A B C D E F G H I K L M N O P Q R S T W
Allowance for Funds Used During Construction (AFUDC) – An accounting convention prescribed by the Federal Energy Regulatory Commission that represents the estimated composite interest costs of debt and a return on equity funds used to finance construction. The allowance is capitalized in the property accounts and included in income.
Ancillary Services – Services or tariff provisions related to generation and delivery of electric power other than simple generation, transmission or distribution. Ancillary services related to transmission services include: energy losses, energy imbalances, scheduling and dispatching, and system protection.
Avoided Cost – The incremental cost that a utility would incur to purchase or produce an amount of electricity or gas equivalent to that saved by a DSM measure. Components may include energy, capacity, storage, transmission and distribution. Avoided costs are generally used to represent the benefits of utility-sponsored DSM programs.
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Base-Load
– The minimum amount of electric power or natural gas delivered or required over a given period of time at a steady rate. The minimum continuous load or demand in a power system over a given period of time usually is not temperature sensitive.
Base-Load Capacity – The generating equipment normally operated to serve loads on an around-the-clock basis.
Below the Line/Above the Line – A decision that is made to determine whether an item should be included in cost of service for establishing rates (above the line) or should not be included (below the line). The "line" referred to is utility net operating income on the income statement. "Above the Line" refers to revenues collected for and costs included in providing utility service.
Bonneville Power Administration (BPA) – A federal agency serving the Pacific Northwest. BPA is the largest transmission operator in the region and markets electricity at cost from 31 federally owned dams, one nuclear plant and a large wind energy program to Northwest utilities.
British Thermal Unit (Btu) – a basic unit used to measure natural gas; the amount of natural gas needed to raise the temperature of one pound of water by one degree Fahrenheit.
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Co-generation
– The use of a single prime fuel source in a reciprocating engine or gas turbine to generate electrical and thermal energy in order to optimize the efficiency of the fuel used. The dominant demand for energy can be either electrical or thermal. Usually it is the latter with excess electrical energy, if any, being transmitted into the local power supply company’s lines (with a reciprocal situation existing when electrical demands exceed the co-generation plant’s output). A parallel exists with total energy plants, which are typically designed for the electrical demands rather than thermal. Under the 1978 Public Utility Regulatory Policies Act (PURPA), regulated utilities are required to purchase electricity furnished by co-generators and small power producers at rates set by regulatory bodies having jurisdiction over the utility receiving the electricity based on "full avoided cost."
Cubic Foot – The most common unit of measurement of gas volume. It is the amount of gas required to fill a volume of one cubic foot under stated conditions of temperature, pressure, and water vapor.
Cushion Gas – The natural gas required in a gas storage reservoir to maintain a pressure sufficient to permit recovery of stored gas.
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Degree Day, Cooling
– A measure of the need for air conditioning (cooling) based on temperature and humidity. Although cooling degree days are published for many weather stations, a specific procedure has not been generally accepted.
Degree Day, Heating – A measure of the coldness of the weather experienced, based on the extent to which the daily mean temperature falls below a reference temperature, usually 65 degrees F.
Demand Side Management (DSM) – Utility activities designed to influence the amount and timing of customer demand.
Demand Side Resource Portfolio – Comprehensive collection of DSM resources, both viable and non-viable, that are available, both currently and in the future to the utility.
Demand Side Resources – Resources obtained through the implementation of DSM that may be used as an alternative to traditional supply-side resources.
Dekatherm (dkt) – A unit of heating value of natural gas equivalent to 10 therms or 1,000,000 Btus.
Deregulation –In the energy industry, the process by which regulated markets become competitive markets, giving customers the opportunity to choose their energy supplier.
Direct Access – An arrangement in which customers can purchase electricity directly from any supplier in the competitive market, using the transmission and distribution lines of electric utilities to transport the electricity.
Distribution – The facilities of the electric system that deliver electricity from substations to customers. The distribution system “steps down” power from high-voltage transmission lines to a level that can be used in homes and businesses.
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Energy-Efficiency Program
– A DSM program aimed at reducing overall consumption, often without regard for the timing of the program-induced savings. Such savings are generally achieved by substituting technically more efficient equipment to produce the same level of end-use services with less energy.
