Alternative Compliance Payment (ACP)âUtilities that have to comply withÂ RPSÂ requirements but findÂ SRECs to be scarce or unavailable can provide an alternative payment (i.e. $300/MWh)
AFVâAlternative Fuel Vehicle
BiofuelsâAlcohols, ethers, esters, and other chemicals made from raw biological material such as herbaceous and woody plants, agricultural and forestry residues, and a large portion of municipal solid and industrial waste.
BiomassâOrganic waste from agricultural, livestock, and lumber industry products, dead trees, foliage, etc., and is considered a renewable energy source. Biomass can be used as fuel and is most often burned to create steam that powers steam turbine generators. It is also used to make transportation fuels like ethanol and biodiesel, and chemicals like pyrolysis oil that can be burned like oil to produce energy.
Bottleneck FacilityâA point on the electric system, such as a transmission line, through which all electricity must pass to get to its intended buyers. If there is limited capacity at this point, some priorities must be developed to decide whose power gets through. It also must be decided if the owner of the bottleneck may, or must, build additional facilities to relieve the constraint.
BtuâBritish thermal unit; the amount of heat required to raise the temperature of one pound of water one degree Fahrenheit under stated conditions of pressure and temperature (equal to 252 calories, 778 foot-pounds, 1,005 joules and 0.293 watthours). It is the U.S. customary unit of measuring the quality of heat, such as the heat content of fuel.
Bulk Power SupplyâOften this term is used interchangeably with wholesale power supply. In broader terms, it refers to the aggregate of electric generating plants, transmission lines, and related-equipment. The term may refer to those facilities within one electric utility, or within a group of utilities in which the transmission lines are interconnected.
C-BEDÂ (Community-Based Energy Development)âC-BEDÂ works toward renewable energy development in a way that optimizes local economic development and environmental benefits.
cfâcubic foot; the U.S. customary 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. One cubic foot of natural gas equals 1,000 British thermal units under standard conditions of atmosphere (one) and temperature (60 degrees Fahrenheit).
CIPâConservation Improvement Program
COÂ 2Â âCarbon Dioxide
Cogenerationâ(also Combined Heat and Power) Production of electricity from steam, heat, or other forms of energy produced as a by-product of another process.
Combined CycleâAn electric generating technology in which electricity and process steam is produced from otherwise lost waste heat exiting from one or more combustion turbines. The exiting heat is routed to a conventional boiler or to a heat recovery steam generator for use by a steam turbine in the production of electricity. This process increases the efficiency of the electric generating unit.
Commodity PriceâThe portion of a natural gas sales or transportation rate based upon the volume actually shipped or used.
Control AreaâAn electric system bounded by transmission lines that are equipped with metering and telemetry equipment to track and report power flows with adjacent control areas. A control center for each control area controls the operation of generation within its portion of the transmission grid, schedules interchanges with other control areas, and helps to stabilize the frequency of alternating current in the interconnection. Control centers are currently operated by individual utilities, power pools,Â ISOs orÂ RTOs.
Cooperative electric association or utilityâutility owned and operated by its members.
DemandâThe rate at which electric energy is delivered to or by a system or part of a system, generally expressed in kilowatts (kW), megawatts (MW), or gigawatts (GW), at a given instant or averaged over any designated interval of time. Demand should not be confused with Load or Energy.
Demand ChargeâA fee based on the peak amount of electricity used during the billing cycle.
Department orÂ DOCâthe Minnesota Department of Commerce.
DeregulationâThe elimination or restructuring of regulation from a previously regulated industry or sector of an industry.
Distributed Generation (DG)â (Also called distributed energy resources, distributed power, distributed energy, distributed generation, on-site generation) Both electric demand reduction (energy conservation, load management, etc.) and supply generated at or near where the power is used. A distributed generation system involves amounts of generation located on a utilityâs distribution system for the purpose of meeting local (substation level) peak loads and/or displacing the need to build additional (or upgrade) local distribution lines.
DistributionâThe delivery of electricity to the retail customerâs home or business through low voltage distribution lines.
DSMÂ (Demand Side Management)âPrograms to influence the amount or timing of customersâ energy use.
DOEâU.S. Department of Energy.
Economies of ScaleâEconomies of scale exist where the industry exhibits decreasing average long run costs with increases in size.
EEREâEnergy Efficiency & Renewable Energy, U.S. Department of Energy
EIAâThe United States Department of Energyâs Energy Information Administration.
