Glossary of Energy Market Terms S-Z

Sales Customer - A customer who buys natural gas or electricity with a package of other services from a utility.

Sales for Resale - Energy supplied to other electric utilities, cooperatives, municipalities, and Federal and State electric agencies for resale to ultimate consumers.

SCADA - Supervisory Control And Data Acquisition. A utility term for system-wide metering and data handling system; being adopted by some large end users to describe their own metering and load control systems

Schedule - An agreed-upon transaction size (megawatts), start and end time, beginning and ending ramp times and rate, and type required for delivery and receipt of power and energy between the contracting parties and the Control Area(s) involved in the transaction.

Schedule Confirmation - The process of verifying the accuracy of an interchange schedule(s) between all the entities to the transaction.

Scheduled Losses - The scheduled power transfer to a transmission provider for compensation of losses incurred on that provider's transmission system due to a transfer of power between purchasing and selling entities.

Scheduled Outage - The shutdown of a generating unit, transmission line, or other facility, for inspection or maintenance, in accordance with an advance schedule.

Schedule Implementation - The process of entering the details of a negotiated schedule into the control system(s) of a Control Area(s) involved in a transaction of power and energy.Scheduling, System Control, and Dispatch Service Provides for a) scheduling, b) confirming and implementing an interchange schedule with other Control Areas, including intermediary Control Areas providing transmission service, and c) ensuring operational security during the interchange transaction.

Schedule Period - The length of time between the nominal starting and ending time of each schedule.

Scheduling Coordinator - Often abbreviated SC, any entity responsible for gathering and reporting load profiles of many customers in order to plan generation and transmission. Such services are typically performed by utilities and large marketers, and offered by them to smaller marketers. An ISO also acts as a Scheduling Coordinator for the entire load passing through its jurisdiction.

SCR - Special case resources; typically power generators that are run out-of-merit order due to local needs, such as voltage support. Also see Selective Catalytic Reduction (SCR).

SCUC - Security-constrained unit commitment: generators that must run in order to maintain reliable power in a given zone.

Seasonal Gaming - Scheme to take advantage of a seasonal differential between market-based power pricing that remains low during a portion of the year and regulated utility pricing that is lower during the remainder of the year by switching between these two types of suppliers.

Seat - Membership owned in an exchange. Entry to an exchange is generally through seats that are limited in number. Seats are usually held by brokerage houses.

Securitization - One method to handle stranded costs through the issuance of government-sponsored securities to pay utilities for such costs at an interest rate below that available to utilities, thereby possibly decreasing the overall cost to consumers. Payoff for such securities would come from transition charges attached to all electric bills stretched out over a longer period than if utilities were charging off stranded costs, thus potentially reducing the impact seen on individual electric bills.

Securitize - The aggregation of contracts for the purchase of the power output from various energy projects into one pool which then offers shares for sale in the investment market. This strategy diversifies project risks from what they would be if each project were financed individually, thereby reducing the cost of financing. Fannie Mae performs such a function in the home mortgage market.

Security - See Reliability.

Selective Catalytic Reduction (SCR) - The use of a catalyst and ammonia to reduce NOx emissions from fossil fueled power plants and industrial boilers.

Self-Generation - A generation facility dedicated to serving a particular retail customer, usually located on the customer's premises. The facility may either be owned directly by the retail customer or owned by a third party with a contractual arrangement to provide electricity to meet some or all of the customer's load.

Self-Service Customer (SSC) - In some deregulation schemes, a customer with monthly metered demand of 1 MW or greater that procures power without using a power marketer. Also known as a Direct Access Customer in some states.

Self-Service Wheeling - Primarily an accounting policy comparable to net-billing or running the meter backwards. An entity owns generation that produces excess electricity at one site, that is used at another site(s) owned by the same entity. It is given billing credit for the excess electricity (displacing retail electricity costs minus wheeling charges) on the bills for its other sites.

SEP (Service End Points) – Destination points for electric service most often at the meter level, but that could be higher in the chain.

Service Agreement - The initial agreement and any supplements thereto entered into by the a generation or transmission customer and the energy services provider.

