The terms defined below are intended to provide background on a selected group of terms and concepts useful in the L.R. 455 Study.

The contracted right to use an electrical system to transfer electrical energy. Under a competitive market system, state and federal regulators are expected to require this access at fixed, regulated prices.

Access Charge:
A charge levied on a power supplier, or a consumer, for access to a utility's transmission or distribution system. This charge may include a "stranded cost' or other charges as well as transmission or distribution service charges. (See Wires Charge).

Any entity that seeks to aggregate consumers for delivery of service under specified contract terms.

Ancillary Services:
Interconnected operations services for operating reserve, voltage control, regulation and frequency response, scheduling and system control and dispatch, and other power supply necessary to effect a reliable transfer of electrical energy at specified contract terms between a buyer and a seller.

A measure of time that a generating unit or transmission line, or other facility is capable of providing service, whether or not it is actually in service. Typically this measure is expressed as a percent available for the period under consideration.

Backup Power:
Power provided by contract to a customer when that customer's normal source of power is not available.

The minimum amount of power delivered or demanded over a given period at a constant rate. On a energy demand chart this will be the constant bottom line demand for a given customer or group of customers. (This is differentiated from Intermediate and Peak demand).

Bilateral Contract:
A direct contract between a power producer or end-user outside of a centralized power pool or POOLCO.

The rated continuous load-carrying ability, expressed in megawatts (MW) or megavolt-amperes (MVA) of generation, transmission, or other electrical equipment. For generating plants, capacity is typically differentiated into "Baseload Capacity" (a capacity factor above 60 percent); "Intermediate Capacity" (a capacity factor of 20 to 60 percent); and "Peaking Capacity" (a capacity factor of less than 20 percent).

Capacity Factor:
The ratio of total energy generated by a plant for a specified period of time to the maximum possible energy it could have generated if operated at the maximum capacity rating for the same period, expressed as a percent.

Production of electricity from steam, heat, or other forms of energy produced as a by-product of another process-usually manufacturing.

Contract Path:
A specific contiguous electrical path from a point of receipt to a point of delivery for which transmission rights have been contracted. (The "contract path" is a convenient fiction because electricity does not necessarily flow from point A to point B.)

Control Area:
An electric system or systems, bounded by interconnection metering and telemetry, capable of controlling generation to maintain its interchange schedule with other Control Areas and contributing to frequency regulation of the Interconnection.

The right of a transmission provider to interrupt all or part of a transmission service due to constraints that reduce the capability of the transmission network to provide that transmission service. Transmission service is to be curtailed only in cases where system reliability is threatened or emergency conditions exist.

The rate at which electric energy is delivered to or by a system, generally expressed in kilowatts or megawatts, at a given instant or averaged over any designated interval of time. Demand should not be confused with Load.

Peak Demand:
The highest electric requirement occurring in a given period (e.g., an hour, a day, month, season, or year). For an electric system, it is equal to the sum of the metered net outputs of all generators within a system and the metered line flows into the system, less the metered line flows out of the system.

Coincident Demand:
The sum of two or more demands that occur in the same demand interval.

Noncoincident Demand:
The sum of two or more demands that occur in different demand intervals.

Contract Demand:
The amount of capacity that a supplier agrees to make available for delivery to a particular entity and which the entity agrees to purchase.

Firm Demand:
That portion of the Contract Demand that a power supplier is obligated to provide except when system reliability is threatened or during emergency conditions.

Demand-Side Management:
This is a term that is intended to cover all activities undertaken by an electric supplier or consumers to influence the amount and timing of electricity use. This may occur through technological improvements, or revision in practices, billing rates, or direct control measures by the supplier (e.g. "smart metering" or non-firm or interruptible load agreements).

Distribution Provider (DISCO):
Any owner of a distribution system and associated substations and other facilities providing use of the distribution system to suppliers and end-users. The distribution provider in a competitive market will also be the likely supplier of metering, billing and other administrative services related to direct consumer contact.