Electric EnergyâThe generation or use of electric power by a device over a period of time, expressed in kilowatt-hours (kWh), megawatt-hours (MWh), or gigawatt-hours (GWh).
Electric System LossesâTotal electric energy losses in the electric system. Losses are primarily due to electric resistance within transmission system lines and transformers.
Eminent DomainâThe process by which rights to land needed for public interest facilities is acquired regardless of objection by the landowner. Eminent domain is generally applied by or through the power of the relevant siting authority that found the facilities to be in the public interest.
Energy ConservationâUsing less energy, either by greater energy efficiency or by decreasing the types of applications requiring electricity or natural gas to operate.
Energy EfficiencyâUsing less energy (electricity and/or natural gas) to perform the same function at the same level of quality. Programs designed to use energy more efficiently â doing the same with less. For the purpose of this paper, energy efficiency is distinguished fromÂ DSMÂ programs in that the latter are utility sponsored and financed, while the former is a broader term not limited to any particular sponsor or funding source.
EPAâU.S. Environmental Protection Agency.
EPBBÂ (Expected Performance-Based Buy-Down)âAnÂ EPBBÂ is a type of up-front incentive based on an estimate of your solar systemâs expected performance. The performance estimate is based on system size, geographic location, orientation at time of application. TheÂ EPBBÂ incentive is offered only to systems smaller than 30 kW AC in California, under the California Solar Initiative.
Federal Energy Regulatory Commission (FERC)âThe 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.FERCÂ is the federal counterpart to state utility regulatory commissions.
Gigawatt-hour (GWh)âThe unit of energy equal to that expended in one hour at a rate of one billion watts. One GWh equals 1,000 megawatt-hours.
Greenhouse gasesâGreenhouse gases are water vapor, carbon dioxide, tropospheric ozone, nitrous oxide, methane, and chlorofluorocarbons (CFCs).
GridâA system of interconnected power lines and generators that is managed so that power from generators is dispatched as needed to meet the requirements of the customers connected to the grid at various points. Gridco is sometimes used to identify an independent company responsible for the operation of the grid.
Investor owned utility (IOU)âCommon term for a privately owned (shareholder owned) gas or electric utility regulated by the Minnesota Public Utilities Commission (referred to in statutes as a âpublic utilityâ).
Independent System Operator (ISO)âA neutral and independent organization with no financial interest in generating facilities that administers the operation and use of the transmission system.Â ISOs exercise final authority over the dispatch of electricity from generators to customers to preserve reliability and facilitate efficiency, ensure non-discriminatory access, administer transmission tariffs, ensure the availability of ancillary services, and provide information about the status of the transmission system and available transmission capacity. AnÂ ISOÂ may make some transmission investment decisions.
Interconnected SystemâA system consisting of two or more individual electric systems that have connecting tie lines and whose operations are synchronized.
InterconnectionâWhen capitalized, any one of the five major electric system networks in North America: Eastern, Western,ERCOTÂ (Texas), Quebec, and Alaska. When not capitalized, the facilities that connect two systems or control areas. Additionally, an interconnection refers to the facilities that connect a nonutility generator to a control area or system.
IRPâIntegrated Resource Planning.
Investment Tax Credit (ITC)âThe federalÂ ITCÂ is a 30% tax credit for installing a solar system in your home. You can apply this credit to your tax bill in the following spring.
KVâA kilovolt equals 1,000 volts.
Kilowatt (kW)âThis is a measure of demand for power. The rate at which electricity is used during a defined period (usually metered over 15-minute intervals). Utility customers generally are billed on a monthly basis; therefore, the kW demand for a given month would be the 15- minute period in which the most power is consumed. Customers may be charged a fee (demand charge) based on the peak amount of electricity used during the billing cycle. (Residential customers are generally not levied a demand charge.)
Kilowatt-hour (kWh)âThis is a measure of consumption. It is the amount of electricity that is used over some period of time, typically a one-month period for billing purposes. Customers are charged a rate per kWh of electricity used.
LoadâAn end use device or customer that receives power from an energy delivery system. Load should not be confused with Demand, which is the measure of power that a load receives or requires. See Demand.
Load Center or Load PocketâA geographical area where large amounts of power are drawn by end-users.
Local Distribution Company (LDC)âCommon term for a privately-owned natural gas utility that provides retail natural gas services to end use customers and is usually regulated by theÂ PUC.
Long Range PlanningâThe process of forecasting long term loads, determining a reasonable set of potential resources to meet these loads (including reduction of loads through energy efficiency), analyzing the costs (sometimes including externality costs) of several possible mixes of such resources, and identifying the resources to be secured to meet such future needs.