Service Delimiter Adapters - This technology is designed especially for low-income customers to allow them to control the level of electric service they receive. For electric service, the adapter is inserted between the electric meter and the electric socket. It contains a circuit breaker which is tripped when the usage limit is exceeded. An external reset button allows the customer to restore service after cutting back on usage.

Settlement - A generic term describing terms under which an agreement has been secured; it may apply to a cash payment made upon delivery of a commodity, or the rules under which a group of parties have agreed to operate.

Settlement Price - The official closing price of the day for each futures contract, established by the exchange as a benchmark for settling margin accounts and determining invoice price for delivery on that day.

7x24 Market - Typical wholesale pricing designation for power supplied at 100% load factor for the 7 day of the week, during all 24 hours of the day.

Shadow Price - Price that would prevail after relaxing a transmission constraint.

Shift Factor - Proportion of flow across a transmission network.

Short - As in to "take a short position," or to be "short on supply," indicates a supplier has only a small (or no) amount of commodity to sell; opposite of long, which indicates the supplier has a significant amount of commodity at risk and/or to sell.

Short the Basis - The purchase of futures as a hedge against a commitment to sell in the cash or spot markets. See also Basis.

Short Ton - A unit of weight equal to 2,000 pounds (as versus a long ton, or tonne, which is 1,000 kilograms, or about 2,206 pounds).

Shoulder Month - The time period just before or after a peak period, typically the moderately climatic months of April, May, September, and October.

Single Contingency - The sudden, unexpected failure or outage of a system facility(s) or element(s) (generating unit, transmission line, transformer, etc.). Elements removed from service as part of the operation of a remedial action scheme are considered part of a single contingency.

Six-Cent Law - A New York State law, created to fulfill requirements of PURPA, that was repealed in 1992. The law required that utilities enter into contracts with qualifying cogeneration, small hydro or alternate energy facilities priced at a minimum of six cents per kilowatt-hour (for commodity only, exclusive of transmission and distribution). Prior existing contracts were grandfathered against the repeal. Other states, such as California and several New England states, had similar laws, most of which were repealed prior to deregulation in those states.

Slamming - The unauthorized switch of a Retail Supplier, or a change in supplier without the customer's knowledge or consent.

Sleeve - A financial arrangement in which energy trader A (who lacks sufficient credit with energy trader B) uses energy trader C (who still has sufficient credit with trader B) to sell to trader B by first selling his energy to trader C. In effect, trader A uses trader C as his "sleeve" to trader B and pays C a premium to "rent" his credit standing with B for the deal.

SMA - Supply Margin Assessment; a FERC term coined in 2002 to describe a determination of sufficient existing excess generating capacity in a geographic area (e.g., that of an ISO or RTO) to maintain reliable supply. This internal analysis is seen as an interim step toward FERC's Standard Market Design (SMD) which calls for a minimum of 12%-18% of capacity above forecast peaks to ensure reliability and competitive wholesale regional power markets.

Small Power Producer (SPP) - Under the Public Utility Regulatory Policies Act (PURPA), a small power production facility (or small power producer) generates electricity using waste, renewable (water, wind, and solar), or geothermal energy as a primary energy source. Fossil fuels can be used, but renewable resource must provide at least 75 percent of the total energy input. (See Code of Federal Regulations, Title 18, Part 292.)

SMD - See Standard Market Design (SMD).

SOx - Sulfur oxides.

Spark Spread - Marketing term for the difference between the spot market value of natural gas and electricity at an given time, based on the conversion efficiency of a given gas-fired plant. As the conversion efficiency becomes greater, the spread between the market value of the gas and that of power derived by burning the gas becomes wider.

Special Contracts - Any contract that provides a utility service under terms and conditions other than those listed in the utility's tariffs. For example, an electric utility may enter into an agreement with a large customer to provide electricity at a rate below the tariffed rate in order to prevent the customer from taking advantage of some other option that would result in the loss of the customer's load (such as cogeneration or transmission bypass). This generally allows that customer to compete more effectively in their product market.

Speculator - An individual who trades rather than hedges in commodity futures with the objective of achieving profits through the successful anticipation of price movements.

Spinning Reserve - That reserve generating capacity running at a zero load and synchronized to the electric system.

Spot Commodity - The actual physical commodity. Sometimes called a cash commodity or actuals.

