -  The portion of an electric system that is dedicated to delivering electric energy to an end user.

Distribution Utility (Disco) -   The regulated electric utility entity that constructs and maintains the distribution wires connecting the transmission grid to the final customer. The Disco can also perform other services such as aggregating customers, purchasing power supply and transmission services for customers, billing customers and reimbursing suppliers, and offering other regulated or non-regulated energy services to retail customers. The "wires" and "customer service" functions provided by a distribution utility could be split so that two totally separate entities are used to supply these two types of distribution services.

Distributive Power -   A packaged power unit located at the point of demand. While the technology is still evolving, examples include fuel cells and photovoltaic applications.

Division of the Ratepayer Advocate - Independent agency created in 1994 which represents and protects the interests of all utility customers, including residential, business, commercial and industrial, whenever utility companies in New Jersey seek changes in the delivery of services and in how much they charge for natural gas, electric, water, wastewater, telephone or cable TV service.

DSM Measure Technology Program -   Single devices, equipment, or rates as listed in the Reference Data. A demand-side management program is usually a group of DSM measures or technologies. However, a DSM program could in some cases be a single measure.

 Economic Dispatch -   The distribution of total generation requirements among alternative sources for optimum system economy with consideration to both incremental generating costs and incremental transmission losses.

Economic Efficiency -   A term that refers to the optimal production and consumption of goods and services. This generally occurs when prices of products and services reflect their marginal costs. Economic efficiency gains can be achieved through cost reduction, but it is better to think of the concept as actions that promote an increase in overall net value (which includes, but is not limited to, cost reductions).

Economy Energy -   Energy produced and substituted for the traditional but less economical source of energy. Economic energy is usually sold without capacity and is priced at variable costs plus administration costs.

Electric Plant (Physical) -  A facility containing prime movers, electric generators, and auxiliary equipment for converting mechanical, chemical, and/or fission energy into electric energy.

Electric Power Supplier -   Non-utility provider of electricity to a competitive marketplace.