Distribution System:
Distribution lines, poles, meters and associated facilities that deliver energy directly to the end-use customer.

Economic Dispatch:
The allocation of demand to individual generating units on line to effect the most economical production of electricity.

Electrical Energy:
The generation or use of electric power over a period of time expressed in kilowatthours (kWh), megawatthouse (MWh), or gigawatthours (GWh). There are several types of electrical energy:

Firm Energy:
Electrical energy supported by sufficient capacity, interruptible only on conditions agreed upon by contract. To guarantee firm energy, the seller will provide all ancillary services.

Nonfirm Energy:
Electrical energy that may be interrupted either by the provider or the receiver by giving notice to the other party as specified in a contract.

Peak Energy:
Electrical energy supplied during a period of high system demand as specified in a contract.

Off-Peak Energy:
Electrical energy supplied during a period of relatively low system demand as specified in a contract.

Electric System Losses:
Total electric energy losses in the electric system consisting of transmission, transformation, and distribution system losses between supply and delivery points.

Energy Efficiency:
Measures undertaken as part of Demand-Side Management to reduce the consumption of electricity for a specific task or function.

Energy Services Company (ESCO):
An entity offering consumers a range of energy efficiency measures designed to reduce consumption and costs.

Predicted demand for electric power for a given customer or group of customers for a given period. A forecast may be short-term (e.g., 15 minutes) for system operation purposes, or five to ten years for a contract period, or twenty years for generating planning purposes. The forecast will typically include identification of baseload, intermediate, and peak demand based upon historical sales and projected growth data.

The franchise is a grant of right or privilege to occupy or use public streets and ways and facilities located on public streets and ways to deliver service to consumers. Franchises are historically, and typically, granted by local governments.

Generation (Electricity):
The process of producing electrical energy from other forms of energy; also the amount of electric energy produced, usually expressed in kilowatthours (kWh) or megawatthours (MWh). Gross generation is the electrical output at the terminals of the generator, usually expressed in megawatts (MW). Net generation is gross generation minus the service power requirements of the generating station itself

A condition in which the generation and demand or interchange schedules do not match.

Independent Power Producer:
An independent power producer (IPP) refers to any entity that owns or operates and electric generating facility that is not included in a utility's rate base. This term included utility subsidiaries as well as entrepreneurs and non-utility producers.

Independent System Operator (ISO):
An independent system operator is envisioned by federal regulators and others to be an independent third party who will take over ownership and/or control of a region' 5 transmission system for the purpose of providing open access to retail and wholesale markets for supply. (This is to be distinguished from a Regional Transmission Group or RTG which is a group of transmission line owners who propose to cooperatively operate the regional transmission grid.)

Integrated Resource Planning:
A planning process for new energy resources that evaluates the nil range of alternatives, including new generating capacity, power purchases, energy conservation and efficiency measures, cogeneration and district heating and cooling applications, and renewable energy resources, in order to provide adequate and reliable service to customers at the lowest system cost.

An end-use device or customer that receives power from an electrical system. Load should not be confused with Demand, which is a measure of the power that a load receives or requires.

Load Duration Curve:
A nonchronological, graph summary of demand levels with corresponding time durations using a curve, which plots demand magnitude (power) on one axis and percent of time that the magnitude occurs on the other axis.

Load Following:
An electric system's process of regulating its generation to follow the changes in its customers' demand. This capability is especially important for firm power and delivery of all-requirements service.

Load Factor:
A measure of the degree of uniformity of demand over a period of time, usually one year, equivalent to the ratio of the average demand expressed as a percentage. It is calculated by dividing the total energy provided by a system during the period by the product of the peak demand during the period and the number of hours in the period. This is expressed as a percentage (e.g., residential load factors are typically 45-55 percent).

The process and methods of utilizing devices to measure the amount and direction of electrical energy flow; particularly for end-use.