Spot Markets or Spot Purchases - Any of a number of venues in which purchases and sales, as of electricity, are made by a large number of buyers and sellers, with new transactions being made continuously or at very frequent intervals. Typically, the phrase refers to a lightly or non-regulated market in which the prices, amounts, duration and firmness of the purchases and sales are publicly known, at least shortly after the transaction is completed, if not simultaneously. Spot purchases are often made by a user to fulfill a certain portion of energy requirements, to meet unanticipated energy needs, or to take advantage of low prices.

Spot Price Pool - A neutral and independent organization with no interest in generating facilities that provides an open access spot market for power. A spot price pool typically accepts hourly or half-hourly price bids no more than a day in advance. Suppliers are selected on the basis of economic dispatch taking into consideration price bids, congestion and other transmission costs. Transactions in the pool, as in any competitive market, are settled, at market clearing prices or the bid of the highest priced generator scheduled to deliver power in each time period and major area in the transmission system. Spot price pools, whether voluntary or mandatory, are designed to co-exist with and facilitate markets in bilateral contracts. See also: PoolCo; Power Exchange.

Stable Prices - Prices that do not vary greatly over short time periods. Different customers value stability in different ways. Residential and small business customers typically prefer to have prices that do not vary more frequently than annually, or at most quarterly. Very large customers may find changing hourly spot prices to be "stable" enough for their uses. See also Variable Prices.

Stability - The ability of an electric system to maintain a state of equilibrium during normal and abnormal system conditions or disturbances.

Small-Signal Stability - The ability of the electric system to withstand small changes or disturbances without the loss of synchronism among the synchronous machines in the system.

Transient Stability - The ability of an electric system to maintain synchronism between its parts when subjected to a disturbance of specified severity and to regain a state of equilibrium following that disturbance.

Stability Limit - The maximum power flow possible through some particular point in the system while maintaining stability in the entire system or the part of the system to which the stability limit refers.

Standard Deviation - Mathematical result equal to the square root of the mean of the squares of the deviations of a series of numbers from their arithmetic mean.

Standard Industrial Classification (SIC) - A set of codes developed by the federal Office of Management and Budget (OMB), which categorizes business into groups with similar economic activities.

Standard Market Design (SMD) - A FERC-initiated document and process (put forth 7/31/02) to re-arrange existing wholesale power markets into a more common system by applying "best practices" and other improvements such as LMP, CRR, etc For details, see the Tip of the Month for September 2002.

Standard Offer - Any one of a number of packages of bundled electricity, related services, and distribution services, provided by the former monopoly utility, during a transition period to competition in generation supply. Usually proposed for the stated purpose of giving "customers who choose not to choose" the option of remaining with their existing supplier of electricity.

Standby Facility - A facility that supports a utility system and is generally running under no load. It is available to replace or supplement a facility normally in service.

Standby Service - Support service that is available, as needed, to supplement a consumer, a utility system, or to another utility if a schedule or an agreement authorizes the transaction. The service is not regularly used.

Steam Electric Plant (Conventional) - A plant in which the prime mover is a steam turbine. The steam used to drive the turbine is produced in a boiler where fossil fuels are burned.

Stochastic - Approximately synonymous with “random statistical probability.”

Stocks - A supply of fuel accumulated for future use. This includes coal and fuel oil stocks at the plant site, in coal cars, tanks, or barges at the plant site, or at separate storage sites.

Stop-Loss - A resting order designed to close out a losing position when the price reaches a level specified in the order. It becomes a market order when the "stop" price is reached.

Storage - Energy transferred from one entity to another entity that has the ability to conserve the energy (i.e., stored as water in a reservoir, coal in a pile, etc.) with the intent that the energy will be returned at a time when such energy is more usable to the original supplying entity. A common synonym for Storage is Energy Banking. See also Banking; Energy Exchange.

Straddle (futures) - Also known as a spread, the purchase of one futures month against the sale of another futures month of the same commodity A straddle trade is based on a price relationship between the two months and a belief that the "spread" or difference in price between the two contract months will change sufficiently to make the trade profitable.

Straddle (options) - The purchase or sale of both a put and a call having the same strike price and expiration date. The buyer of a straddle benefits from increased volatility and the seller benefits from decreased volatility.

