Energy Procurement Services Glossary of Terms

ELECTRIC BILL TERMS

Generation: Production of electricity from a power plant.
Transmission: Electric lines that transport generated electricity in bulk from the generation plant to substations.
Generation service: The costs of the “raw” electricity/commodity that is being supplied. This is the part of the bill that is deregulated, and can be sourced through a third party supplier.
Distribution: The local part of an electricity system that delivers power from the substation to the retail customers.
Distribution service: Involves the equipment and services used to transport the electricity to the customer’s meter.
Customer Charge: Determined by the Tariff Number.
Riders: Additional charges that have been approved by PUC to add to the bill.
Tariff Number: A number used to designate different types& sizes of usage (example: Tariff 207= Business Medium General Service).

**Distribution , Customer Charge, and Riders are the part of the bill that is regulated, and are under the host utility control.

GENERAL TERMS

Aggregation or “Pool”: A grouping of electric consumers (generally small business customers) into a larger purchasing unit in order to gain more bargaining power with the electricity-generation supplier.
Broker: Someone licensed by the PUC that acts as a middleman in the purchase and sale of electricity.
Demand: Maximum amount of electrical power used over a 15- , 30- , or 60- minute interval in the billing period. Expressed in units of kilowatt (kW).
Demand Charge: Amount charged for the highest average power demand recorded during any one time period (ranging from 15 minutes to one hour) within the billing period.
Deregulation: Removal or relaxation of regulations or controls governing a business or service operation. In the case of the electric industry, deregulation means consumers will have their choice of electricity generation suppliers.
Discrete Contract: An enrollment for individual large companies, and where a selection is made from multiple suppliers with price bids.
Early Termination Fee: A fee that is applied if a customer terminates their contract prior to the expiration date of the agreement.
Electricity Generator of Last Resort: A consumer's local electric utility that will provide power to the consumer if his or her selected generation supplier is unable to deliver.
Generation Capacity: The maximum amount of electrical power that a power plant is able to produce, usually expressed in megawatts (MW).
Host Utility: The main electric utility that supplies electricity for a large territory encompassing several cities. The “default” electric company when no third party supply is involved (example: AEP, or Ohio Power).
Investor-owned Utility (IOU): A utility company owned and operated by private investors.
Kilowatt-hour (kWh): Unit of measure of electricity use over a period of time. For example, ten 100-watt light bulbs operated for one hour consumes one kilowatt hour (kWh) of electricity.
Letter of Authorization (LOA): A form that allows an authorized electric broker to gather a customer's historical usage information and patterns from the Utility. This form is only required for large individual electric users, and does not obligate the customer to accept any subsequent proposals from the broker.
Load: The amount of electrical power being used at one time by a customer, circuit, or system. Expressed in units of kilowatts (kW).
Load Profile: Graphic representation of electricity used over a period of time.
Minimum Stay Provision: A requirement that the host utility may employ if their customer leaves to go with another supplier, then comes back to the host utility. The host utility can require the customer to stay for a certain amount of time with the host utility before engaging in another third-party supply contract. Minimum stay provisions are often twelve months.
Off-Peak Period: Period of time when the electricity supplied by a utility system is at a low level compared to other time periods. Corresponds to when demand by customers is low.
On-Peak Period: Period of time when the electricity supplied by a utility system is at a high level compared to other time periods. Corresponds to when demand by customers is high.
Pool Contract: An enrollment available for multiple small to medium size companies, with set rates for all.
Public Utility Commission (PUC): The state regulatory agency that provides oversight, policy guidance, and direction to electric public utilities as well as other utilities. For example, in Ohio this agency is named PUCO (Public Utility Commission of Ohio).
Retail Customer Choice: A utility company is required to transport electricity from a generating plant it does not own directly to its retail customers. This gives retail customers the ability to purchase electricity from sources they choose.
Third-Party Supplier: A person or corporation, broker, marketer, aggregator, or any others who sell electricity, natural gas, or related services using the transmission and/or distribution facilities of a utility company; someone other than the utility that supplies electricity or natural gas to the customer. Examples are companies like Direct Energy and Engie.
Unbundling: Itemizing utility company services (generation, transmission, distribution, stranded costs, local service) so the customer knows the cost of each service.