Glossary of Northwest Electric Industry Terms
access charge: A fee levied for access to a utility’s transmission or distribution system. It is a charge for the right to send electricity over another’s wires and is not typically tied to the actual amount of power shipped.
acre-feet: The amount of water it takes to cover one acre to a depth of one foot, equivalent to 1,233 cubic meters, or 325,851 gallons. This measure is used to describe the quantity of storage in a reservoir or hydro system. River flows are normally spoken of in terms of millions of acre-feet (MAF).
administrator: The title of the chief officer of the Bonneville Power Administration (BPA).
alternating current (AC): An electric current that reverses direction of flow at regular intervals and has alternately positive and negative values.
ampere (“amp”): A unit of measurement of electric current, equal to one coulomb (6.241 × 1018 electrons) per second. See “watt.”
anadromous fish: Fish (including most salmon) that hatch in freshwater, migrate to the ocean, mature there, and return to freshwater to spawn. See also “resident fish.”
ancillary and control area services (ACS): The power support services provided by a transmission operator to ensure reliability of the transmission system. They include reactive power, frequency control, balancing reserves, and operating reserves.
automatic generation control (AGC): Regulation of the power output of electric generators within a Balancing Authority Area in response to changes in load, system frequency, and other factors, in order to maintain the scheduled system load and interchanges with other Balancing Authority Areas.
available transmission capability (ATC): The amount of unused capacity available on the transmission system for sale to third parties.
average megawatt (aMW) or average annual megawatt (aMW): The amount of energy consumed by a one megawatt load served 24 hours a day for one year – equal to 8,760 megawatt-hours. See also “megawatt.”
average system cost (ASC): The cost of a utility’s generation and transmission system. Under the Residential Exchange provisions of the Northwest Power Act, a utility may sell power to BPA at the utility’s average system cost and purchase the same amount of power back from BPA at a rate based on the costs of the Federal Base System. See “residential exchange.”
avoided cost: A guideline for comparing the value of conservation and renewable resources with other resources. Literally, the cost a utility avoids by purchasing a conservation or renewable resource from a “qualifying facility” under the Public Utility Regulatory Policies Act of 1978 versus generating the power itself.
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balancing authority area (BAA): (Previously known as a Control Area.) A transmission system bounded by metering points, in which one entity (the Balancing Authority) is responsible for maintaining the reliable operation of the transmission system.
balancing reserves: Generation held ready by a Balancing Authority that can be quickly increased or decreased in order to compensate for normal load and generation fluctuations within a Balancing Authority Area, in order to maintain constant balance between generation and load. The capability of such generation to quickly increase output is referred to as “inc”capacity reserve, and the capability of such generation to quickly decrease output is referred to as “dec” capacity reserve; both are measured in megawatts.
baseload: A power plant that is planned to run continually except for maintenance and scheduled or unscheduled outages. Baseload also refers to the minimum load in a power system over a given period of time.
bilateral contract: A direct contract between a power producer and an end user outside a centralized power pool.
billing credit: BPA payments to its utility customers (either in the form of cash or offsets against billing) for actions taken to reduce BPA’s obligation to acquire new resources under the provisions of the Power Planning Act. Customer actions may include the development of independent conservation programs or new generation resources.
biological opinion (“BiOp”): Under the Endangered Species Act, federal agencies proposing to take action that may adversely affect a listed species must consult with the relevant federal fish and wildlife agency (in the case of salmon, the National Marine Fisheries Service) to ensure that the proposed action will not jeopardize the continued existence of the species or harm its critical habitat. As part of the consultation process, the Fisheries Service must issue a “biological opinion” detailing how the proposed action would affect the species.
blackout: The disconnection of a generating resource serving an area brought about by an emergency forced outage or other fault in the generation, transmission or distribution system. The technical term is “circuit interruption.” Blackouts are normally considered involuntary events. See also “brownout.”
Bonneville Power Administration (BPA): The Federal power marketing agency under the Department of Energy responsible for marketing wholesale electric power from 31 Federal dams and one nuclear plant throughout Washington, Oregon, Idaho, and western Montana and portions of California, Nevada, Utah, and Wyoming. BPA also sells and exchanges power with utilities in Canada and California, and operates a transmission system containing over 15,000 miles of high-voltage transmission lines.