Mcfâone thousand cubic feet; a unit of measure of gas volumes.
Minnesota Public Utilities Commission (Commission orÂ PUC)âthe state agency with regulatory jurisdiction over certain Minnesota utilities.
MISOâMidwest Independent System Operator.
MAPPâMid-Continent Area Power Pool.
MVAâA megavolt-ampere equals 1,000 kVA.
Megawatt (MW)âA megawatt equals 1,000 kilowatts or 1 million watts.
Megawatt-hour (MWh)âThe unit of energy equal to that expended in one hour at a rate of one million watts. One MWh equals 3,414,000 Btus.
MonopolyâThe only seller with control over market sales.
Natural MonopolyâA situation where one firm can produce a given level of output at a lower total cost than can any combination of multiple firms. Natural monopolies occur in industries that exhibit decreasing average long run costs due to size (economies of scale). According to economic theory, a public monopoly governed by regulation is justified when an industry exhibits natural monopoly characteristics.
NEGÂ andÂ NEMâNet Energy Generation and Net Energy Metering; When producing electricity,Â NEGÂ is the total electricity you produce minus the electricity you use from the grid.Â NEMÂ means that the electricity you do generate will feed into the grid and earn you credits against the electricity you do pull from the grid. Your utility bill will then reflect only the net energy youâve pulled from the utility.
NERCâThe North American Electric Reliability Council is the coordinating arm of the nine member regional reliability councils. (See also Reliability Councils).
NOÂ xÂ âNitrogen Oxides
Obligation to ServeâThe obligation of a utility to provide nondiscriminatory electric service to any customer who seeks that service, and is willing to pay the rates set for that service. By law, utilities have the obligation to serve in return for exclusive service territories.
Property Assessed Clean Energy (PACE)âCities are beginning to offerÂ PACEÂ programs which provides a loan for your solar panels. The program pays for the panels and you pay for the solar system on your property tax bill, over approximately 20 years, with interest.Â PACEÂ provides loans for the cost of the panels, before the federalÂ ITCÂ is rewarded â this means that you will need to make payments on a larger, pre-ITCÂ loan.
Parallel Path FlowâAs defined byÂ NERC, this refers to the actual flow of electric power on an electric systemâs transmission facilities resulting from scheduled electric power transfers between two other electric systems. (Electric power flows on all interconnected parallel paths in amounts inversely proportional to each pathâs resistance.) Contract transmission paths, the electricity contracted for between sellers and buyers, do not define the way electricity actually flows.
Peak Load or Peak DemandâThe electric load that corresponds to a maximum level of electric demand within a specified time period, usually a year.
Performance Based Incentive (PBI)âA payment or rebate paid based on actual energy production, compared to aÂ UFI, on a $/kWh basis. AÂ PBIÂ benefits those with larger solar power systems.
Performance Based Regulation (PBR)âAny rate setting mechanism that attempts to link rewards (generally profits) to desired results or targets.Â PBRÂ sets rates, or components of rates, for a period of time based on external indices rather than a utilityâs cost of service. Other definitions include light-handed regulation that is less costly and less subject to debate and litigation. A form of rate regulation that provides utilities with incentives to reduce their costs.
Power AuthoritiesâQuasi governmental agencies that perform all or some of the functions of a public utility.
Power Purchase Agreement (PPA)âA financing option for residential solar in which a solar company owns (and installs, monitors, maintains) your solar panels; you pay for electricity. WithÂ PPAs, you avoid the high upfront costs of installing solar and pay a monthly rate that depends on how much energy your panels produce.
Power PoolâTwo or more interconnected electric systems planned and operated to supply power for their combined demand requirements.
Production Tax Credit (PTC)âThe federalÂ PTCÂ is a per-kilowatt-hour tax credit for generating electricity, for a certain period of the solar systemâs operation. Those who are less interested inÂ PTCs can apply for anÂ ITC, and vice versa.
Public GoodâA good (or a service) that will not be produced and delivered solely by the free market. Economists call these âpublic goodsâ because the public consumes them, but they do not solely benefit a single buyer or group of buyers. There is no way to produce a public good without producing a value to society at large. It is unlikely that an individual would pay out of his or her own pocket to ensure that a public good is produced because the value is not exclusively individual.