Strandable Benefit(s). A benefit would be a stranded benefit if the industry were restructured without providing for the continued delivery of this public good or service.

Stranded Assets/Stranded Costs - See Embedded Costs Exceeding Market Prices.

Stranded Benefits - Public interest programs and goals which could be compromised or abandoned by a restructured electric industry. These potential stranded benefits might include environmental protection, fuel diversity, energy efficiency, low-income ratepayer assistance, and other types of socially beneficial programs.

Strangle - An options position consisting of the purchase or sale of put and call options having the same expiration but different strike prices.

Strategic Petroleum Reserve (SPR) - Stocks (currently only crude oil) maintained by the federal government for use during periods of major supply interruption.

Strike Price - The price at which the underlying futures contract is bought or sold in the event an option is exercised. Also called an exercise price. Also, a price accepted by your firm prior to its availability, such that it may be communicated to an energy vendor so that a deal securing it may be consummated as soon as that price appears.

Strip - The simultaneous purchase (or sale) of futures positions in consecutive months.

Subregion - A portion of a Region. A subregion may consist of one or more Control Areas.

Substation - A facility for switching electrical elements, transforming voltage, regulating power, or metering.

Sunk Cost - In economics, a sunk cost is a cost that has already been incurred, and therefore cannot be avoided by any strategy going forward.

Supervisory Control - A form of remote control comprising an arrangement for the selective control of remotely located facilities by an electrical means over one or more communications media.

Supervisory Control and Data Acquisition (SCADA) - A system of remote control and telemetry used to monitor and control the electric system.

Supplier - See Retail Supplier.

Supply-Side - Activities conducted on the utility's side of the customer meter. Activities designed to supply electric power to customers, rather than meeting load though energy efficiency measures or on-site generation on the customer side of the meter.

Surge - A transient variation of current, voltage, or power flow in an electric circuit or across an electric system.

Sustained Orderly Development - A condition in which a growing and stable market is identified by orders that are placed on a reliable schedule. The orders increase in magnitude as previous deliveries and engineering and field experience lead to further reductions in costs. The reliability of these orders can be projected many years into the future, on the basis of long-term contracts, to minimize market risks and investor exposure. See also Commercialization.

SVC - Static VAR compensator: electric device designed to maintain system balance.

Swap - A financial trade involving the exchange of two different pricing structures between users of a commodity. For example, Consumer A (who normally purchases a fixed priced commodity) and Consumer B (a buyer of a variably-priced commodity) would (through a broker) agree to pay for each other's purchases. Consumer A thus assumes the risk of a variably-priced commodity while potentially seeing a lower annual bill, while Consumer B gets price assurance while risking a potentially higher annual bill. Swaps can be conducted directly by two counter-parties, or through a third party such as a bank or brokerage house.

Swing Option - A purchasing regime under which a customer's price is either constant or otherwise defined across a percent range above and below an expected usage, on an hourly, daily, monthly, and/or annual basis, before incurring a penalty or undefined price.See also Balancing and Settlement.

Switching Station - Facility equipment used to tie together two or more electric circuits through switches. The switches are selectively arranged to permit a circuit to be disconnected, or to change the electric connection between the circuits.

SWRTA (The Southwest Regional Transmission Association) - A subregional RTG within WRTA.

Synchronize - The process of connecting two previously separated alternating current apparatuses after matching frequency, voltage, phase angles, etc. (e.g., paralleling a generator to the electric system).

Synchronous Condensing - Process for maintaining voltage stability on a grid, involving use of a standby generator turbine running as a very large electric motor load. When reactive power on a grid is leading, the unit acts to retard it. When reactive power is lagging, the unit acts to excite it. Such systems may be deployed at the ends of long radial transmission lines.

Synthetic Futures - A position created by combining call and put options.

System - An interconnected combination of generation, transmission, and distribution components comprising an electric utility, an electric utility and independent power producer(s) (IPP), or group of utilities and IPP(s).

System Benefits Charge - Any of a number of nonbypassable charges imposed to collect funds to cover the above-market costs of providing public goods (system benefits) that otherwise would be stranded.

System Integration (of new technologies) - The successful integration of a new technology into the electric utility system by analyzing the technology's system effects and resolving any negative impacts that might result from its broader use.

