Information regarding Tax Exempt regulations of sales and energy in Massachusetts.American Council for an Energy-Efficient Economy
Glossary of Terms
Bulk electric power grid, bulk electric power system, bulk electric system, bulk power grid, bulk power system -
Capability period - Is one of two specific time periods within a power year. The summer period is June 1 through September 30; the winter period is October 1 through May 31. ISO-NE
Capacity - The rated and continuous load-carrying ability, expressed in megawatts or megavolt-amperes, of generation, transmission, or other electrical equipment. ISO-NE
Capacity commitment period - The one-year period from June 1 through May 31 of the following year for which Forward Capacity Market obligations are assumed and payments are made; same as a power year. ISO-NE
Capacity market - A market where generators receive compensation for investing in generating capacity. Load-serving entities, the market participants that secure electric energy, transmission service, and related services to serve the demand of their customers, make capacity payments to generators to ensure the long-term availability of sufficient generation capacity for the reliable operation of the bulk power grid. ISO-NE
Competitive Power Suppliers – Companies that sell, market deregulated generated electrical energy; also called electricity providers, energy marketers or power generators. The infrastructure upon which power is delivered after the distribution point is owned and operated by your local utility company. See distribution company / utility.
Cost of new entry (CONE) - as a concept, the price of capacity in $/kw-month that is needed to attract sufficient new capacity. It is determined using clearing prices in Forward Capacity Auctions as described in the Market Rule. ISO-NE
Day-ahead - The calendar day immediately preceding an operating day. ISO-NE
Day-ahead energy market - a market that produces financially binding schedules for the production and consumption of electricity one day before the operating day (see energy market and real-time Energy Market). ISO-NE
Day-ahead load obligation (DALO) - For each hour, the requirement that each market participant has for providing electric energy (megawatt-hours) at each node, external node, load zone, or the Hub equal to the megawatt-hours of its demand bids, decrement bids, and external transaction sales accepted in the day-ahead energy market at that location. ISO-NE
Demand - Load; the amount of electrical power used; the level of electricity consumption at a particular time measured in megawatts. ISO-NE
Department of Public Utilities (DPU) – The state agency / department that regulates electrical and natural gas (and other commodities) energy to the utilities as well as providing regulations for a healthy competitive supply market. ISO-NE
Distribution - The delivery of electricity to end users via low-voltage electric power lines (typically <69 kV) (see transmission); the transfer of electricity from high-voltage lines to lower-voltage lines. ISO-NE
Distribution Company or Utility – Your local utility is responsible for the transportation infrastructure system to deliver electrical and natural gas energy to your location from the distribution point or city gate.
dual-fuel capability - When a generator has the flexibility and storage capacity to use oil as well as natural gas. ISO-NE
Electric energy, electrical energy - The ability of an electric current to produce work (heat, light, another form of energy); the generation or use of electric power over a specified time, usually expressed in gigawatt-hours (GWh), megawatt-hours (MWh), or kilowatt-hours (kWh). ISO-NE
Electric energy market, energy market - A system for purchasing and selling electric energy using supply and demand to set the price (see electricity market and wholesale electric energy market). The energy markets operated by ISO are the Day-Ahead Energy Market and the Real-Time Energy Market. ISO-NE
Electricity market - A system for purchasing and selling electricity using supply and demand to set the price (see electric energy market and wholesale electric energy market). In general, electricity markets include electric energy markets, capacity markets, and ancillary services markets, a part of which are regulation markets and operating reserve markets. ISO-NE
Electric power - The rate at which electric energy is transferred or used to do work, measured in kilowatts (or watts or megawatts). ISO-NE
Energy efficiency - A type of other demand resource that is an installed measure or a system on an end-use customer's facility that reduces the total amount of electrical energy and capacity that otherwise would have been needed to deliver an equivalent or improved level of end-use service. Such measures or systems include the use of more efficient lighting, motors, refrigeration, HVAC equipment and control systems, and industrial process equipment. ISO-NE
FERC (Federal Energy Regulatory Commission) – The federal agency that regulates interstate energy creation, transmission, sales and other related interstate energy activities. ISO-NE
Forward Capacity Auction (FCA) - The "descending-clock" annual auction of the Forward Capacity Market during which the price for capacity will be decreased until the quantity of capacity remaining in the auction equals the quantity of capacity needed. ISO-NE
Forward Capacity Market (FCM) - In New England, the locational capacity market whereby the ISO will project the needs of the power system three years in advance and then hold an annual auction to purchase power resources to satisfy the region's future needs. The aim of the FCM is to send appropriate price signals to attract new investment and maintain existing resources where and when they are needed, thus ensuring the reliability of the New England electricity grid. ISO-NE
Forward reserve - The 10-minute nonspinning reserves and 30-minute operating reserves the ISO purchases on a forward basis on behalf of market participants. ISO-NE
Forward Reserve Market (FRM) - In New England, a market used for acquiring the generating resources needed to satisfy the requirements for 10-minute nonspinning reserves and 30-minute operating reserves. ISO-NE
Generation – The process of changing other forms of energy, such as fossil fuels, nuclear, renewable energy sources into electrical energy.