Environmental Protection Agency (EPA) – A Federal agency charged with protecting the environment.
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Federal Energy Regulatory Commission (FERC)
– The Federal agency that has jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas transmission and related services pricing, oil pipeline rates and gas pipeline certification.
Franchise – A special privilege conferred by a unit of state or local government on an individual or corporation to occupy and use the public ways and streets for benefit to the public at large. Local distribution companies typically have exclusive franchises for utility service granted by state or local governments.
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Grid – The transportation network over which electricity moves from suppliers to customers.
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Hedging
– Any method of minimizing the risk of price change. Since the movement of cash prices is usually in the same direction and about in the same degree as the movement of the present prices of futures contracts, any loss (or gain) resulting from carrying the actual merchandise is approximately offset by a corresponding gain (or loss) when the contract is liquidated.
Hinshaw Exemption – A pipeline company (defined by the Natural Gas Act and exempted from FERC jurisdiction under the NGA) defined as a regulated company engaged in transportation in interstate commerce, or the sale in interstate commerce for resale, of natural gas received by that company from another person within or at the boundary of a state, if all the natural gas so received is ultimately consumed within such state. A Hinshaw pipeline may receive a certificate authorizing it to transport natural gas out of the state in which it is located, without giving up its status as a Hinshaw pipeline.
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Independent Systems Operator (ISO)
– An entity that has been granted the authority by multiple utilities to operate in a non-discriminatory manner all the transmission assets of a fixed geographic area.
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Kilowatt (kW)– A measure of electricity consumption equivalent to the use of 1,000 watts of power over a period of one hour. Ten 100-watt light bulbs burning for one hour would consume one kilowatt hour of electricity.
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Loss – The general term applied to energy (kilowatt hours) and power (kilowatts) lost in the operation of an electric system. Losses occur principally as energy transforms from kilowatt hours to waste heat in electrical conductors and apparatus.
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Megawatt (MW) – A unit of electrical power equal to one million watts or one thousand kilowatts.
Megawatt Hour (MWH) – One million watt-hours of electric energy. A unit of electrical energy which equals one megawatt of power used for one hour. It is the amount of electric energy required to light 10,000 10-watt bulbs.
Midcontinent Area Power Pool (MAPP) – A voluntary association of electric utilities and other electric industry participants that acts as a regional transmission group, responsible for facilitating open access of the transmission system and a generation reserve sharing pool which provides efficient and available generation to meet regional demand.
MMBtu – A thermal unit of energy equal to 1,000,000 Btus, that is, the equivalent of 1,000 cubic feet of gas having a heating content of 1,000 Btus per cubic foot, as provided by contract measurement terms (see Dekatherm).
MMcf – A million cubic feet.
Montana Consumer Counsel (MCC) – A Montana state constitution established advocate for public utility and transportation consumers, which represents them before the Public Service Commission, state and federal courts, and administrative agencies in matters concerning public utility regulation.
Montana Public Service Commission (MPSC) – The state agency that regulates public utilities doing business in Montana.
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National Transportation Safety Board (NTSB)– An independent agency reporting administratively to the Secretary of Transportation, charged with the investigation of all safety-related incidents involving transportation. These include air, rail, highway, and liquid and gas pipeline transportation. The NTSB has no power to issue regulations; however, it issues reports and recommendations.
Nebraska Public Service Commission (NPSC) – The state agency that regulates public utilities doing business in Nebraska.
North American Electric Reliability Council (NERC) – A nonprofit organization formed in 1968 by the electric utility industry to ensure reliable, adequate power supply in North America. NERC plays an important role in establishing the standards, rules, and forms of cooperation that make a major contribution to system reliability. There are several NERC regions in the country and NorthWestern Energy belongs to two of them: the Mid-Continent Area Power Pool (MAPP) and the Western Electric Coordinating Council (WECC).
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Open Access – Non-discriminatory, fully equal access to transportation or transmission services offered by a pipeline or electric utility.
Open Season – A period of time in which potential customers can bid for services, and during which such customers are treated equally regarding priority in the queue for service.