System Operator - An individual at an electric system control center whose responsibility it is to monitor and control that electric system in real time.

Tagging - A NERC requirement to identify interchange transactions between control areas; some have questioned the fairness of this process because it may openly reveal competitive positions or allow utilities to limit competitors' transmission options.

Take-And-Pay (TAP) - Form of PPA or gas purchasing agreement in which a customer commits to buy a defined volume of energy during a defined time period (i.e., term); if the seller fails to deliver a portion of the energy, the buyer pays only for what he receives.

Take a Position - Marketing term meaning purchasing and offering of a commodity for resale.

Take-Or-Pay (TOP) - Form of PPA or gas purchasing agreement in which a customer commits to buy a defined volume of energy during a defined time period (i.e., term); if the buyer fails to take title to the energy, he pays as much (or a percentage) of the cost of the energy as though it had been delivered.

Taking - Reducing the value of someone's property through government action without just compensation.

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.

TAT - See Thermally Activated Technologies.

Technical Analysis - An approach to forecasting commodity prices which examines patterns of price changes, rates of change, and changes in trading volume and open interest, without regard to underlying fundamental market conditions.

Telemetering - The process by which measurable electrical quantities from substations and generating stations are instantaneously transmitted using telecommunication techniques.

Term - The duration, starting, and ending points of a contract.

Term Desk - A trading group that handles trades covering months. See also Cash Desk.

Theoretical Value - An option's value generated by a mathematical model given certain prior assumptions about the term of the option, the characteristics of the underlying futures contract, and the prevailing interest rates.

Therm - 100,000 British thermal units.

Thermally Activated Technologies (TAT) - Central plant equipment, such as absorption chillers, that uses heat to produce cooling or other services commonly used in buildings.

Thermal Rating - The maximum amount of electrical current that a transmission line or electrical facility can conduct over a specified time period before it sustains permanent damage by overheating or before it violates public safety requirements.

Theta - The sensitivity of an option's value to a change in the amount of time to expiration.

Through-and-Out Tariff - Wholesale power tariffs maintained by utilities which levy charges for moving power across or into their transmission networks from others' networks; in July 2003, FERC determined that several such tariffs in the Midwest were blocking interstate commerce and ordered them to be changed or rescinded.

Tick - The smallest monetary unit in which the movement of price of a given commodity may he expressed in futures trading. See Point.

Tie Line - A circuit connecting two or more Control Areas or systems of an electric system.

Tie Line Bias - A mode of operation under automatic generation control in which the area control error is determined by the actual net interchange minus the biased scheduled net interchange.

Tight Pool - Power pool within which a central operator dispatches generation minute-by-minute, often automatically (as versus pools that instead plan generation strategies in a more general and voluntary fashion)

Time Error - An accumulated time difference between Control Area system time and the time standard. Time error is caused by a deviation in Interconnection frequency from 60.0 Hertz.

Time Error Correction - An offset to the Interconnection's scheduled frequency to correct for the time error accumulated on electric clocks.

Time-of-Day Service - See Time-of-Use (TOU) Rates.

Time-of-Use (TOU) Rates - The pricing of electricity based on the estimated cost of electricity during a particular time block. Time-of-use rates are usually divided into three or four time blocks per twenty-four hour period (on-peak, mid-peak, off-peak and sometimes super off-peak) and by seasons of the year (summer and winter). Real-time pricing differs from TOU rates in that it is based on actual (as opposed to forecasted) prices which may fluctuate many times a day and are weather-sensitive, rather than varying with a fixed schedule.

TLP (Term-limit pricing) - An agreement on price between a supplier and a wholesaler or jobber that runs for a specific length of time.

TLR - Transmission loading relief: a process designed to allow transmission operators to drop or change scheduled power deliveries to accommodate limitations on transmission lines; a continuing bone of contention between regulated utilities (who own most power lines) and unregulated and/or wholesale power suppliers and marketers.

Tolling - Marketing tactic in which a holder of natural gas purchases temporary spare generating capacity to convert his fuel into electricity for resale as power. Also known as Form Value Trading.