Heat rate - A measure of the efficiency of a thermal power plant; the amount of heat, measured in British thermal units (Btus), required to produce a kilowatt-hour of electrical output. The lower the heat rate, the more efficient the facility. ISO-NE
Independent System Operator (ISO) - An independent, federally regulated organization formed at the recommendation of FERC to impartially coordinate, control, and monitor the operation of a regional bulk electric power system, including the dispatch of electric energy over the system and the monitoring of the electricity markets, for ensuring the safety and reliability of the system. ISO-NE
Intermittent power resource (IPR) - A resource whose output amount and availability are intermittent and not subject to the control of ISO New England or the plant operator because of the intermittent source of fuel (e.g., wind, solar, run-of-river hydro) the resource uses or contractual obligations (e.g. qualifying facilities). IPRs can be resources having less than 5 MW operating within the distribution system. ISO-NE
Kilowatt-Hour (kWh) – The standard measurement unit for electricity at a customer’s meter. For example, ten 100-watt light bulbs used for 1 hour consumes one-kilowatt-hour (1000 watt-hours) of electricity. An average residential customer uses approximately 500 kWh per month.
Line loss - The power lost (turned to heat) during the transmission or distribution of electricity. ISO-NE
Load - Demand; the amount of electrical power used; the level of electricity consumption at a particular time measured in megawatts. ISO-NE
Load factor - The ratio of the average hourly use of electric energy (average load in kilowatts) to the maximum hourly use of electric energy (peak load), expressed as a percentage. ISO-NE
Load management - The use of installed measures, systems, or strategies by end-use customers to curtail their electrical usage during peak hours or shift electrical use to off-peak hours to reduce the amount of capacity needed to deliver an acceptable level of service to those facilities.. ISO-NE
Load response - A reduction of load by demand-side resources ISO-NE
load obligation - The sum of metered load, exports, and load-shifting contracts for which a lead participant is financially responsible. ISO-NE
Load shedding - Controlled or scheduled power outages (controlled blackouts) to balance the demand for electricity with limited supply ISO-NE
Location - A node, external node, load zone, or hub. ISO-NE
Locational Forward Reserve Market - see Forward Reserve Market.