British thermal unit (BTU): The amount of heat energy necessary to raise the temperature of one pound of water one degree Fahrenheit at sea level. A Btu is used as a common measure of heating value for different fuels. For example, one cubic foot of natural gas is roughly 1,000 Btus. MM Btu means a million Btus, or one decatherm.
brownout: An intentional reduction of energy loads in an area by the partial reduction of electrical voltages. A brownout results in the dimming of lights and slowing of motor-driven devices.
busbar: A conductor or group of conductors that serves as a common connection for two or more circuits; the power conduit of an electric power plant; the starting point of the electric transmission system.
bypass system: Structure in a dam that routes fish around rather than through the turbines.
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California-Oregon Border (COB): A location in Oregon just north of the California border adjacent to BPA’s and PG&E’s Balancing Authority Area interconnection. Two major substations, Captain Jack and Malin, are located here along with several 500 kV interties. Used as hub for sales of power in both directions and as the delivery point for a NYMEX electric futures contract.
capability: The maximum load a generator unit, substation or other electric apparatus can carry under specified, standardized conditions (as set out, for example, by the manufacturer) for a given time interval without exceeding approved limits of temperature and stress. Also referred to as the “rating,” or “nameplate rating” of a piece of electrical equipment.
capacity: The maximum load that a generator, substation, transmission line or other electric apparatus can carry under existing service conditions, typically measured in megawatts or kilowatts.
capacity factor: The ratio of the average load on a machine or equipment, for the period of time considered, to the capacity rating of the machine or equipment.
captive customers: Any customer that cannot readily purchase power from suppliers other than the local utility, even if they have the legal right to do so. Captive electricity customers are generally considered to be the residential and small commercial customers.
cogeneration: The production of electrical energy and another form of useful energy (such as heat or steam) through the sequential use of a common fuel source.
coincidental peak demand: The moment of system peak load, when the sum of all meters is highest (though individual meters may be below their peaks).
combined cycle: The combination of a gas turbine and steam turbine in an electric generating plant. The waste heat from the first turbine cycle provides the heat energy for the second turbine cycle.
combustion turbine: A fuel-fired turbine engine used to drive an electric generator, typically fueled by natural gas.
comparability tariffs: In a restructured wholesale electrical market, according to FERC Order 888, there should be non-discriminatory, open access charges or tariffs for use of the transmission network by all generators of wholesale electricity on a comparable basis. These tariffs provide that the same prices, terms and conditions apply to both the utility for its own transactions and to other generators.
competition transition charge (CTC): A charge that allows a utility to recover investments in certain assets built to ensure a customer’s electric supply. It covers the remaining investment costs that were previously included in electric rates. The charge allows utilities to recover these costs from customers who change suppliers during a transition from regulated to competitive markets. The purpose is to avoid cost-shifting, and to enable utilities to retire debt and compete fairly. Also called an “exit fee” or “stranded cost charge.” See also “stranded cost.”
conductor: The wire cable strung between transmission towers or distribution poles, through which current flows.
congestion: The term used to refer to transmission paths that are constrained, limiting power transactions due to insufficient capacity. Congestion can be relieved by increasing generation or by reducing load.
conservation (also, energy efficiency): A resource produced by increasing the efficiency of energy use, of production, or of distribution.
consumer-owned utility (COU): A cooperative utility, a municipal utility, or a PUD. These utilities are owned by their retail customers and, in the Pacific Northwest, receive preference to BPA power by law.
cooperative (co-op): A private non-profit utility owned by its members and essentially self-regulated by an elected board of directors.
cost-based ratemaking: Regulated rates based on costs expended, not on meeting performance objectives identified by management.
cost-of-service analysis: A study designed to determine the cost of providing service to various classes of customers; used as a basis for establishing power and transmission rates.
cost recovery adjustment clause (CRAC): Contingent adjustments to BPA’s power rates adopted as a hedge against uncertain power markets. There are three CRACs: the load-based CRAC, the financial-based CRAC, and the safety net CRAC. Each triggers under pre-set conditions related to factors such as BPA’s net revenues and ability to repay Treasury debt. The name of the CRAC is proof that Northwest energy policy makers have a sense of humor.
cost shifting: Shifting cost increases or decreases among classes of customers, e.g., to residential from industrial or to commercial from residential.