Open Access Same Time Information Sharing (OASIS):
An electronic information posting system for transmission access data that allows all transmission customers to view the data simultaneously. Development of the OASIS system has been mandated by federal regulators as on one the necessary components of a open transmission system.

There are two primary types of outages:

Forced Outage:
The removal from service availability of a generating unit, transmission line, or other facility for emergency reasons or a condition in which the equipment is unavailable due to unanticipated failure.

Planned Outage:
Removing equipment from service availability for inspection and/or general overhaul of major equipment. A planned outage does not usually result in power supply failure, although planned outages during critical peak demand periods may place stress upon a system and lead to load shedding or forced outages.

Point of Delivery:
A point on the electrical systems, usually a substation, where a power supplier delivers electricity to the distribution system. This point can also include an interconnection with another system. The Point of Delivery is specified in a supply contract.

Power Pool:
Generating plants in any given region are interconnected through a transmission grid. The operation of this grid and its coordination and cooperation between generating plant owners takes place on a formal "tight pool" basis with coordinated dispatch (e.g., the New England Power Pool), or as a "loose pool" with less formal integration and coordination.

POOLCO or Power Exchange:
An entity envisioned by federal regulators and other that would provide a centrally dispatched spot market power pool. It would make ancillary generation services available to all market participants on comparable terms. The POOLCO or Power Exchange is sometimes seen as the alternative to "Bilateral Contracts".

Power Broker:
A power broker is an entity that arranges a transaction between a buyer and a seller. The broker does not take title to the power.

Power Marketer:
A power marketer is an entity that buys and sells power. The marketer does take title to the power. A marketer may or may not own generation facilities.

Power Supplier:
A power supplier is a term that can include both Power Brokers and Power Marketers.

Regional Transmission Group (RTG):
A voluntary organization of transmission owners and users interested in coordinating transmission planning and expansion on a regional basis.

The degree to which an electrical system can deliver power supplies to customers at contract specifications, or acceptable regulatory standards. Reliability may be measured by the frequency, duration, and magnitude of adverse effects on the electric supply. It is usually considered for two primary elements:
adequacy of supply and security of supply.

Renewable Energy:
Renewable energy generally refers to energy derived from non-fossil fuel resources (excluding nuclear). It often includes wind, photovoltaics, biomass and hydro. However, the definition may vary in different states or regions of the county and in situations in which new energy technology development is being promoted (e.g., hydro may be excluded).

There are several types of reserve capability and capacity that are usually included in consideration of supply of firm power needs. These include:
operating reserve, spinning reserve, regulating reserve, contingency reserve, nonspinning reserve, and planning reserve.

Stranded Benefits:
Public interest programs and goals which could be compromised or abandoned by a competitive retail market for electric services.

Stranded Costs:
Above-market costs of utilities and other power producers that would be "stranded" by consumers choosing a different supplier.

Stranded Obligations:
The revenues, taxes, and fees for federal, state, and local governments that would be lost by changes in contracts, valuations and revenue policies

System Operator:
An individual at an electric system control center whose responsibility it is to monitor and control that electric system in real time.

Transmission Provider:
Any transmission line owner who provides use of the facilities for the transfer of electrical energy.

Transmission System:
An interconnected group of lines and associated equipment for the movement or transfer of electric energy between points of supply and points at which it is transformed for delivery to customers, or is delivered to other electric systems. Transmission is commonly on the generator side of the substation (distribution is on the customer side.)

Voltage Control:
The control of transmission voltage through adjustments in generator reactive output and transformer taps, and by switching capacitors and inductors on the transmission and distribution systems.

Restructuring of utilities into component operations:
generation, transmission and distribution. Also "unbundling" of consumer bills into price components reflecting charges for each segment of operation.

The contracted use of electrical facilities of one or more entities to transmit electricity for another entity. When conducted on behalf of retail customers it is sometimes referred to a "retail wheeling."

Wires Charge:
A term that refers to all charges added to distribution and transmission charges. (See Access Charge).