Glossary of Terms (Electricity and Natural Gas)

Account Number: Your account number should be clearly stated on your bill, and you should have this number readily available when contacting your utility to ensure faster service.

Ancillary Services: These are additional services necessary to ensure transmission of energy from the site of generation to the consumer. These services are typically included as part of your energy bill.

Base Bill: This is your charge. It is calculated by multiplying consumption by the rate you pay for electricity.

Base Load: Electric plants must provide a minimum amount of electricity on a constant basis to ensure continual service. This is called the base load. Knowing your base load will allow you to make more accurate predictions about future use and expenses.

Basic or Customer Charge: A flat fee covering routine business and administrative costs.

Basic Services: These are services needed for the actual delivery of electricity. There are three basic services: generation, transmission and distribution. The generation is at the power plant, transmission is to regional facilities and distribution is to end-users.

Billing Period: The total amount of days included in the billing cycle. It should also include the date of the previous meter reading and the next meter reading.

BCF: BCF is an abbreviation for billion cubic feet. This term is used as a unit of measurement for natural gas.

BTU: BTU is an abbreviation for British Thermal Unit, which is a traditional unit of heat. This is a unit of measurement that is roughly equivalent to the amount of heat required to raise the temperature of a pound of water by one degree Fahrenheit.

Budget Billing: Budget billing allows you to pay a fixed amount for electricity each month. By averaging bills out over 12 months, each monthly bill is the same amount until the total bill is paid. The company may adjust the bill four times a year, up or down, depending on the customer’s use.

Cancellation Provisions: A contract clause allowing a party to break a contract, usually with a penalty.

CCF: Equals the volume of 100 cubic feet of natural gas

Commission: A Public Utility Commission (PUC) is a state regulatory agency that provides oversight, policy guidance and direction to public utilities.

Consumer Contract: The written disclosure statement of the terms of service between a customer and an electric supplier.

Customer Name and Mailing Address: Your name (or the name of the person responsible for the account) should appear on the bill, along with the mailing address (which may be different than the actual service address).

Daily Peak: The daily peak is the greatest amount of electricity used during a certain period of a day. It can be measured in various intervals, such as hourly, every half-hour or quarter hour.

Demand: Demand is the amount of electricity that you use. It can refer to your consumption at any given moment. It can also be calculated as an average over time. Demand is typically expressed in kilowatts or megawatts.

Deregulation: In the energy industry, deregulation refers to the separating of electric service charges into generation, transmission, distribution, and other services. This permits customers to buy generation services from competing suppliers.

Direct Access: Direct access is an arrangement that gives consumers the power to buy electricity from any supplier in their market and use their utility’s transmission and distribution network.

Distribution: The delivery of electricity to your home or business.

Distribution Charge: This charge is to compensate your local utility for the costs associated with transporting and delivering power to your home. It can also include charges for administering your account services, like maintenance, repairs, meter reading and emergency services.

Due Date: The date by which your total amount due must be paid. Most utility companies assess a late payment charge if full payment is not received by the due date, so be sure to submit your payment in a timely fashion.

Electric Generation Supplier (EGS): A corporation, generator, broker, marketer, aggregator or any other entity licensed by the PUC that sells electricity to customers, using the transmission or distribution facilities of an electric distribution company (EDC).

Energy Service Company (ESCO): A company offering specialized or customized energy services by providing advice and products to reduce customer consumption and bills.

Extra Fees and Surcharges – Your bill may include miscellaneous charges for a wide variety of things such as upgrades to infrastructure, installation of smart meters, the use of renewable energy and more. Pay close attention to this category to make sure you understand what fees you are paying and why those fees are being applied to your account. Do not hesitate to contact your utility’s customer service department should you have questions about any of the charges on your bill.

Fixed Rate: An all-inclusive per kWh price that will remain the same for a stated number of billing cycles. The time period may vary by state.

Flat Rate: A fixed charge for goods and services that does not vary with changes in the amount used, volume consumed, or units purchased.

Generation: The production of electricity.

Generation Charge: The charge for producing electricity. Generation service is competitively priced and is not regulated by a Public Utility Commission. If you purchase electricity from an electric supplier, your generation charge will depend on the contract between you and your supplier.