critical period: The portion of the historical 50-year streamflow record for the Columbia River System during which the recorded streamflows, combined with all available reservoir storage, are able to produce the least amount of firm energy, while drafting reservoirs from full to empty. That period used to be 42½ months but, due to new hydro operations mandated under the biological opinion, it is now 8 months. The critical period is a planning tool used under the Pacific Northwest Coordination Agreement to determine the maximum firm load-carrying capability (FELCC) of the hydro system.
critical rule curves: Graphic representations of the storage level of a reservoir at various times of the year under critical streamflow conditions. The curve serves as a guide to the use of stored water by indicating the level at which storage would become insufficient to meet firm energy loads.
critical water (streamflow): A sequence of streamflows under which the regional hydro system could produce an amount of power equal to that which could have been produced during the historical critical period given today’s generating facilities and constraints.
curtailment: A temporary, mandatory load reduction on a transmission facility or generator under emergency conditions taken after all possible conservation and load management measures.
cutplanes: Reference points on a set of transmission lines that define capacity restrictions under certain operating conditions or when facilities are out of service. They are identified with transmission constraints.
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demand: The rate at which electric energy is delivered to or by a system at a given instant or averaged over a designated period, usually expressed in kilowatts or megawatts.
demand charge: A charge for the maximum rate at which energy is used during peak hours of a billing period. That part of a utility service charged for on the basis of the possible demand as distinguished from the energy actually consumed.
demand-side management (DSM) or demand response (DR): Strategies for reducing consumption by influencing when and how customers use electricity. Demand-side management includes such things as conservation programs and incentives for switching electricity use from mid-day to evening.
deregulation: The process of changing regulatory policies and laws to increase competition among suppliers of commodities and service. The process of deregulating the electric power industry was initiated by the Energy Policy Act of 1992. See also “restructuring.”
direct access: The ability of a retail customer to purchase power directly from the producer rather than having to go through a local distribution utility. Also called “retail access,” “customer choice,” “retail competition,” and “retail wheeling.”
direct current (DC): An electric current that flows in one direction with a magnitude that does not vary, or that varies only slightly.
distribution utility (Disco): The regulated electric utility entity in a competitive world that would construct and maintain the distribution wires connecting the transmission grid to the final customer. This entity would make distribution service available to any qualified energy service company on comparable bases.
dividend distribution clause (DDC): A provision allowing for the return to customers of funds BPA collects over and above its reserve requirements and those needed to protect its ability to repay Treasury debt.
direct service industries (DSIs): Industries that buy power directly from BPA rather than through retail utilities. The number of these customers is limited by law to those industries that were direct service customers on the date the Northwest Power Act was passed (1980). Currently, the only remaining DSIs are one aluminum smelter and one paper mill.
dispatch: To schedule and control the generation and delivery of electric power; also, the sequence in which generating resources are called upon to generate power to serve fluctuating loads.
dispatchable energy resource: A generator whose output can be carefully controlled by its operator, such as most thermal and hydroelectric generators. For comparison, see “variable energy resource.”
displacement: A customer’s right to reduce its purchase of more expensive energy from one supplier in order to purchase less expensive power from another. Displacement can also mean reducing or shutting down production at a thermal plant to use hydro power when it is available.
distribution: Local facilities used to deliver power at low voltages to consumers within a utility’s service area. Distribution is distinguishable from transmission, which refers to the transfer of large quantities of electric power at high voltages between utilities or regions.
distributed generation: Small-scale generation distributed throughout a utility’s system for the purpose of meeting local peak loads or displacing the need to build additional distribution lines. Residential-size fuels cells and microturbines powered by natural gas or other commonly available fuels are examples. These kinds of resources are becoming more competitive.
divestiture: The stripping off of one utility function from the others by selling or in some way changing the ownership of the assets related to that function. This term is most commonly associated with spinning off generation assets so that they are no longer owned by the shareholders that own the transmission and distribution assets. Divestiture, or legal separation, is distinguished from functional unbundling.
draft: To remove water or energy from a reservoir. Usually measured in feet of reservoir elevation.
drawdown: The distance the water surface of a reservoir is lowered from a given elevation as the result of releasing water for power generation, flood control, fish enhancement, irrigation or other use. Drawdown can be expressed in terms of the acre-feet of stored water released.
