Energy-Related Terms

Bull Market: A market characterized by rising prices.

Buying Hedge: A hedge that is initiated by taking a long position in the futures market equal to the amount of the cash commodity which eventually needed.

Chart: Futures prices plotted in a way that the chartist believes gives insight into futures price movements. Several futures markets are regularly influenced by buying or selling based on traders’ price chart indications.

Liquidation: The closing out of a previous position by taking an opposite position in the same contract.

Margin Call: A demand by a broker for additional funds sufficient to raise your deposit on a commodity futures contract above the minimum acceptable level.

New York Mercantile Exchange (NYMEX): Founded in 1872 as a market for cheese, butter, eggs, its principle commodities today include heating oil and petroleum products.

Settlement Price: The price at which the clearing house clears all transactions at the close of the day.

Short: A trader who has sold futures, speculating that prices will decline.

Speculation: Buying or selling in hopes of making a profit.

Volume: The number of purchases and sales of a commodity made during a specified period of time.

Regulatory Terms

Ancillary Services: Charges for the services required to support and maintain reliable operations of the electric grid. These charges are based on federally-regulated tariffs and can include such items as scheduling service, voltage control, black start charge, expansion integration, regulation service, operating service, etc.

Capacity (unforced: UCAP or installed: ICAP): Capacity is a requirement of the ISOs/RTOs in several electricity markets. These changes help guarantee that there will be sufficient generation to meet the maximum energy requirements of the market at all times. The costs associated with these payments are passed through to consumers either by their utility or their retail electric provider. For more information on capacity, please refer to the About Capacity Charges sheet in your welcome kit.

Congestion: An ISO/RTO charge that is brought about by the limitations of the transmission system. When available low-cost supply cannot be delivered to the demand location due to transmission limitations, higher-cost generation closer to the load must be used to meet the demand. The costs associated with more expensive generation are translated into congestion costs from ISIO/RTO.

Emergency Interruptible Load Service (EILS): This charge covers the costs associated with the Electric Reliability Council of Texas’ (ERCOT’s) selection and procurement of qualified loads to be available for interruption in an electric grid emergency.

Energy Efficiency Fund: This fee funds state-mandated energy efficiency initiatives.

Revenue Neutrality Uplift (RNU) Charges: A tariff specific to the Midwest Independent System Operator (MISO) that helps guarantee revenue neutrality for the ISO at the end of the month. This can either be a charge or a credit for customers.

Gross Receipts Tax (GRT): a tax mandated by certain states that is imposed on the total of all billed charges. The percentage of this tax can vary within the state by region/municipality/city therefore the rate that you are charged will be based on the address(es)/location(s) of your metered service.

Independent System Operator (ISO) Administrative Fee or Grid Management Fee: This fee funds the operations of the ISO in your service area. An ISO operates the interstate power system and coordinates statewide supply

Losses: This regulated utility charge compensates for electricity losses that occur between the point of generation and the delivery to your business. It is based on information provided by your utility and independent system operator (ISO).

Network Integration Transmission Service (NITS) or Network Transmission: Transmission charges or the cost required to move power from one generator to your local distribution company. This is a regulated charge that can either be billed by your supplier or by your local utility depending on your state/product.

Renewable Portfolio Standards (RPS): If your state mandates participation in a renewable energy program, your supplier is required to procure a portion of your power from renewable sources. RPS obligations are common in most states and many suppliers pass the charges associated with RPS compliance on to customers either as a separate charge or as part of an all-inclusive rate.

Resource Adequacy (RA): The costs associated with California’s mandatory planning and procurement process that ensures that adequate resources are available to serve all customers in real time. This is a mandatory charge for both electric service providers and utilities.

Revenue Sufficiency Guarantee (RSG) Charges: A tariff fee specific to the Midwest Independent System Operator (MISO) that compensated generators who are called upon in real time (those not scheduled as a part of the day –ahead market) for their start-up costs.