May 29, 2017

Energy-Related Terms

Alternating Current (AC)– Electric current that reverses direction at regularly recurring intervals of time (such as 50 cycles per second), known as the frequency. AC can easily be converted to higher or lower voltages. (See also Direct Current.) In the United States the standard is 60 cycles.

Ampere (amp)– A unit of measure that tells how much electricity flows through a conductor. Amps = watts divided by volts. On a 120-volt system, a dozen 100-watt bulbs draw 10 amps of electric current.

Barrel– A unit of measure for petroleum products, equal to 42 gallons.

Brownout– A reduction in the voltage of power supplied to customers. It results from insufficient supply of power to match demand. It’s the first cousin to a blackout, which is what happens next if demand doesn’t drop or more power isn’t produced in time.

EEI– The Edison Electric Institute, a Washington, D.C.-based national trade organization of investor-owned electric companies that provides industry information and monitors regulatory changes and political developments.

EIA– The Energy Information Administration, an agency of the U.S. Department of Energy that collects and analyzes statistical information. It provides a wealth of information at It also gathers required information from industry participants.

Federal Energy Regulatory Commission (FERC)– The federal regulatory agency within the Department of Energy that oversees interstate electricity sales, electric rates, hydroelectric licensing, natural gas transmission, gas and oil pipeline rates, and investor-owned utility transmission.

Federal Power Act– Legislation, enacted in 1920 and amended in 1935, that governs the FERC.

Federal Power Commission (FPC)– The federal agency that preceded the FERC.

Frequency– The rate at which alternating current oscillates, expressed in cycles per second, or Hertz (Hz). The standard for alternating current is 60 Hz in the United States, and 50 Hz in Europe.

Gas– One of the three forms of matter, the others being solid and liquid.

Greenhouse Effect– The warming of the atmosphere caused by the buildup of “greenhouse” gases, which allow sunlight to heat the earth while absorbing the infrared radiation returning to space, preventing the heat from escaping. Gases contributing to the greenhouse effect include carbon dioxide, methane, chlorofluoro-carbons, ozone and water vapor (which you see as steam).

Grid– The network of high-voltage transmission lines through which power moves. In the United States, there are three distinct electric power grids: the Eastern Interconnection, the Texas (or ERCOT) Interconnection and the Western Interconnection. The grid has big, fat power lines that have a tendency to hum.

IOU– Short-form for an “investor-owned utility,” i.e., a utility that has stockholders.

Main– A distribution line for natural gas or electricity that serves as a common source of supply for more than one service line.

Monopsony– The opposite of monopoly. A monopsony is a market in which there is only one buyer for multiple sellers. Gas pipelines typically had a monopsony relationship with producers and a monopoly relationship with downstream customers. The creation of a national grid system with open access policies results in competitive relationships that are sensitive to price.

Off-Peak– A period of lower energy demand.

Peak Demand– The maximum electric load, including losses experienced by a system, in a given period. It is the actual demand by all system customers plus losses.

Power Broker– An individual or firm that arranges bulk power transactions. Power brokers bring together a seller and buyer, without taking title to the power. Power brokers, unlike power marketers, assume no risk. Utilities will sometimes go to a power broker to find the lowest priced power available, especially in the summertime when high temperatures and high cooling use increase the need for power.

Rate Structure– The schedule of charges that an energy company or utility uses to bill customers for energy, including:

  • Block Rate – A rate that prices various blocks of demand or consumption using different unit charges.
  • Flat– A rate that does not vary with the quantity used or the contract demand.
  • Lifeline– A residential rate for a specified block of energy that is priced below the allocated cost of service.
  • Mileage-Based– A rate determined by the length of the haul.
  • One-Part– A per-unit or commodity charge without components for reservation, demand, etc.
  • Postage-Stamp– Transportation rate applicable to a given zone or area, as opposed to a mileage-based rate.
  • Seasonal– A rate that changes with the season.
  • Step– A tiered price structure that depends on the step within which the last consumed unit falls.
  • Straightline– A constant per-unit charge that does not vary with an increase or decrease in the units used.
  • Three-Part– A rate consisting of a customer charge, a demand charge and a commodity charge.
  • Two-Part– A rate consisting of a demand charge and a commodity charge.
  • Volumetric– A rate or charge based on the amount or volume actually received by the customer.
  • Zone– A rate based on a zone through which the energy moves.

Volt– A unit of electromotive force. One volt, applied to a circuit with a resistance of one ohm, produces a current of one ampere. In the United States, electrical systems of most homes and offices are 110 volts.

*This glossary of terms has been provided by Aquila.