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efficiency: The percentage ratio of output to input in an a system such as an electrical device or power plant; also, energy savings created through conservation measures such as weatherization.
elasticity of demand: The degree to which consumer demand for a product responds to changes in price, availability or other factors.
electric and magnetic fields (EMF): Invisible force fields caused by the voltage and current around an electric wire or conductor in an electric system. Magnetic fields exist only when the current is flowing, that is, when the system is energized.
electricity: The term used for electric power and energy. Power means the total electricity delivered while energy refers to the amount delivered over time. Also, a flow of electrons along a conductor from an area of high electric potential to an area of lower potential. A wave form of the electromagnetic spectrum. See “ampere,” “volt,” and “watt.”
electronic tag (e-Tag): An electronic file used for communicating power flows across the transmission system, containing information on the amount of power, the time during which it will flow, the source and sink of the power, the curtailment priority, and other information. An e-Tag constitutes a transmission schedule.
El Niño/La Niña: (Also called the “Southern Oscillation.”) An extensive warming of the northern and central Pacific Ocean, occurring once every two to seven years, that leads to shifts in weather patterns across the ocean and adjacent continents. It also impacts fisheries and marine life, particularly in coastal regions of the eastern Pacific, where it decreases the food available to fish populations and alters their migrations as they search for cooler waters.
embedded cost: Capital investment already made or spent for power supply facilities such as generating plants, substations and distribution lines.
energy: Average power production over a stated interval of time, expressed in kilowatt-hours, megawatt-hours, average kilowatts or average megawatts. More generally, the capability to do work; different forms of energy can be converted to other forms, but the total amount remains constant.
- firm energy: Energy considered assurable to the customer to meet all agreed upon portions of a customer’s load requirements over a defined period. On BPA’s system, electric energy produced under critical water conditions.
- imbalance energy: Energy used to resolve a discrepancy between the amount of power a seller contracted to deliver and the amount delivered. Imbalances are resolved through monetary payments.
- in-lieu energy: Under the Pacific Northwest Coordination Agreement, energy exchanged between a reservoir owner and the owner of a downstream project. The agreement allows reservoir owners to retain water above a reservoir’s energy content curve; however, owners of downstream projects may request release of such water. Upstream project owners must then release the water or provide an amount of energy in-lieu of the release equal to the amount of energy which could have been generated downstream had the release been made.
- interchange energy: Energy received by one utility system from another, usually in exchange for energy delivered to another utility at another time or place.
- non-firm energy: Energy that is not guaranteed to be continuously available. Non-firm energy is available in varying amounts depending upon season and weather conditions.
- storage energy: The energy equivalent of water stored in a reservoir above normal bottom elevation.
- surplus (secondary) energy: Energy generated that is beyond the immediate needs of the producing system to serve customers. This energy may be sold on an interruptible basis or as firm power.
energy content curve: A seasonal guide to the use of storage water from reservoirs operated by parties to the Pacific Northwest Coordination Agreement. The curve charts reservoir levels and is designed primarily to assure that the first increment of water above that required for meeting firm load is used to refill the reservoir with 95 percent confidence by the end of July. The curve defines rights, entitlements, operations and limitations that the reservoir owner and downstream projects have for the use of storage water under the Coordination Agreement.
energy imbalance market: Balancing authority areas pool their variable and conventional generating resources to improve operational efficiency over a wider area. Centralized, automated generation dispatch addresses the variability of renewable resources such as wind, better balancing loads and resources in real time.
environmental externalities: In utility resource planning, the value or cost of what is lost or damaged when power facilities adversely affect the well being of humans or the environment, but which is not normally factored into production and pricing policy. Externalities can be adverse, such as the effects on health of air pollution from coal plants; or positive, such as the net improvement on air quality from the use of landfill projects to generate power.
excess federal power: electric power surplus to BPA’s firm contractual obligations available either because customers have elected to purchase power elsewhere or due to FCRPS fish operations.
exchange agreement: A contract that establishes an exchange of energy rather than a direct sale of energy. Often used among utilities in different regions (such as the Northwest and Southwest) to take advantage of seasonal differences in peak loads. Exchanges have economic benefits, and they sometimes have environmental advantages such as allowing for seasonal fish passage needs and lessening the use of air-polluting thermal plants.
exempt wholesale generator (EWG): A class of generators defined by the Energy Policy Act of 1992 that includes the owners and/or operators of facilities used to generate electricity exclusively for wholesale or that are leased to utilities.
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Federal Base System (FBS): The system defined by the Northwest Power Act to be: 1) the Federal Columbia River Power System (FCRPS) hydroelectric projects; 2) resources acquired by BPA under long-term contracts in force on the date of the Act; and 3) resources acquired by BPA to replace reductions in capability of FCRPS resources and contracted resources.
