Terms A-Z
Click any term to jump to its definition. Cross-references link to related concepts.
A
- Ancillary Services
- Grid support services beyond basic energy supply: frequency regulation, spinning reserves, voltage support. These keep the grid stable and are procured separately from energy.See also: RTO, Wholesale Market
- Avoided Cost
- The cost a utility would have paid to generate or purchase power from another source. Often used to value net metering credits in states without retail-rate compensation.See also: Net Metering
B
C
- Capacity
- The maximum output a generator can produce, measured in megawatts (MW). Also refers to the grid's total available generation relative to peak demand.See also: Capacity Market, Reserve Margin
- Capacity Market
- A market where generators are paid to be available to produce power when needed, separate from payments for actual energy produced. Ensures sufficient generation exists to meet future peak demand.See also: PJM, RTO
- Customer Charge
- A fixed monthly fee on your bill for account maintenance, meter reading, and billing services. Doesn't vary with usage.See also: Delivery Charges
D
- Default Service
- In deregulated markets, the electricity supply provided to customers who haven't chosen a competitive supplier. Also called 'standard offer' or 'provider of last resort' service.See also: Price to Compare, Deregulation
- Delivery Charges
- Charges for transmitting and distributing electricity to your home. Covers wires, poles, transformers, substations, and maintenance. Set by your utility and regulated by the state.See also: Distribution, Transmission
- Demand
- The rate at which electricity is consumed at a given moment, measured in kilowatts (kW). Different from energy (kWh), which accumulates over time.See also: Demand Charge, kW, kWh
- Demand Charge
- A fee based on your peak power draw (kW) during a billing period, not total consumption (kWh). Common for commercial accounts; rare for residential. Reflects infrastructure costs.See also: Demand, kW
- Deregulation
- The restructuring of electricity markets to separate generation from delivery and allow retail competition. Customers can choose their electricity supplier while the utility handles delivery.See also: Default Service, Supplier
- Distribution
- The local network of lower-voltage lines, transformers, and substations that deliver electricity from transmission lines to homes and businesses. Handled by your local utility.See also: Transmission, Utility
E
- EGS (Electric Generation Supplier)
- Pennsylvania's term for a retail electricity supplier licensed to sell generation to residential and commercial customers. Used interchangeably with 'supplier' in most contexts.See also: Supplier, Deregulation
- Energy Charge
- The portion of your bill based on kilowatt-hours consumed. Calculated as kWh used × rate per kWh. Includes both generation and delivery components.See also: kWh, Generation Charge
F
- FERC (Federal Energy Regulatory Commission)
- The federal agency that regulates interstate electricity transmission, wholesale electricity markets, and natural gas pipelines. Does not regulate retail electricity rates (that's state jurisdiction).See also: RTO, PUC
- Fixed Rate
- An electricity rate that stays constant for the duration of your contract term, regardless of wholesale market fluctuations. Provides price certainty but may be higher than variable rates during mild market conditions.See also: Variable Rate, Term
G
- Generation
- The production of electricity at power plants. In deregulated markets, generation is separate from delivery and can be purchased from competitive suppliers.See also: Supply, Delivery Charges
- Generation Charge
- The portion of your bill for producing the electricity you consumed. In deregulated markets, this is what you pay your supplier (or the utility's default service) for.See also: Supply Charge, Price to Compare
- Grid
- The interconnected network of power plants, transmission lines, distribution lines, and substations that delivers electricity from generators to consumers.See also: Transmission, Distribution
k
- kW (Kilowatt)
- A unit of power equal to 1,000 watts. Measures the rate of electricity flow at any instant. A 10 kW load draws power at 10,000 watts. Used for demand charges.See also: kWh, Demand
- kWh (Kilowatt-hour)
- A unit of energy equal to 1,000 watts used for one hour. Your bill's main usage measure. A 100-watt bulb running for 10 hours uses 1 kWh.See also: kW, Energy Charge
L
- Load
- The amount of electricity being consumed at any time. Can refer to individual customer load or total system load across a region.See also: Peak Load, Base Load
- Locational Marginal Price (LMP)
- The wholesale price of electricity at a specific location on the grid, reflecting energy cost plus transmission congestion and losses. Prices vary by location because transmission capacity is limited.See also: Wholesale Market, RTO
M
- Meter
- The device that measures electricity consumption at your service location. Modern smart meters record usage in 15-minute intervals and transmit data remotely.See also: kWh, Smart Meter
N
- Net Metering
- A billing arrangement where solar (or other distributed generation) owners receive credit for excess electricity sent to the grid. Credit value varies by state from full retail rate to avoided cost.See also: Avoided Cost, Solar
O
- Off-Peak
- Hours when electricity demand and prices are lower, typically nights and weekends. Time-of-use rates charge less during off-peak periods.See also: Peak, Time-of-Use
P
- Peak
- Hours when electricity demand and prices are highest, typically late afternoon to early evening on hot summer or cold winter days. Time-of-use rates charge more during peak periods.See also: Off-Peak, Peak Load
- Peak Load
- The maximum electricity demand during a specific period (day, month, year). The grid must be built to handle peak load, even though average load is much lower.See also: Load, Demand Charge
- PJM