Top-down - Typical approach taken when unbundling rates, and the opposite of a bottom-up approach. Top-down implies examination of initially only the energy component of a utility rate, exclusive of transmission, distribution, customer service, metering, marketing, taxes, etc. The net result is that only the energy component is subjected to competition, instead of all aspects of the utility rate. A bottom-up approach involves an examination in the reverse order and should therefore be more comprehensive. See also Load Forecast for unrelated use of Bottom-up and Top-Down.

Total Transfer Capability (TTC) - The amount of electric power that can be transferred over the interconnected transmission network in a reliable manner based on all of the following conditions:

For the existing or planned system configuration, and with normal (pre-contingency) operating procedures in effect, all facility loadings are within normal ratings and all voltages are within normal limits.
The electric systems are capable of absorbing the dynamic power swings, and remaining stable, following a disturbance that results in the loss of any single electric system element, such as a transmission line, transformer, or generating unit.
After the dynamic power swings subside following a disturbance that results in the loss of any single electric system element as described in 2 above, and after the operation of any automatic operating systems, but before any post-contingency operator-initiated system adjustments are implemented, all transmission facility loadings are within emergency ratings and all voltages are within emergency limits.
With reference to condition 1 above, in the case where pre-contingency facility loadings reach normal thermal ratings at a transfer level below that at which any first contingency transfer limits are reached, the transfer capability is defined as that transfer level at which such normal ratings are reached.
In some cases, individual system, power pool, sub-regional, or Regional planning criteria or guides may require consideration of specified multiple contingencies, such as the outage of transmission circuits using common towers or rights-of-way, in the determination of transfer capability limits. If the resulting transfer limits for these multiple contingencies are more restrictive than the single contingency considerations described above, the more restrictive reliability criteria or guides must be observed. See Available Transfer Capability.

Transco - See Transmission Company.

Transfer Capability - The measure of the ability of interconnected electric systems to move or transfer power in a reliable manner from one area to another over all transmission lines (or paths) between those areas under specified system conditions. The units of transfer capability are in terms of electric power, generally expressed in megawatts (MW). In this context, "area" may be an individual electric system, power pool, Control Area, subregion, or NERC Region, or a portion of any of these. Transfer capability is directional in nature. That is, the transfer capability from "Area A" to "Area B" is not generally equal to the transfer capability from "Area B" to "Area A."

Transformer - An electrical device for changing the voltage of alternating current.

Transition Costs - See Embedded Costs Exceeding Market Prices.

Transmission - An interconnected group of lines and associated equipment for the movement or transfer of electric energy between points of supply and points at which it is transformed for delivery to customers or is delivered to other electric systems.

Bulk Transmission - A functional or voltage classification relating to the higher voltage portion of the transmission system.

Sub-transmission - A functional or voltage classification relating to the lower voltage portion of the transmission system.

Transmission Company - A privately owned firm whose primary asset and focus is the high-voltage transmission of power. Some ISOs may eventually become transcos in order to create a financial incentive to expand and better control transmission. Often called a transco.

Transmission Congestion Contract (TCC) - A financial instrument that allows a transmitter of power to define his transmission costs irrespecitve of the immediate cost of transmission seen on an ISO's OASIS. Also known as Congestion Revenue Rights and Financial Congestion Rights (FCR).See also Firm Transmission Rights (FTR).

Transmission Constraints - Limitations on a transmission line or element that may be reached during normal or contingency system operations.

Transmission Customer - Any eligible customer (or its designated agent) that can or does execute a transmission service agreement or can or does receive transmission service.

Transmission-Dependent Utility - A utility that relies on its neighboring utilities to transmit to it the power it buys from its suppliers. A utility without its own generation sources, dependent on another utility's transmission system to get its purchased power supplies.

Transmission Reliability Margin (TRM) - That amount of transmission transfer capability necessary to ensure that the interconnected transmission network is secure under a reasonable range of uncertainties in system conditions. See Available Transfer Capability.

Transmission Provider - Any public utility that owns, operates, or controls facilities used for the transmission of electric energy in interstate commerce.

Transmission System (Electric) - An interconnected group of electric transmission lines and associated equipment for moving or transferring electric energy in bulk between points of supply and points at which it is transformed for delivery over the distribution system lines to consumers, or is delivered to other electric systems.

