Business and Regulation

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Single buyer with competitive generation electric market model

Under the single-buyer electric market model, the utility company creates a supply purchasing group whose job is to competitively procure supply …

Stranded costs

A stranded cost refers to the amount invested in an asset that exceeds the market value of that asset.

Supply-side competition

Supply-side competition refers to competition between providers of a commodity. In natural gas markets it refers to competition between gas prod …

Tariff

Tariffs are public documents, written by regulated entities and approved by the regulatory commission, that detail a utility’s rates, rules, s …

Test year

A test year is the 12-month period used in a rate case to determine a utility’s cost of service to be included in future rates.

Therm

A therm is a natural gas unit equal to 100,000 Btu.

Time-of-use rate

Time-of-use rates change the price of electricity according to the time of day in which it is consumed.

Trading arrangements

Trading arrangements define how business transactions are performed to allow energy, reserves, and other ancillary services to be acquired by ma …

Transmission company

Transmission companies, or transcos, are independent owners of transmission facilities. They are commonly investor-owned, and like IOUs operate …

Transmission outage

Transmission outages can be caused by a variety of reasons: weather events, lightning, fires, vandalism, terrorism, failure of substation or cir …

Transmission owner (TO)

In markets where the system operations function has been moved to an Independent System Operator (ISO), the term transmission owner, or TO, is u …

Transmission rights

Transmission rights are used by generators and/or marketers to ensure delivery of power to a point of sale.

Transmission System Operator

A transmission system operator (TSO) is a stand-alone natural gas or electric transmission company that owns transmission facilities and provide …

Unbundled service

Unbundled service happens when the distribution company provides the delivery service but another entity such as a marketer or aggregator provid …

Utility distribution company (UDC)

A utility distribution company (UDC) is an electric utility that provides distribution services.

Utility regulation

Utility regulation exists to ensure that customers of utilities and other service providers using the utility system are protected from a lack o …

Value at Risk (VAR)

Value at Risk, commonly called VAR, is a tool used to measure financial risk. VAR can be described as an estimate for a portfolio’s potential …

Vertically integrated monopoly utility electric market model

Under the vertically integrated monopoly utility model, generation, transmission, distribution, retail sales, and system operations functions an …

Wholesale electric pricing

Generally speaking, market-based prices are determined by market perceptions of the supply/demand balance. Wholesale electricity prices are usua …

Wholesale/industrial competition electric market model

Under the wholesale/industrial competition model, the utility remains responsible for providing supply to residential and small commercial custo …