Public Interest GoalsâPublic interest goals of utility regulation include: 1) inter-and intra-class and intergenerational equity); 2) the equal treatment of equals (horizontal equity); 3) balancing long- and short-term goals that have the potential to affect intergenerational balance; 4) protecting against the abuse of monopoly power; and 5) general protection of the health and welfare of the citizens of the state, nation, and world. Environmental and other types of social costs are subsumed under the equity and health and welfare responsibilities.
Public UtilityâBy Minnesota Statute, an investor owned utility regulated by theÂ PUC. âPublic utilityâ excludes municipal utilities, cooperatives, and power marketing authorities.
PURPAâPublic Utility Regulatory Policies Act of 1978.
RDFâRefuse derived fuel, composed of processed garbage, that is used in some electric generation plants.
Real time PricingâThe instantaneous pricing of electricity based on the cost of the electricity available for use at the time the electricity is demanded by the customer.
Regional Reliability Councils (RRC)âRegional reliability councils were organized after the 1965 northeast blackout to coordinate reliability practices and avoid or minimize future outages. They are voluntary organizations of transmission owning utilities and in some cases power cooperatives, power marketers, and nonutility generatos. Membership rules vary from region to region. They are coordinated through the North American Electric Reliability Council (NERC). There are ten major regional councils plus the Alaska Systems Coordinating Council.
REISâRegional Energy Information System; the Minnesota Department of Commerceâs computerized state energy data collection and information system required under Minnesota Statutes. It includes energy data theÂ DOCÂ collects directly from energy suppliers as well as data collected by other state departments such as the Minnesota Department of Revenue, Petroleum Taxation Division. It also includes energy data specific to Minnesota collected by the U.S. Department of Energy, the U.S. Department of Commerce, Bureau of Census and the U.S. Department of Transportation.
ReliabilityâElectric system reliability has two components âadequacy and security. Adequacy is the ability of the electric system to supply the aggregate electric demand and energy requirements of the customers at all times, taking into account scheduled and unscheduled outages of system facilities. Security is the ability of the electric system to withstand sudden disturbances such as electric short circuits or unanticipated loss of system facilities. Reliability also refers to the security and availability of natural gas and petroleum supply, transportation and delivery.
Renewable Energy Certificate (REC)âAÂ RECÂ is the property right to the environmental benefits associated with generating renewable electricity. For instance, homeowners who generate solar electricity are credited with 1 solarÂ RECÂ for every MWh of electricity they produce. Utilities that have to fulfill anÂ RPSÂ requirement can purchase theseÂ RECs on the open market.
Renewable ResourcesâRenewable energy resources are naturally replenishable, but flow-limited. They are virtually inexhaustible in duration but limited in the amount of energy that is available per unit of time. Some (such as geothermal and biomass) may be stock-limited in that stocks are depleted by use, but on a time scale of decades, or perhaps centuries, they can probably be replenished. Renewable energy resources include: biomass, hydro, geothermal, solar and wind. In the future they could also include the use of ocean thermal, wave, and tidal action technologies. Utility renewable resource applications include bulk electricity generation, on-site electricity generation, distributed electricity generation, non-grid-connected generation, and demand reduction (energy efficiency) technologies.
RESÂ (Renewable Energy Standard)â(Also calledÂ RPS, Renewable Portfolio Standard). In Minnesota, the new Renewable Energy Standard that passed the House on February 20, 2007, will require 25 percent of Minnesotaâs electricity to come from renewable sources (such as wind and solar) by the year 2025. Currently, Minnesota imports more electricity from outside sources than any other state.
Research and Development (R&D)âResearch is the discovery of fundamental new knowledge. Development is the application of new knowledge to develop a potential new service or product. Basic power sector R&D is most commonly funded and conducted through the Department of Energy (DOE), its associated government laboratories, university laboratories, the Electric Power Research Institute (EPRI), and private sector companies.
Reserve MarginâCapacity over and above anticipated peak loads, maintained for the purpose of providing operational flexibility and for preserving system reliability. Reserve margins cover for planned and unplanned outages of generation and/or transmission facilities.
RestructuringâThe reconfiguration of the vertically integrated energy monopolies. Restructuring usually refers to separation of the various utility functions into individually operated and owned entities.
RPSÂ (Renewable Portfolio Standard)âSeeÂ RES, Renewable Energy Standard
RTOâA regional transmission organization designed to operate the grid and its wholesale power market over a broad region and with independence from commercial interests. AnÂ RTOÂ would also have a role in planning and investing in the grid, though how it would conduct these activities remains unresolved. AnÂ RTOÂ would also coordinate with otherÂ RTOs.