locational marginal price (LMP) - The calculated price of electric energy at a node, load zone, reliability region, and the hub. ISO-NE
Loss-of-load evaluation (LOLE) - An analysis that determines the amount of installed capacity the system needs to meet the NPCC and ISO resource adequacy planning criterion to not disconnect firm load more frequently than one day in 10 years. ISO-NE
New England Power Pool (NEPOOL) - A group formed in 1971 by the region's private and municipal utilities to foster cooperation and coordination among the utilities in the six-state region for ensuring a dependable supply of electricity. Today, NEPOOL members are ISO stakeholders and market participants. ISO-NE
Nonspinning reserve, nonsynchronized reserve - Off-line generation that can quickly be electrically synchronized to the system and increase output to respond to a contingency and serve demand. ISO-NE
Off-peak hours - In New England, weekday hours between 11:00 p.m. and 7:00 a.m. and all day Saturdays, Sundays, and holidays. See peak hours. ISO-NE
On-peak hours - From 7:00 a.m. through 11:00 p.m. on all nonholiday weekdays; same as peak hours. ISO-NE
Operating reserve - The megawatt capability of a power system greater than system demand, which is required for providing frequency regulation, correcting load forecasting errors, and handling forced outages, drawn from spinning and nonspinning sources of power. Also, the synchronized or nonsynchronized reserves that may be used to recover from a contingency. ISO-NE
Peak hours - In New England, the hours between 7:00 a.m. and 11:00 pm on nonholiday weekdays; same as on-peak hours. ISO-NE
Power year - A year that runs from June 1 through May 31 of the following year used to calculate the Installed Capacity Requirement (ICR) for the New England Control Area. The ISO calculates the ICR for each upcoming power year through the capacity commitment period associated with a Forward Capacity Auction. Each power year is the same as a capacity commitment period. ISO-NE
Public Utilities Commission (PUC) – The state agency that regulates electric and gas utilities and competitive power supplies. May also be known as DPU . see above
Real-time - The period in the current operating day for which the ISO dispatches resources to provide electric energy and regulation service and, if necessary, commits additional resources. ISO-NE
real-time energy market - a market that balances differences between the day-ahead scheduled amounts of electricity needed and the actual real-time load requirements (see day-ahead energy market and energy market). ISO-NE
Real-time load obligation (RTLO) - For each hour, the requirement that each market participant has for providing electric energy (megawatt-hours) at each node, external node, load zone, or the Hub equal to the megawatt-hours of load, including external transaction sales and internal bilateral transactions that transfer these obligations. ISO-NE
Real-time prices - Locational marginal prices resulting from the dispatch of power within the operating day. ISO-NE
Real-time reserve market - An ISO market where resources capable of providing 10-minute and 30-minute reserves are designated in real time, for which they are paid the reserve market clearing price. ISO-NE
Reliability - The assurance that power is available even under adverse conditions, such as unplanned outages of generation or transmission lines. ISO-NE
Reliability Agreement - An agreement made between the ISO and a generation owner whereby an approved generator continues to operate, even when it is not economical to do so, to ensure system reliability, and whereby the generation owner recovers the fixed costs for operation; formerly termed Reliability Must-Run (RMR) Agreement. ISO-NE
Renewable Energy Sources – Power that is produced with environmentally-clean power sources such as hydro, wind, and solar.
Restructuring / Deregulation – Opening a market, whose prices and management practices were formerly regulated by government and are now open to competition.
Spinning - On-line capacity electrically synchronized to the system. ISO-NE
Spinning reserve - The reserve capability that a generator can fully convert into electric energy within 10 minutes after receiving a request from ISO New England to do so. ISO-NE
Spot market - A market that typically involves short-term, often interruptible contracting and immediate delivery of specified volumes of electric energy, as opposed to bilateral trading. In New England, the Real-Time Energy Market is a spot market. ISO-NE
Wholesale electric energy market - The buying, selling, and reselling of the electric energy generated by a bulk power system to meet the system's demand for electric energy. New England's wholesale electric energy markets are the Day-Ahead or Real-Time Energy Market. (Also see energy market.) ISO-NE
Wholesale electricity - Power that is bought and sold among generators, utilities, municipalities, and other wholesale entities (see market participants). ISO-NE
Zonal price - The hourly price for electric energy received in a defined load zone calculated using a load-weighted average of the locational marginal prices for the nodes within the load zone. ISO-NE
Natural Gas Terms
Apollo ID - Six digit number at the top of a natural gas invoice.
Balancing -The process of equalizing a shipper's receipt of gas into a pipeline with withdrawals out of a pipeline system. This can be done daily, monthly or seasonally.