Federal Columbia River Power System (FCRPS): The FCRPS is made up of: 1) the hydroelectric generating projects constructed and operated by the Corps of Engineers and the Bureau of Reclamation in the Northwest; 2) the power BPA has acquired through net billing and exchanges, including the Columbia Generating Station nuclear plant; and 3) the electric transmission system constructed and operated by BPA (i.e., the FCRTS).
Federal Columbia River Transmission System (FCRTS): The electric transmission system in the Northwest built and operated by BPA. Also called the federal transmission grid or the BPA grid.
Federal Energy Regulatory Commission (FERC): A federal agency responsible for regulating key activities of the nation’s natural gas utilities, electric utilities, natural gas pipeline transportation utilities, and hydroelectric power producers. FERC has the authority to regulate jurisdictional electric utilities’ provision of transmission service, such as through requiring an investor-owned utility to file an Open Access Transmission Tariff.
firm energy load carrying capability (FELCC): The total amount of firm energy that can be produced and shaped to load under critical streamflow conditions by resources included in the Pacific Northwest Coordination Agreement.
firm power: Electric power that is guaranteed by the supplier to be available during specified times except when uncontrollable forces produce outages. Firm power consists of either firm energy, firm capacity, or both.
fish ladder: A device made up of a series of pools similar to a staircase that enables fish to migrate upriver past dams.
fish screen: A device that helps guide fish away from turbines at a hydroelectric dam.
fish passage facilities: Features of a dam that enable fish to move past the dam without harm. Generally, these are upstream fish ladders or downstream bypass systems.
fixed cost: Costs of generation projects incurred regardless of the amount of energy produced. Such costs normally include capital costs, the cost of financing construction (in the form of interest) and insurance.
flowgate: A boundary in a transmission system across which there may be congestion, requiring monitoring by the Balancing Authority.
flow augmentation: Water released from a storage reservoir to enhance flow, particularly to aid fish migration. See also “spill.”
forecasting: The process of estimating or calculating electricity load or resource production at some point in the future.
forward contract: A supply contract between a buyer and seller, obligating the buyer to take delivery, and the seller to provide delivery, of a fixed amount of commodity at a predetermined price on a specified future date. Payment in full is due at the time of, or following, delivery. This differs from a futures contract where settlement is made daily, resulting in partial payment over the life of the contract.
fuel cell: An electrochemical device that continuously converts the chemical energy of a fuel and an oxidant to electrical energy. The fuel and oxidant are typically stored outside of the cell and transferred into the cell as the reactants are consumed.
fuel switching: Substituting one fuel for another based on price and availability. Large industries often have the capability of using either oil or natural gas to fuel their operations and of making the switch on short notice.
full requirements customers: Utilities that generate no power, relying instead on BPA for all of the power needed to meet their total load requirements.
functional unbundling: The functional separation of generation, transmission, and distribution transactions within a vertically integrated utility without selling or “spinning off” these functions into separate companies. For comparison, see “divestiture.”
futures contract: A supply contract between a buyer and seller, whereby the buyer is obligated to take delivery and the seller is obligated to provide delivery of a fixed amount of a commodity at a predetermined price at a specified location. Futures contracts are traded exclusively on regulated exchanges and are settled daily based on their current value in the marketplace. See also “forward contract.”
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gas bubble disease: A water condition, also called nitrogen supersaturation, in which the concentration of dissolved nitrogen exceeds the saturation level of the water. Nitrogen supersaturation can be caused by turbulence as water is spilled over a dam. Excess nitrogen can harm the circulatory systems of fish.
generation: The act or process of producing electricity from other forms of energy, such as steam, heat, or falling water. The term also refers to the amount of electric energy produced.
generation inputs (Gen Inputs): Products and services that BPA provides to its transmission customers that require generation to supply both power and capacity. These inputs are necessary for most of the Ancillary and Control Area Services that BPA provides under its OATT.
general transfer agreements (GTAs): Transmission arrangement by which BPA wheels federal power over the transmission grid of another utility (generally, investor-owned – though not exclusively) in order to provide power to public utilities which are not directly connected to the main BPA transmission grid.
geothermal generation: Power generated from heat energy derived from hot rock, hot water, or steam below the earth’s surface.
gigawatt-hour (GWh): One thousand megawatt-hours; one million kilowatt-hours; one billion watt-hours.
