Energy Glossary

From BTUs to LDCs, the energy industry is full of lingo. And while SaveOnEnergy.com does its best to keep everything in plain English, we wanted you to have an opportunity to learn the language of energy. Not only will it simplify energy for you, it'll make you a smarter energy consumer, which is part of our goal.

A | B | C | D | E | F | K | L | T | U | W

A

Aggregator – A group or organization that represents energy consumers to buy electricity or natural gas in a deregulated or restructured energy industry.

B

Broker – A retail agent who arranges or negotiates for the purchase and sale of electricity or natural gas. Brokers usually act on the behalf of others and do not buy energy for their own end-use customers.

Btu – Short for British thermal unit, a standard unit of energy. One Btu is equal to the amount of heat required to raise the temperature of one pound of liquid water by 1 degree Fahrenheit at its maximum density, which occurs at a temperature of 39.1 degrees Fahrenheit.

C

City Gate – The location where natural gas transfers from the interstate gas pipeline to the local utility's distribution system.

Conservation – Reduction of energy use.

Cubic Feet – The most common unit of measurement of natural gas volume. It is the amount of gas that can fit within a space one foot times one foot times one foot in volume. One cubic foot of pipeline-quality gas contains approximately 1,000 Btu.

D

Decatherm (or, Dekatherm) – Ten therms or 1 million Btu. One decatherm is equal to approximately 1,000 cubic feet (Mcf).

Default 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 Charge – A charge for gas or electric service based on actual or estimated peak daily (or hourly, weekly, monthly) usage of a customer.

Deregulation – The elimination of regulation from a previously regulated industry or sector of an industry (such as electricity or natural gas); sometimes used interchangeably with restructuring.

Distribution – The delivery of electricity or natural gas to the retail customer's home or business through local electrical lines or gas pipelines.

E

Electric Supplier – An entity (including an energy marketer or energy services company – or ESCO) licensed or approved by a state utility regulatory agency to provide electricity supply to consumers. With energy choice, consumers can choose their electric supplier. The energy is then delivered by the consumer's utility distribution company.

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

End-Use – The ultimate use to which energy service is put, such as water heating and air conditioning.

Energy Service Company (ESCO) – Companies that offer customers energy and energy-related products and services; required to be approved or licensed by state public utility commissions.

F

Federal Energy Regulatory Commission(FERC) – The Federal Energy Regulatory Commission regulates the price, terms and conditions of natural gas and electricity sold in interstate commerce and regulates the price, terms and conditions of all wholesale transactions. FERC is the federal counterpart to state utility regulatory commissions.

Fuel Charge – The rate charged per kilowatthour (or cubic feet) to cover the costs of the fuel used to produce power (or gas).

K

Kilowatt-hour (kWh) – 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.

L

LDC – See Local Distribution Company

Liquefied Natural Gas (LNG) – Natural gas that has been liquefied by lowering its temperature to negative 260 degrees Fahrenheit.

Load (Electric) – 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 any one time, or the utility's maximum capacity or demand.

Load Factor – The ratio of average energy demand to maximum demand for a time period, such as one year, one month, or one hour. An end user with a high load factor uses energy at a consistently higher level year-round than an end user who may use energy specifically for heating or cooling.

Local Distribution Company (LDC) – A business entity that obtains its primary revenues from the operations of a local retail gas distribution system and operates no transportation system other than connections within its own system or to the system of another company. Most often, an LDC is a utility.

Long-Term Contract – A supply contract in the physical market covering energy deliveries of more than 18 months. Mid-term and long-term contracts are significant because they extend over a heating season.

T

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.

Therm – The equivalent of 100,000 Btu or approximately 100 cubic feet of natural gas.

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.

Transportation – Moving natural gas through pipelines from one place to another.

U

Unbundling – Separating electric or natural gas utility service into its basic components (such as electric generation, transmission and local distribution; and natural gas production, pipeline transportation and local distribution) and offering each component separately for sale with separate rates for each component.

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

W

Wires Charge – Charges levied for transmission or distribution wires.