Glossary - Fact Book

The following list provides definitions of selected terms that are commonly used in the electricity generating industry.

Base-load plant. A power plant built to operate around the clock. Such plants typically have low operating costs and high capital costs. Coal and nuclear-fueled plants are typical base-load plants.\

British Thermal Unit (Btu). A Btu is equivalent to 252 calories and serves as the base unit for measuring the heat content of a fuel source.

Capacity. The capability to generate electrical power, typically expressed in megawatts (MW).

Congestion. Describes a situation where power cannot be moved from where it is being produced to where it is needed for use because the transmission system does not have sufficient capability to carry the electricity.

Conservation. A conscious choice that a person makes to change behavior solely to use less energy (or other resources).

Demand. The amount of power that must be supplied to a customer (i.e., a load).

Demand response. Refers to shifting demand for electricity to non-peak periods or reducing electricity use during periods of peak demand.

Distributed generation. Generating resources located close to or on the same site as the facility using the power.

Distribution. The process of delivering electricity received from transmission providers to local customers.

Electric company. The company that delivers electricity to a customer’s home or business through its system of poles, power lines, and other equipment.

Electric Cooperative. An electric company that is owned by, and operated for the benefit of, those using the system.

Electricity supplier. An entity that sells electricity to customers (and, in Maryland, is licensed to do so by PSC).

Energy efficiency. Finding ways to accomplish the same amount of work using less energy.

Energy use. A measure of electrical power used over a period of time, usually expressed in kilowatt- hours or megawatt-hours.

Federal Energy Regulatory Commission (FERC). An independent commission responsible for regulating wholesale electric power transactions and interstate transmission and sale of natural gas for resale. FERC is the federal counterpart to state utility regulatory commissions.

Generation. The process of producing electrical energy.

Independent Power Producers. Private companies that develop, own, or operate electric power plants.

Investor-owned utility. A for-profit, tax-paying business.

Load. Kilowatt or megawatt demand placed on the electric system by consumers of power.

Locational Marginal Price (LMP). Electricity prices that vary by time and geographic location. Two separate PJM markets exist for the daily buying and selling of electricity. These are the Day-Ahead Market and the Real-Time Market. These markets operate on the basis of LMPs.

Maryland Public Service Commission. Government agency that regulates public utilities and certain passenger transportation companies doing business in Maryland, including gas, electric, telecommunications, water, sewage disposal, passenger motor vehicle, railroad, and taxicab companies.

Municipal utility. An electric company owned and operated by a municipality serving residential, commercial, and/or industrial customers usually within the boundaries of the municipality.

Peak demand. The maximum demand on an electric system in a designated period of time (e.g., over a year, a month, or a season).

Peaking plants. Power plants that operate for a relatively small number of hours, usually during peak demand periods. Such plants usually have high operating costs and low capital costs.

Power Plant Research Program (PPRP). A subdivision of the Maryland Department of Natural Resource, the PPRP functions to ensure that Maryland meets its electricity demands at reasonable costs while protecting the State’s valuable natural resources. It provides a continuing program for evaluating electric generation issues and recommending responsible, long-term solutions.

Regional Transmission Organization (RTO). An RTO controls, operates, and may independently own the transmission facilities historically held by a region’s vertically integrated public and private utilities. An RTO is an organization independent of the transmission facility owners. The RTO operates the high-voltage transmission grid to provide non-discriminatory access to the grid so that the lowest-priced wholesale power can be delivered to wholesale customers (e.g., load serving entities), while the owners still market and sell power. In Maryland PJM is the RTO.

Reliability councils. Regional organizations formed by the electric utilities to coordinate utilities’ generation and transmission systems and monitor the availability of electric services.

Renewable energy. Sources of energy that are continually being replaced such as energy from the sun (solar), wind, geothermal, and hydroelectric.

Renewable Energy Portfolio Standard. Requiring that a portion of electricity supply comes from renewable resources.

Retail competition. Permitting end-use customers to contract directly with suppliers for their electric or gas service, while transmission and distribution companies provide for delivery of the service.

Reserve margin. Total system generating capacity minus annual system peak demand, divided by the annual system peak demand, expressed as a percent.

Self-generator. A generating facility that consumes most or all of the electricity it produces to meet on-site power demand.

Standard offer service (SOS). Electricity service that is provided to customers who do not choose an electricity supplier. Maryland’s SOS service is based on competitive wholesale market rates.

Time of use rates. A utility rate structure that charges higher rates during peak hours of the day in an effort to shift peak period demand to off-peak hours.

Transmission. The process of delivering electricity from generation plants to entities that serve loads.

Volt. A unit of electrical pressure. 1kV = 1000 volts.

Watt. The electrical unit of power or rate of doing work. 1kW = 1000W. 1MW = 1,000,000 watts.

Watt-hour. An electric energy unit of measure that is equal to 1 watt of power supplied or taken steadily from an electric circuit for 1 hour.

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