Basis Differential- The difference in the market value of natural gas at two separate physical locations at the same point in time.
BTU (British Thermal Unit) - The quantity of heat required to raise one pound of water, one degree Fahrenheit.
Buy at Market Order - A buy order at the current market offer price for a specific volume and month. Buy at market orders are immediately executed at the best current market offer obtainable. This type of order gives the customer the flexibility to take advantage of current market pricing or stop themselves out in real time.
Capacity Assignment - An entity that holds the rights and obligations to interstate pipeline capacity; the entity can transfer those rights and obligations to another entity.
CCF - 100 cubic feet.
CGA (Cost of Gas Adjustment) - The mechanism by which a utility periodically adjusts its prices in order to compensate for changes in the gas acquisition costs.
City Gate - Physical location where gas is delivered by an interstate pipeline to a local distribution company.
Cogeneration - The sequential production of electricity and useful thermal energy from the same energy source.
Cubic Feet - The most common unit of measure of gas volume. One cubic foot roughly equals 1,000 Btu's.
Decatherm - 10 therms of 1 million Btu's. Very roughly: 1 mcf = 1 MMBtu = 1 Dth = 10 ccf.
Distribution - Local pipeline delivery of natural gas.
Dual-Fuel - The ability of a facility or piece of equipment to use more than one kind of fuel, usually gas or oil.
Firm Service - The highest quality sales or service offered to customers - no planned interruption.
Interruptible Service - Gas service that is subject to interruption at the option of the pipeline or LDC. Tariffs for interruptible service are cheaper than firm.
Interstate Pipeline - A federally regulated company engaged in the business of transporting natural gas across state lines from producing regions to end use markets.
LDC - Local Distribution Company
Line Loss - A percentage of gas received by a pipeline or LDC that is retained to compensate for lost and unaccounted for gas.
LNG - Liquefied Natural Gas. Natural gas converted to a liquid state, usually for storage purposes, by pressure and severe cooling.
Load Factor - The ratio of the average amount of gas a customer takes to the peak amount of gas a customer takes in a given period.
MCF - 1,000 cubic feet.
NYMEX - New York Mercantile Exchange: The commodity exchanges based in New York where natural gas futures contracts and other energy futures are traded.
Off-Peak - Period of year when minimum demand for fuel occurs (typically April through October). Generally, costs are lower during this period.
On-Peak - Period of year when maximum demand for fuel occurs (typically November through March). Generally, costs are higher during this period.
Pipeline Capacity - A service provided by a pipeline for a fixed monthly reservation charge which gives a transporter the right to move up to a maximum daily quantity of gas between defined points on the pipeline's system.
Rate Class - Type of billing classification or category.
Spot Gas - Interruptible or best efforts gas for specified volumes on a limited (usually monthly) basis.
Stop Loss Order - An above market buy order for a specific price, volume, and month. Stop loss orders can protect a customer from upside price risk in a rising market. If the NYMEX trades above the stop loss level during regular trading hours by at least 1/10 cent, execution is guaranteed. Stop loss orders may be filled higher in the event of an overnight "gap higher" through the stop loss level.
Tariff - Compilation of all of the effective rate schedules for a company, along with general terms and conditions.
Telemetering - A form of remote metering - often electronic.
Therm - Unit of measure of heat content, equivalent to 100,000 Btu's.
Transportation Gas - Third party owned gas delivered on the interstate pipeline system to a LDC on behalf of a customer.
Trigger Order - A below market buy order for a specific price, volume, and month. Trigger Orders enable customers to take advantage of a falling market. If the NYMEX trades below the trigger level during the regular session by at least 1/10 cent, order execution is guaranteed. However, if trigger levels are not achieved, customers can be vulnerable to substantial upside price risk in a rising market.
Unbundling - Separating costs on a pipeline or distribution system and charging customers for each component (commodity, transportation, storage etc).
WACOG - Weighted Average Cost of Gas.