Affiliate: A company that is directly or indirectly controlled by, or shares the same owner as, another company.

Aggregator: A group or organization that represents energy consumers to buy electricity and tries to negotiate lower prices. The group of consumers is called a buying group.

Avoided Cost: The incremental cost that a utility would have to incur if it did not acquire energy from another source. Thus, it is the cost of producing or delivering power that the utility can avoid by lowering capacity and energy requirements.

Base Rates: The rates utility charges to cover its non-fuel costs.

Broker: Any entity that serves as an agent or intermediary in the purchase and sale of electricity to retail customers.

Capacity: The amount of electric power that can be delivered at one time by a generating unit, generating station, or all the plants on an electric system.

Co-generator: A power plant that produces both electrical (or mechanical) energy and thermal (steam or process heat) energy.

Competition: Allowing two or more entities to sell similar goods and services, in this case energy generation, in the same market.

Consumer Contract: A written agreement between a customer and an electricity supplier.

Contract Terms: The provisions of an agreement between an electricity supplier and a consumer, including such items as the cost, length of service, and ability to end the contract.

Cramming: The practice of adding charges to a customer's monthly bill for services that the customer has not authorized. This is an illegal practice.

Customer Charge: A flat monthly charge payable regardless of the level of usage.

Customer Choice: The ability of electricity consumers to shop, compare prices, and choose the company that generates or supplies their electricity.

Index Service: The electric generation service provided to any consumer who does not or is unable to arrange for or maintain electric generation services with an electric supplier after deregulation begins.

Demand: The amount of energy used at a specific moment in time, measured in watts, kilowatts (kW=1000 watts), megawatts (mW=1000 kilowatts, or 1 million watts).

Deregulation: The elimination of monopoly service in an industry to allow competition to develop, sometimes used interchangeably with restructuring.

Distribution: The process of delivering electricity through low-voltage power lines to a consumer's home or business. Distribution includes local wires, transformers, substations and other equipment used to deliver electricity from the high-voltage transmission lines to homes and businesses.

Distribution Utility: The regulated electric utility entity that constructs and maintains the distribution wires connecting the transmission grid to the final customer.

Electric Supplier: An entity (including an electric aggregator or participating municipal electric utility) licensed by a state utility regulatory agency to provide electric generation services to consumers. With electric choice, consumers can choose their electric supplier. The power is then delivered by the consumer's electric distribution company.

Electric Utility: Any person or state agency with a monopoly franchise (including any municipality) that sells electric energy to end-use customers.

Energy: The result of consuming power over a period of time. In electricity, measured in watthours: 1000 watthours = 1 kilowatt hour, or the equivalent of a 100 watt bulb running for 10 hours. Most electricity rates/prices for residential service are quoted in kilowatt-hours. In gas, measured in volumes of gas (cubic feet) or a proxy for volumes (therms, q.v.).

Energy Efficiency Programs: Programs designed to help consumers use energy more efficiently.

Federal Energy Regulatory Commission (FERC): The Federal Energy Regulatory Commission regulates the price, terms and conditions of power sold in interstate commerce and regulates the price, terms and conditions of all transmission services. FERC is the federal counterpart to state utility regulatory commissions.

FPA - Federal Power Act of 1935: Established guidelines for federal regulation of interstate energy sales. It is the primary statute governing FERC regulation of the electric sector.

Generation: The process of producing electrical energy. Generation may also refer to the amount of electrical energy produced, usually expressed in watt-hours, kilowatt-hours (kWh), or megawatthours (MWh).

Generation Company: An entity that generates electricity.

Grid: A system of interconnected power lines and generators that is managed to meet the requirements of the customers connected to the grid at various points.

Green Power: A general term that describes power that is environmentally friendly. It typically uses a mix of energy sources with renewable energy being at least one of the sources.

IPP - Independent power producer: A company other than a utility that operates a generation facility and sells power to suppliers for resale to retail customers.

ISO - Independent System Operator: An organization responsible for maintaining instantaneous balance of the grid system, ensuring that loads match available resources.

Kilowatt-hour (kWh): This is the basic unit of electric energy equal to one kilowatt of power supplied to or taken from an electric circuit steadily for one hour. One kilowatt-hour equals 1,000 watt-hours.