Open Transmission Access – Enables all participants in the wholesale market equal access to transmission service, as long as capacity is available, with the objective of creating a more competitive wholesale power market.
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Peak Load – A measure of the maximum amount of energy delivered at a point in time.
Power Marketer – An entity or individual who sells power that it either buys or generates on its own.
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Qualifying Facilities – Alternative generation facilities that met qualifications under the Public Utility Regulatory Policy Act (PURPA) of 1978. This law required utilities to purchase power from alternative generation facilities (wind, hydro, waste fuel, co-generation) at rates set by state public utility commissions. The rates were based on a theoretical formula that estimated the utility’s avoided cost of building a new generation facility escalated over the life of the plant. As a result, many of these power contracts are now much higher than current market prices.
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Rate Base – The investment value established by a regulatory authority upon which a utility is permitted to earn a specified rate of return. Generally, this represents the amount of property used and useful in public service and may include plant held for future use and may or may not include all or part of construction work in progress. If all or part of construction work in progress is included in rate base, there may or may not be an offset or partial offset to its return requirements due to the inclusion of an allowance for funds used during construction in net operating income. The investment included in rate base may be based on the following values or combinations thereof: fair value, prudent investment, reproduction cost, or original cost. The rate base may provide for the inclusion of working capital with positive allowances for cash working capital, materials and supplies including fuel supplies and gas stored underground, bank balances, prepayments, and deductions for expense items such as property taxes and income taxes which are expensed currently but not paid until a later date. Rate base may also be adjusted to reflect customer payments for construction, company payments for advances, accumulated deferred income tax, and accumulated deferred investment tax credits to the extent the tax laws permit rate base adjustments. (Some jurisdictions reflect accumulated deferred tax balances as reductions to rate base while other jurisdictions reflect accumulated tax balances as zero cost money in the cost of capital determination.)
Regional Transmission Organization (RTO) – An independent entity, which is established to have “functional control” over utilities’ transmission systems, in order to expedite transmission of electricity. RTO’s typically operate markets within their territories.
Reliability – The guarantee of system performance at all times and under all reasonable conditions to assure constancy, quality, adequacy and economy of electricity. It is also the assurance of a continuous supply of electricity for customers at the proper voltage and frequency.
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Securities and Exchange Commission (SEC)– The U.S. agency charged with protecting investors, maintaining fair, orderly and efficient markets and facilitating capital formation.
South Dakota Public Utilities Commission (SDPUC) – The state agency that regulates public utilities doing business in South Dakota.
Storage, Underground – The utilization of subsurface facilities for storing gas which has been transferred from its original location for the primary purposes of load balancing. The facilities are usually natural geological reservoirs such as depleted oil or gas fields or water-bearing sands sealed on the top by an impermeable cap rock. The facilities may be man-made or natural caverns.
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Tariffs– A collection of the rate schedules and service rules authorized by a federal or state commission. It lists the rates the regulated entity will charge to provide service to its customers as well as the terms and conditions that it will follow in providing service.
Therm – A unit of heating value equivalent to 100,000 British thermal units (Btu).
Test Period – In a rate case, a test period is used to determine the cost of service upon which the utility’s rates will be based. A test period consists of a base period of twelve consecutive months of recent actual operational experience, adjusted for changes in revenues and costs that are known and are measurable with reasonable accuracy at the time of the rate filing and which will typically become effective within nine months after the last month of actual data utilized in the rate filing.
Tolling Arrangement – An arrangement whereby a party moves fuel to a power generator and receives kilowatt hours (kWh) in return for a pre-established fee.
Tracker – A special provision approved by the Commission giving the utility company the ability to change its rates at different points in time to recognize changes in specific cost of service items without the usual suspension period of a rate filing.
Transition Costs – Out of market energy costs associated with the change of an industry from a regulated, bundled service to a competitive open-access service.
Transmission – Transmission or transportation is the flow of electricity from generating stations over high voltage lines to substations. The electricity then flows from the substations into a distribution network.
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Western Area Power Administration (WAPA) – A federal agency that markets and transmits hydroelectric power and related services to utilities in 15 western states.
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