Transmitting Utility (Transco) This is a regulated entity which owns, and may construct and maintain, wires used to transmit wholesale power. It may or may not handle the power dispatch and coordination functions. It is regulated to provide non-discriminatory connections, comparable service and cost recovery. According to EPAct, any electric utility, qualifying cogeneration facility, qualifying small power production facility, or Federal power marketing agency which owns or operates electric power transmission facilities which are used for the sale of electric energy at wholesale. See also Generation Dispatch & Control; Power Pool.

Transportation Customer - A customer who uses a utility's pipeline and distribution system but buys natural gas from a different supplier.

Trenwa - Precast concrete trench boxes designed to protect and cover underground high-voltage transmission lines, typically filled with insulating materials surrounding such cables.

TTC - SeeTotal Transfer Capability (TTC).

Turbine - A machine for generating rotary mechanical power from the energy of a stream of fluid (such as water, steam, or hot gas). Turbines convert the kinetic energy of fluids to mechanical energy through the principles of impulse and reaction, or a mixture of the two.

TX - Occasional abbreviation for transmission.

Unbundling - Disaggregating electric utility service into its basic components and offering each component separately for sale with separate rates for each component. For example, generation, transmission and distribution could be unbundled and offered as discrete services.

UCAP - See Unconstrained Capacity, under Capacity.

Uniform System of Accounts - Prescribed financial rules and regulations established by the Federal Energy Regulatory Commission for utilities subject to its jurisdiction under the authority granted by the Federal Power Act.

Unit Commitment - The process of determining which generators should be operated each day to meet the daily demand of the system.

Unit - More than one class of securities traded together on the exchanges. For example, one common stock and one warrant can be traded together as a unit.

Unit Seriotum - To start or operate generators, transmission lines, or other components in a pre-determined order of succession

Universal Service - Electric service sufficient for basic needs (an evolving bundle of basic services) available to virtually all members of the population regardless of income.

Uplift - British term now adopted in the US; a charge to adjust for differences between forecasted an actual demand and to cover costs for additional ancillary services needed to cope with that difference. This term is also applied to extra charges for wholesale power or capacity (which may flow through to retail pricing) provided by local generators maintained or run to provide reserves for reliability and/or voltage support.

Useful Thermal Output - The thermal energy made available for use in any industrial or commercial process, or used in any heating or cooling application, i.e., total thermal energy made available for processes and applications other than electrical generation.

Utility - A regulated entity which exhibits the characteristics of a natural monopoly. For the purposes of electric industry restructuring, "utility" refers to the regulated, vertically-integrated electric company. Transmission utility refers to the regulated owner/operator of the transmission system only. Distribution utility refers to the regulated owner/operator of the distribution system which serves retail customers.

Utility-Earned Incentives Costs in the form of incentives paid to the utility for achievement in consumer participation in DSM programs. These financial incentives are intended to influence the utility's consideration of DSM as a resource option by addressing cost recovery, lost revenue, and profitability.

Value-at-risk (VAR) - Analytical method for assessing how much of an asset could be impacted by a sudden change in energy pricing or availability. While useful when dealing primarily with financial instruments and transactions, energy marketers have found that this method is not as effective when handling physical transactions. A competing concept called "profit-at-risk" (PAR) has been gaining favor to handle volatility in that arena.

Value-driven Aggregator - An aggregator created to arrange supplies of electricity and related services from supplies in a manner consistent with a set of values, particularly including non-price criteria. The aggregator can be a co-op, a municipality administering a competitive franchise, or a community access entity.

Vanilla - A standard or common contractual arrangement; opposite of Exotic.

VAR - Volt-ampere reactive: a technical term for describing one aspect of power as it is transmitted.

Variable Prices - Prices that vary frequently. Prices that are not stable. See Stable Prices.

Vega - The sensitivity of an options value to a change of volatility.

Vertical Integration - An arrangement whereby the same company owns all the different aspects of making, selling, and delivering a product or service. In the electric industry, it refers to the historically common arrangement whereby a utility would own its own generating plants, transmission system, and distribution lines to provide all aspects of electric service.

Volatility - While often used generically to describe the degree of variation in pricing of a commodity, this term also has a specific mathematical definition (often abbreviated with the Greek symbol for sigma) defined as the standard deviation of a price during a defined time period (typically several months or a year).

Volatility Index - The standard deviation of hourly power prices on a monthly basis.

