Definitions

ELECTRICITY TERMS & DEFINITIONS

AVAILABILITY: The ratio of the number of hours a piece of equipment is available for use to the number of hours it is required for use. This ratio provides a measure of how much time equipment is not available for use, e.g., when it is undergoing maintenance or repair.

BASELOAD: The level of demand, for heat or electricity, which exists for the majority of the operating period. The demand will rarely be less than this base load. This load should be met from the lowest cost sources.

CAPACITY: The maximum power output or the load for which a generating unit, generating station, or other electrical apparatus is rated. Common units include kilovolt-ampere (kVa), kilowatt (kW), and Megawatt (MW).

DEMAND: Rate at which electricity is delivered, expressed in kilowatts, kilovoltamperes or other unit, at a given instant or averaged over a specified time.

DEMAND CHARGE: Charge for the maximum rate at which energy is used during peak hours of a billing period.

DISTRIBUTED GENERATION (DG): The integrated or stand-alone use of small, modular electricity generation resources by utilities, utility customers, and/or third parties in applications that benefit the electric system, specific end-use customers, or both. From a practical perspective, it is a facility for the generation of electricity that may be located at or near end users within an industrial area, a commercial building, or a community.

DISTRIBUTED power: Process in which generation facilities, energy storage facilities (thermal energy storage, batteries) and other strategies such as district energy and demand-side management efforts are located at or near the customer’s premises.

EXIT Fee: Charge levied by a utility when a customer leaves the grid or reduces its load through distributed generation, to compensate for investments made by the utility on behalf of that customer.

INDEPENDENT SYSTEM OPERATOR (ISO): A neutral and independent organization with no financial interest in generating facilities that administers the operation and use of the transmission system.

INDEPENDENT POWER PRODUCER (IPP): Any entity not regulated by the government as a public utility that owns or operates an electricity generating facility and offers electric power to utilities and/or the public (also known as Non-Utility Generator).

INSTALLED CAPACITY: Maximum load-carrying ability of a generating facility.

INTERRUPTIBLE RATE: Price paid for electricity by commercial or industrial customers that have agreed to have their power cut off by the supplier in the event of high demand due to severe weather or equipment problems.

LOCAL DISREIBUTION COMPANY (LDC): Traditional utility that distributes natural gas or electricity or both to local customers.

NET METERING: Allows the electric meters of customers with generating facilities to turn backwards when the generators are producing energy in excess of the customers’ demand, enabling customers to use their own generation to offset their consumption over a billing period.

PEAK LOAD: The peak load is the maximum demand for heat or electricity that occurs in any one hour in a year.

RETAIL WHEELING: Transmitting electricity over transmission lines not owned by the supplier of the electricity to a retail customer of a supplier.

SELF-GENERATION: On-site production and use of electricity by an industrial facility or other energy customer.

STRANDED COST: Difference between market value of the generating assets and the amount of the debt still owed on them. If the utility must drop its rates to meet the deregulated competition, revenue may not be adequate to cover the debt and the operating costs of the facility. The amount of debt uncovered is the stranded cost.

THERMAL/ELECTRIC RATIO: A ratio describing the energy use of a particular industry (or facility), in which the total energy used as heat is divided by the total energy used as electric power. This refers to energy used within the plant rather than the energy purchased at the plant gate. This value is usually used in conjunction with assessments of cogeneration options.