Affiliate Retail Electric Provider: A company that is directly or indirectly controlled by, or shares the same owner as, another. The Affiliate Retail Electric Provider was part of the original electric company that generated and sold electricity in your area before deregulation. Now, the Affiliate Retail Electric Provider only sells electricity and provides customer service.

Aggregator: 1. 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. 2. No relation to a Terminator which is a robotic Cyberdyne Systems Model 101 Series 800 that traveled from the future to do away with Sarah Connor before she had a son who would one day lead the resistance against the robot's creator.

Average Payment Plan: An agreement worked out between a Retail Electric Provider and a customer that allows you to pay approximately the same amount for your electric service each month. All Retail Electric Providers are required by the PUC to offer average payment plans.

Avoided Cost: 1. 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. 2. A cost that is avoided.

Base Rates: 1. The rates utility charges to cover its non-fuel costs. 2. The rates adults are willing to pay to not hear loud music being played by teenagers in the car next to them at a traffic light.

Broker: 1. Any entity that serves as an agent or intermediary in the purchase and sale of electricity, but does not own transmission or generation. 2. When one person has less money than anyone else he is said to be "broker."

City-Owned Utility: A non-profit utility that is owned and operated by the city it serves. In Texas, city-owned utilities may opt into the competitive retail electric marketplace. See also "Municipally Owned Utility."

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.

Commercial Customer: One of three commonly used designations for classes of customers. The others are residential and industrial. Commercial customers are not involved in manufacturing. Examples of commercial customers are retail stores, restaurants and educational institutions.

Competitive Retail Electric Provider: A Retail Electric Provider that is certified by the PUC and competes for your business by offering lower prices, renewable energy options, added customer service benefits or other incentives.

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: 1. The practice of adding charges to a customer's monthly bill for services that the customer has not authorized. This is an illegal practice. 2. Waiting until a short time before a test to begin studying, and then studying like a crazy person to make up for lost time.

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.

Demand: 1. 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). 2. The invisible force that some people claim to be restricting their ability to advance in society. (pronounced "da' man".)

Deregulation: The elimination of regulation from a previously regulated industry or sector of an industry, 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.

Do Not Call List: The PUC has established two No-Call Lists for customers who do not want to receive telemarketing calls from Retail Electric Providers or other telephone marketers doing business in Texas.

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 Reliability Council of Texas (ERCOT): The corporation that administers and maintains the reliability of the state's electrical power grid. When you choose a new Retail Electric Provider, this group will send you a postcard confirming your switch from one Retail Electric Provider to another.

Electricity Facts Label: An information sheet required by the PUC that provides customers with standardized information on a Retail Electric Provider’s prices, contracts, sources of power generation and emissions. It allows customers to make an "apples-to-apples" comparison of Retail Electric Provider offers.

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.

Fuel Factor: An Affiliate Retail Electric Provider is allowed to recover its costs for the fuel used to generate electricity, such as coal, natural gas, wind, water, nuclear, etc., through the fuel factor. This cost is set by the Public Utility Commission of Texas and charged on each customer’s bill, based on kilowatt-hour (kWh) usage. An Affiliate Retail Electric Provider is prohibited from making a profit on fuel costs.

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 by a number of methods, including natural gas, coal, nuclear power, wind, water and solar 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.

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.

IPP - Independent power producer: A company that operates a generation facility and sells power to electric utilities 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.

Industrial Customer: One of three commonly used classes of customers. The others are commercial and residential. Industrial customers typically have the highest demand for electricity. Examples of industrial customers are a factory or manufacturing plant.

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.
A unit of energy equivalent to one kilowatt (kW) of power expended for one hour of time. The amount of electricity you use each billing period is expressed in terms of a kilowatt-hour, and is noted on your bill.

Local Wires Company: The company that transmits and delivers electricity to a customer’s home or business along the poles and wires (formerly a local electric utility). This company is still responsible for maintenance and repair of these poles and wires.

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 agent for generation projects who markets power on behalf of the generator.

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

Monopoly: 1. The only seller with control over market sales. 2. A board game invented by Charles Darrow, an unemployed salesman and inventor living in Germantown, Pennsylvania, who was struggling with odd jobs to support his family in the years following the great stock market crash of 1929.

Municipally Owned Utility ("Muni"): A non-profit utility that is owned and operated by the municipality it serves. In Texas, municipally owned utilities may opt into the competitive retail electric marketplace. See also "City-Owned Utility.

Natural Gas Gas issuing from the earth's crust through natural openings or bored wells; especially : a combustible mixture of methane and other hydrocarbons used chiefly as a fuel and raw material. Gas manufactured from organic matter (as coal). Natural Gas has a direct impact on electricity prices.

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 Demand: The highest 15- or 30-minute demand recorded during a 12-month period.

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: PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

Power Broker: A power broker is an entity that arranges a transaction between a buyer and a seller. The broker does not take title to the power.

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 and still recover profits on service.

Price to Beat: Residential and small commercial customers of the Affiliate Retail Electric Provider receive a standard rate offering, or "Price to Beat" set by the Public Utility Commission. This rate is designed to give customers of the Affiliate Retail Electric Provider a discount, and allow competing Retail Electric Providers the opportunity to offer lower rates. The "Price to Beat" rate includes a six-percent rate reduction, adjusted for fuel prices.

Provider of Last Resort: The Provider of Last Resort serves as the "back-up" provider when a Retail Electric Provider leaves the market for any reason. If this happens, customers may switch back to the Affiliate Retail Electric Provider or choose another competitive Retail Electric Provider offering electric service in their area.
A legal obligation (traditionally given to pre-deregulated 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.

Public Utility Commission of Texas (PUC): The state agency that is responsible for the regulation and oversight of electric and local telecommunication services in Texas. Under Electric Choice, the PUC regulates the delivery of electricity and enforces customer protections.

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. Electricity that is made from "environmentally friendly" fuel resources (sustainable energy technologies) that include solar, wind, trash-to-energy, water, methane gas from landfills, fuel cells, and biomass. Sometimes referred to as "green" energy. Information on a Retail Electric Provider’s generation sources can be found on its Electricity Facts Label.

Residential Customer: One of three commonly used customer classes. The other two are commercial and industrial. Residential customers include private households that utilize energy for such needs as heating, cooling, cooking, lighting and small appliances.

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.
The reorganization of traditional monopoly electric service to allow operations and charges to be separated or "unbundled" into generation, transmission and distribution and retail services. This allows customers to buy retail electric service from competing providers.

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 Electric Provider: A company that sells electricity to customers. All Retail Electric Providers must be certified to do business by the Public Utility Commission of Texas.

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

Rural Electric Cooperative (Co-op): A customer-owned electric utility that distributes electricity to members and that receives lower-cost financing through the federal government. In Texas, co-ops can choose to opt into the competitive retail market.