Volatility Smile - A type of price curve occurring when high prices drop and then rapidly rise again.

Voltage Collapse - An event that occurs when an electric system does not have adequate reactive support to maintain voltage stability. Voltage Collapse may result in outage of system elements and may include interruption in service to customers.

Voltage Control - The control of transmission voltage through adjustments in generator reactive output and transformer taps, and by switching capacitors and inductors on the transmission and distribution systems.

Voltage Limits:

Normal Voltage Limits - The operating voltage range on the interconnected systems that is acceptable on a sustained basis.

Emergency Voltage Limits - The operating voltage range on the interconnected systems that is acceptable for the time sufficient for system adjustments to be made following a facility outage or system disturbance.

Voltage Reduction - Any intentional reduction of system voltage by 3 percent or greater for reasons of maintaining the continuity of service of the bulk electric power supply system.

Voltage Stability - The condition of an electric system in which the sustained voltage level is controllable and within predetermined limits.

Volumetric Wires Charge - A type of charge for using the transmission and/or distribution system that is based on the volume of electricity that is transmitted.

Warrants - Type of security usually issued together with a bond or preferred stock, that entitles the holder to buy a proportionate amount of common stock at a specified price, usually higher than the market price at the time of issuance, for a period of time. Warrants are freely transferable and are traded on major exchanges.

Wash -See Round Trip.

WATSCO - The Western Association for Transmission System Coordination.

Watt-hour (Wh) - An electrical energy unit of measure equal to 1watt of power supplied to, or taken from, an electric circuit steadily for 1 hour.

Watts – The basic unit of electrical demand or power, equal to the rate of energy transfer equal to one ampere flowing due to an electrical force, or pressure, of one volt at unity power factor.

Weather Derivative - A financial arrangement based on defined climatic conditions, such as dry bulb temperature or precipitation; used mainly to control volume risk; some have referred to such arrangements as “weather insurance.

Wellhead - Point at which natural gas is withdrawn from the ground.

Wet Barrel - An actual barrel of product already physically in storage at the time of a given transaction; as opposed to a "paper barrel" which appears only as a credit in an accountant s ledger in oil markets.

Wheeling - The transmission of electricity by an entity that does not own or directly use the power it is transmitting. Wholesale wheeling is used to indicate bulk transactions in the wholesale market, whereas retail wheeling allows power producers direct access to retail customers. This term is often used colloquially as meaning transmission.

Wholesale Competition - A system whereby a distributor of power would have the option to buy its power from a variety of power producers, and the power producers would be able to compete to sell their power to a variety of distribution companies.

Wholesale Customer - Any entity eligible under FERC (and some state) regulations to receive power directly from producers for redistribution to retail customers.

Wholesale Power Market - The purchase and sale of electricity from generators to resellers (who sell to retail customers) along with the ancillary services needed to maintain reliability and power quality at the transmission level.Wholesale Sales Energy supplied to other electric utilities, cooperatives, municipals, and Federal and State electric agencies for resale to ultimate consumers.

Wholesale Transmission Services - The transmission of electric energy sold, or to be sold, at wholesale in interstate commerce (from EPAct).

Wire House - A brokerage operating a private "wire" to its own branch offices or to other firms. See also Commission House.

Wires and Pipes - A way to refer to a utility that only distributes power and gas

Wires Charge - A broad term which refers to charges levied on power suppliers or their customers for the use of the transmission or distribution wires.

Wiresco - Another name for a transco/disco, or disco; a utility devoid of generation

Writer - The seller of an option. Also known as the grantor of an option.

WRTA - The Western Regional Transmission Association, an RTG.

WSCC (The Western System Coordinating Council) - A voluntary industry association created to enhance reliability among western utilities.

WSSP (The Western Systems Power Pool) - A FERC-approved industry institution that provides a forum for short-term trades in electric energy, capacity, exchanges and transmission services. The pool consists of approximately 50 members and serves 22 states, a Canadian province and 60 million people. The WSSP is headquartered in Phoenix, Arizona.

Zonal Pricing - Varying wholesale electric rates by Zones.

Zones - Subsets of a utility's overall territory based on geographical grouping of Nodes.

Glossary of Energy Market Terms S-Z

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