Load: The amount of power drawn from a utility system at a given point in time. The peak load is the highest amount of power drawn down at anyone time, or the utilities maximum capacity or demand.

Load Profile: Information on a customer's energy usage over a period of time, sometimes shown in a graph format.

Market-Based Price: A price set by the mutual decisions of many buyers and sellers in a competitive market.

Marketer: An entity selling wholesale or retail power in a competitive market.

Megawatt-hour (MWh): One megawatt-hour equals one million (1,000,000) watt-hours.

Monopoly: The only seller with control over market sales.

Non-Utility Generator (NUG): Any entity not regulated by the government as a public utility that owns or operates a generating facility and offers electric power for sale to utilities or the public (also known as Independent Power Producer).

Obligation to Serve: The obligation of a utility to provide electric service to any customer who seeks that service and is willing to pay the rates set for that service.

Off-Peak: Those periods of time when energy is being delivered far below the utility's maximum demand.

On-Peak: Those periods of time when energy is being delivered near and including the utility's maximum demand.

Peak Load: The maximum load experienced by an electric customer over a given period of time.

Peaking Capacity: Capacity used in times of maximum demand.

PJM:an organization responsible for the operation and control of the bulk electric power system throughout major portions of five mid-Atlantic states and the District of Columbia.

Power Pool: Two or more interconnected electric systems that seek to obtain greater reliability of service and efficiency of operation by coordinating the development and operation of their electric generation and transmission facilities.

Price Cap: A way of setting rates in which the utility is given a limit on the average dollar-per-customer revenue it may collect.

Provider of Last Resort: A legal obligation (traditionally given to utilities) to provide service to a customer where competitors have decided they do not want that customer's business.

Public Commission: State agency that is responsible for regulating the state's public utilities. The Commission is overseeing the deregulation of the electric market.

PURPA - The Public Utility Regulatory Policy Act of 1978: Among other things, this federal legislation requires utilities to buy electric power from private "qualifying facilities" at an avoided cost rate.

Reliability: The ability of the electric system to supply the electrical demand and energy requirements at all times and to withstand sudden disturbances such as electric short circuits or unanticipated loss of system facilities.

Renewable Energy: Sustainable energy technologies that include solar, wind, trash-to-energy, water, methane gas from landfills, fuel cells, and biomass.

Restructuring: Usually refers to separation of the utility functions of vertically integrated energy utilities into individually operated and -owned entities, sometimes used interchangeably with deregulation.

Retail Competition: A system under which more than one electric provider can sell to retail customers, and retail customers are allowed to buy from more than one provider.

Retail Market: A market in which electricity and other energy services are sold directly to the end-use customer.

Securitization: A process that allows utilities to use the expected future revenue from its monopoly customers to finance bonds. It has been used to pay off stranded costs in some states. (See Stranded Costs)

Service Area: The geographical territory served by an electric company.

Slamming: A term used when an electric supplier switches a consumer's service without permission. Slamming is illegal.

Stranded Costs: Costs electric utilities will not recover as power markets move from protected monopolies to open, competitive environments.

Switching: Refers to a customer receiving retail electric service/supplies from a company or organization other the customer's traditional utility.

Tariff: A document, approved by the responsible regulatory agency, listing the terms and conditions, including a schedule of prices, under which utility services will be provided.

Time-of-Use (TOU) Rates: The pricing of electricity based on the estimated cost of electricity during a particular time block, either time-of-day or by season.

Transmission: The process of transporting electricity from a generation company to an electric company over high-voltage power lines.

Transportation: Moving gas through pipelines from one place to another.

Unbundling: Separating electric utility service into its basic components -- generation, transmission and distribution -- and offering each component separately for sale with separate rates for each component.

Universal Service: Electric service sufficient for basic needs available to all members of the population regardless of income.

Utility: A regulated energy company with the characteristics of a natural monopoly.

Wholesale Competition: A system in which a power distributor can buy its power from a variety of power producers.

Wholesale Power Market: The purchase and sale of electricity from generators to resellers (who sell to retail customers).

Wholesale Transmission Services: The transmission of electric energy sold, or to be sold, at wholesale in interstate commerce.

Wires Charge: Charges levied for the use of the transmission or distribution wires.