- The Regional Transmission Organization that operates the wholesale electricity market and transmission system for all or parts of 13 states including Pennsylvania, New Jersey, and Ohio. Largest RTO in North America.See also: RTO, Wholesale Market
- Power Purchase Agreement (PPA)
- A contract between a generator and a buyer (utility, supplier, or large customer) for electricity at specified terms over a defined period. Used for renewable energy projects and long-term supply.See also: Generation, Supplier
- Price to Compare (PTC)
- In Pennsylvania, the utility's default generation rate — what you pay if you don't choose a supplier. Your benchmark for evaluating competitive offers. Rates below PTC save money; rates above cost more.See also: Default Service, Deregulation
R
- Rate Case
- The formal regulatory proceeding where a utility requests permission to change its rates. Involves filing cost documentation, hearings, and a commission order. Can take 6-18 months.See also: PUC, Utility
- REC (Renewable Energy Certificate)
- A tradable certificate representing the environmental attributes of 1 MWh of renewable electricity generation. Utilities and suppliers buy RECs to meet renewable energy requirements.See also: Renewable Energy
- Renewable Energy
- Electricity generated from naturally replenished sources: solar, wind, hydro, geothermal, biomass. Many states require utilities to source a percentage of supply from renewables.See also: REC, Solar
- Reserve Margin
- The amount of generation capacity above expected peak demand, expressed as a percentage. Ensures reliability if plants go offline unexpectedly. Typically 15-20%.See also: Capacity, Peak Load
- RTO (Regional Transmission Organization)
- An independent organization that operates the transmission grid and wholesale electricity markets across a region. RTOs ensure grid reliability and competitive wholesale markets. Examples: PJM, ERCOT, MISO.See also: PJM, Wholesale Market
S
- Smart Meter
- A digital meter that records electricity usage in intervals (typically 15 minutes) and transmits data remotely. Enables time-of-use rates, faster outage detection, and detailed usage tracking.See also: Meter, Time-of-Use
- Solar
- Electricity generated from sunlight via photovoltaic panels. Can be utility-scale (large solar farms) or distributed (rooftop systems). Distributed solar typically uses net metering for bill credits.See also: Net Metering, Renewable Energy
- Supplier
- In deregulated markets, a company that sells electricity generation to retail customers. You choose your supplier; your utility still handles delivery. Also called 'retail electric provider' in some states.See also: Deregulation, EGS
- Supply Charge
- Another term for generation charge — the portion of your bill for producing the electricity you used. What you pay your supplier or the utility's default service.See also: Generation Charge, Price to Compare
T
- Term
- The length of a fixed-rate electricity contract, typically expressed in months. Common terms are 6, 12, 18, or 24 months. Variable-rate plans often have no term (month-to-month).See also: Fixed Rate, Variable Rate
- Time-of-Use (TOU)
- A rate structure where electricity prices vary by time of day. Peak hours cost more than off-peak. Encourages shifting usage to lower-demand periods.See also: Peak, Off-Peak
- Transmission
- The high-voltage network that moves bulk electricity from power plants to local distribution systems. Operates at 69kV to 765kV. Regulated by FERC.See also: Distribution, Grid
U
- Utility
- The company that owns and operates the local electric distribution system. In deregulated states, handles delivery but not necessarily generation. Examples: PECO, PPL, Duquesne Light.See also: Distribution, Delivery Charges
V
- Variable Rate
- An electricity rate that can change monthly based on wholesale market prices. Typically no long-term contract. May be cheaper than fixed rates in stable markets but risky during price spikes.See also: Fixed Rate, Wholesale Market
W
Using this glossary
This glossary covers terms you'll encounter when:
- Reading your electricity bill
- Shopping for electricity suppliers
- Understanding how rates are set
- Evaluating solar and net metering
- Following electricity market news and regulatory proceedings
Terms are defined in plain language for consumers, not industry insiders. Where concepts have deeper complexity, we link to dedicated guides that explain them fully.
Frequently asked questions
What is the difference between kW and kWh?
kW (kilowatt) measures power — the rate of electricity flow at any instant. kWh (kilowatt-hour) measures energy — the total electricity consumed over time. A 1 kW device running for 1 hour uses 1 kWh. Your bill charges for kWh; demand charges (mostly commercial) are based on peak kW.
What is electricity deregulation?
Deregulation is the restructuring of electricity markets to separate generation from delivery and allow retail competition. In deregulated states, you can choose your electricity supplier while your local utility continues to handle delivery. Pennsylvania, Texas, and Ohio are examples of deregulated markets.
What is the Price to Compare?
The Price to Compare (PTC) is Pennsylvania's term for the utility's default generation rate — what you pay if you don't choose a competitive supplier. It's your benchmark for evaluating supplier offers. Supplier rates below the PTC save money on generation costs.
What is an RTO?
RTO stands for Regional Transmission Organization. RTOs are independent entities that operate the electric grid and wholesale electricity markets across large regions. They ensure grid reliability, facilitate wholesale trading, and coordinate transmission planning. PJM, ERCOT, and MISO are major RTOs.
What is net metering?
Net metering is a billing arrangement where solar panel owners receive credit for excess electricity sent to the grid. When your panels produce more than you use, the excess flows to the grid and you earn credits to offset future consumption. Credit values vary by state from full retail rate to lower avoided-cost rates.
