Energy Markets and Electricity Industry Vocabulary

Comprehensive vocabulary flashcards covering terms, definitions, units, billing structures, regulatory standards, and market mechanics from the electricity and energy markets lecture notes.

Electricity Supplier

A company that purchases electricity and sells the supply or commodity to customers.

Broker

An intermediary who helps customers find suppliers, compare pricing, negotiate contracts, and manage procurement.

Generator

A company or facility that produces electricity, such as a natural-gas, nuclear, solar, wind, or hydro plant.

Utility / LDC

A local company responsible for delivering electricity to the customer's property and maintaining the local distribution system.

ESCO

Energy Service Company; in competitive markets, an ESCO can sell electricity supply while the utility continues delivering it.

Wholesale Market

A marketplace where electricity is bought and sold between generators, suppliers, utilities, and other market participants.

ISO

Independent System Operator; coordinates electricity markets and/or grid operations in a region.

RTO

Regional Transmission Organization; coordinates wholesale electricity markets and transmission across a larger region.

NYISO

New York Independent System Operator, which operates New York's wholesale electricity market and coordinates the state's bulk electric system.

PJM

A regional transmission organization covering a large portion of the Eastern U.S.

Load

The amount of electricity being consumed by a customer or group of customers.

Load Profile

A customer's pattern of electricity usage over time.

kW

Kilowatt; measures power/demand at a given point in time.

MW

Megawatt; equal to $1{,}000\,\text{kW}$.

kWh

Kilowatt-hour; measures the amount of electricity consumed.

MWh

Megawatt-hour; equal to $1{,}000\,\text{kWh}$.

Demand

The amount of electricity being drawn at a particular time, usually measured in $\text{kW}$.

Peak Demand / Cap Tag

The customer's highest measured electricity demand during a particular period.

Demand Charge

A charge based on a customer's electricity demand, generally measured in $\text{kW}$.

Energy Charge

A charge based on the amount of electricity consumed, usually measured in $\text{kWh}$.

Peak Hours

Periods when electricity demand is high and prices can be higher.

Off-Peak

Periods when electricity demand is generally lower.

Fixed Price

An arrangement where a customer agrees to a predetermined electricity supply rate for a specified contract term.

Index Price

An electricity price tied to a market index, meaning the price can move with the market.

Block & Index

A procurement strategy combining fixed-price blocks of electricity with indexed/market-priced electricity.

LMP

Locational Marginal Pricing; wholesale electricity price at a specific location, reflecting energy, congestion, and losses.

Node

A specific location on the electric grid used for pricing and market purposes.

Hub

A major pricing/reference point in an electricity market.

Basis

The difference between a particular location's electricity price and a reference hub/index price.

Congestion

A condition occurring when transmission constraints prevent electricity from flowing freely, potentially causing prices to differ between locations.

Transmission

High-voltage movement of electricity over longer distances from generators toward distribution systems.

Distribution

The local delivery of electricity from substations to homes and businesses.

T&D

Transmission & Distribution; the infrastructure used to move electricity from generation to the customer.

Capacity

Resources available to meet electricity demand and maintain grid reliability.

Capacity Charge

A charge associated with maintaining/procuring sufficient generation capacity to meet demand and reliability requirements.

Ancillary Services

Services used to maintain grid reliability, balancing, frequency, reserves, and related functions.

REC

Renewable Energy Certificate; represents the environmental attributes associated with $1\,\text{MWh}$ of renewable generation.

Renewable Energy

Electricity associated with resources such as wind, solar, hydro, geothermal, and biomass.

Renewable Portfolio Standard (RPS)

A state requirement relating to the amount of electricity or renewable attributes that must come from renewable resources.

CES

Clean Energy Standard – New York State Clean Energy Initiatives.

Meter

A device that measures a customer's electricity consumption and/or demand.

Meter Number

A unique identifier associated with a customer's electricity meter.

Utility Account Number

An account identifier assigned by the customer's utility.

Rate Class

A utility classification determining how a customer is billed based on factors such as usage, demand, and service characteristics.

C&I

Commercial & Industrial customers.

Supply

The actual electricity commodity being purchased for the customer.

Delivery

The utility's service of physically delivering electricity to the customer's location.

Supplier Margin

The difference between the supplier's underlying costs and the price charged to the customer, before other applicable expenses.

Contract Term

The length of the customer's electricity supply agreement.

Renewal Date

The date or period when a customer's existing supply contract expires and can be renewed or replaced.

Early Termination Fee

A fee that may apply when a customer ends a supply contract before its scheduled expiration.

Enrollment

The process of establishing a customer with a new electricity supplier through the applicable utility/market process.

Switch

A customer's move from one electricity supplier to another.

EDI

Electronic Data Interchange; the electronic exchange of customer, usage, enrollment, and billing information.

Usage History

The historical record of how much electricity a customer has consumed.

Procurement

The process of purchasing electricity supply for a customer.

Hedge

A strategy used to reduce exposure to changing electricity prices.

Wholesale Price

The price at which electricity is bought or sold in the wholesale market.

Retail Price

The price charged to the end-use customer.

Commodity

The actual electricity being purchased or sold, separate from delivery-related services.

Generation

The production of electricity.

Grid

An interconnected electrical system used to generate, transmit, distribute, and consume electricity.

Substation

A facility that changes voltage and helps route electricity through the transmission and distribution system.

Voltage

Electrical potential; commercial and industrial customers can receive service at different voltage levels.

Renewal

The process of negotiating a new supply agreement when an existing contract approaches expiration.

Pricing Request / Quote

A request for a supplier to provide a price for a customer's expected electricity requirements.

RFP

Request for Proposal; a formal request for suppliers to submit pricing/contract proposals.

Usage Forecast

An estimate of how much electricity a customer is expected to consume in the future.

Risk Management

Managing exposure to electricity-market price fluctuations and customer usage uncertainty.

MRD

Meter Read Date.

UCB (Utility Combined Billing)

Consolidated billing where the utility puts both supply and delivery charges on one single bill.

Dual Billing

A billing method where supply is billed by the ESCO and delivery is billed by the utility.

Purchase of Receivables (POR)

A billing arrangement in which the utility purchases an energy supplier's customer receivables, displays supplier charges on the utility bill, and collects payment from the customer before paying the supplier less a discount or fee.

Demand Response

A program in which customers reduce or shift their electricity or natural gas use when requested to help balance demand with available supply, typically receiving payments, bill credits, or reduced rates.

CSRP

Commercial System Relief Program; an electric demand response program rewarding customers for reducing electricity use when a utility calls an event to relieve strain on its system, featuring Day-Ahead-Notice ($21\,\text{hours}$ prior).

DLRP

Distribution Load Relief Program; an electric demand response program where customers reduce electricity use when a specific part of the distribution system needs urgent relief, operating on Day-of-Notice (same day notice).