Green Energy/Power: Also called Renewable Energy. Energy produced or harnessed in an environmentally responsible manner.

Grid: A network for the transmission of electricity throughout the state, region or nation. The term is also used to refer to the layout of an electric distribution system.

Gross Receipts: The total revenue for a calendar year for all electric distribution companies and electric suppliers, which come from the sales of electric energy.

Hourly Metering: The tracking or recording of a customer’s energy consumption in hourly time frames that can be tied to the price of energy.

Interruptible Rate: A special utility rate given to those who agree to have their service reduced or temporarily stopped as part of an agreement with their electric supplier. Circumstances for service interruptions can be periods of high demand or high cost periods of short supply for the utility and/or system emergencies.

Investor Owned Utility (IOU): An electric utility owned and operated by private investors.

Kilowatt (kW): (1) A measure of demand for power during a preset time–minutes, hours, days, months; (2) 1,000 watts. A 100-watt light bulb used for 10 hours is equivalent to a kilowatt.

Kilowatt-hour (kWh): The basic unit of electric energy for which most customers are charged in cents per kilowatt-hour. A kilowatt-hour is the equivalent of using ten 100-watt light bulbs for one hour.

LNG: LNG stands for liquefied natural gas. It can both generate electricity or be used as a fuel. By cooling natural gas to negative 260 degrees Fahrenheit, the gas enters the liquid state.

Load Factor:  A calculation that compares your total usage of electricity in a month (in kW-hr) versus the highest usage at any time during the same time period(aka- demand).  Many EGS require a minimum Load Factor to qualify for 3^rd party supply contract.

Load Management: Shifting use of electricity from periods of high demand to periods of lower demand.

MCF: equals the volume of 1,000 cubic feet of natural gas. M is the Roman numeral for 1,000.

Meter Number(s): the identification number of the meter used to record your home energy usage. Your home may use more than one meter, and therefore your bill may include multiple numbers.

Meter and Usage: This section of the bill provides details related to the use of energy in your home during the billing period. It may also include your usage history, comparing this billing period to past periods.

PTC (Price-to-compare): The price per kWh that the utility will charge.

Public Utility Commission (PUC): The Public Utility Commission (PUC) is the state regulatory agency that provides oversight, policy guidance and direction to public utilities.

Purchased Power Adjustment: This is a clause in rate schedules that allows for adjustments to bills. This adjustment happens when energy from another electric system is acquired. For instance, you can generate electricity yourself with an on-site renewable energy system.

Rate Class: There are several different rate types including residential, commercial and industrial. Your home energy bill should be classified as residential.

Real-Time Pricing: Rates that reflect the actual moment-by-moment cost of providing electricity.

Reliability: The providing of adequate and dependable generation, transmission and distribution service.

Renewable Energy: Also called Green Energy/Power. Energy produced or harnessed in an environmentally responsible manner.

Renewal Notice: Suppliers typically send out an initial renewal notice about 45 to 90 days prior to the contract’s expiration date as a reminder that the contract is near the end date. This time period may vary by state.

Supply Charge: The amount you are charged for actual energy consumed in your home. It generally will make up the largest portion of your overall bill. This charge takes into account your energy usage and the costs needed to generate that energy. It is measured in kilowatt hours (kWh) for electricity and in therms (TH), hundred cubic feet (Ccf) or thousand cubic feet (Mcf) for natural gas. This value allows you to see the rate you are charged per unit of energy consumed.

Taxes: Any federal, state and local taxes will be included on your bill.

Third Party Verification (TPV): This is a computerized recording where the customer has to answer specific yes or no questions, which in turn verifies that the customer is enrolling their account(s) on their own volition and that it is being done in accordance to the PUC rules. It’s confirming overall the customer’s decision to enroll their account(s).

Therm (TH): A unit for measuring heat, especially when calculating amounts of gas used. It is roughly the same as 100 cubic feet or 1 CCF.

Time of Use: The tracking or recording of a customer’s energy consumption during specific periods of time that can be tied to the price of energy.

Total Amount Due: The combined amount of your supply and distribution charges, taxes and all other fees that must be paid by the due date.

Variable Rate: An all-inclusive per kWh price that can change by the hour, day, month, etc. according to the terms and conditions in the supplier’s disclosure statement.