green power/green marketing/green pricing: The offer for sale at either wholesale or retail, of power products from renewable resources, i.e., “green power.” These offers provide consumers who believe that the benefits of renewable resources are not fully reflected in market-driven resource development with the opportunity to purchase “green power.”
grid: The linking system of transmission lines, regionally and locally.
hatchery: A facility for incubating and hatching fish eggs, raising and releasing juvenile fish, and holding adult fish for spawning.
head: The vertical height of the water in a reservoir above the turbine. In general, the higher the head, the more electricity is generated per acre-foot.
heavy load hour (HLH): Times of highest electricity usage. Heavy load hours typically occur in the morning and early evening. Spot market power is more expensive during HLHs. See also “light load hour.”
hedge: The initiation of a position in a futures or options market that is intended as a temporary substitute for the sale or purchase of the actual commodity. Sales of futures contracts are made in anticipation of future sales of cash commodities as a protection against possible price declines. Purchases of futures contracts are made in anticipation of future purchases of cash commodities as a protection against the prospect of cost increases.
horizontal integration: The acquisition by a company of another company which is operating in the same market, for example, generation or distribution. See also “vertical integration.”
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incremental cost: In the utility industry, the additional costs that a utility would incur by operating a power plant, the cost of the next kilowatt-hour generated or purchased, or the cost of producing and/or transporting the next available unit of electrical energy above the current previously determined base cost. See also “marginal cost pricing.”
independent power producer (IPP): A non-utility power generating entity, defined by the 1978 Public Utility Regulatory Policies Act, that typically sells the power it generates to electric utilities at wholesale prices.
independent system operator (ISO): Independent manager of transmission lines to assure safe and fair transfer of electricity from generators to distribution companies.
integrated resource planning (IRP): Also known as “integrated resource management”: a planning process for new energy resources that evaluates the full range of alternatives, in order to provide adequate and reliable service to its customers at the lowest system cost. The alternatives can include new generation capacity, power purchases, energy conservation and efficiency, cogeneration and renewable energy resources. In a restructured electric industry there may be no mechanism to continue this process.
interruptible loads: Loads that by contract can be interrupted if the supplier needs the energy to meet its firm loads. Utilities normally provide interruptible service at a discounted rate.
investor-owned utility (IOU): A privately-owned utility organized under state law as a corporation to provide electric power service and earn a profit for stockholders. IOUs are subject to the “regulatory compact.”
inverted rates: A rate structure that prices successive blocks of power use at increasingly higher per-unit prices. The more electricity a customer uses, the greater the per-unit price.
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juvenile: The early stage in the life cycle of anadromous fish when they migrate downstream to the ocean.
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kilowatt (kW): A unit of electrical power equal to one thousand watts.
kilowatt-hour (kWh): A basic unit of electrical energy which equals one kilowatt of power used for one hour.
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levelized cost: The expression of costs on an equal, per-unit basis, taking into account an appropriate interest rate. Nominal levelized costs include the effects of inflation. Levelized life-cycle costs for a resource include capital, financing and operating costs. Levelized costs permit comparisons of resources with different lifetimes and generating capabilities. See also “real dollars.”
light load hour (LLH): Times of low electricity usage. LLHs typically occur between 10 pm and 6 am and during weekends. Spot market prices for electricity are lower during LLHs. See also “heavy load hour.”
load: The amount of electric power consumed at a given point on a system.
load factor: The ratio of average load to peak load during a specific period of time, expressed as a percent.
load following: A BPA power product sold to preference customers under the Regional Dialogue contracts, in which BPA provides power to match the customer’s load. (For general use of the term, see “balancing reserves.”)
load management: The management of load patterns in order to better utilize the facilities of the system. Generally, load management attempts to shift load from peak use periods to low use periods.
losses: The term used to refer to energy and power that turns to waste heat during the operation of an electric system. Energy loss is the difference between power supplied and power received due to dissipation along transmission lines and other facilities; line loss is the energy lost in transmission and distribution lines only.
low-density discount: This BPA rate discount benefits utilities that provide service to sparsely populated rural areas where distribution costs are spread over fewer customers. The Northwest Power Act mandates that there be such a discount, but the level of the discount is set by BPA.
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mainstem: The main channel of a river – as opposed to the streams and other tributary rivers that feed into it.
marginal cost pricing: A system of pricing designed to reflect the cost of adding new power facilities to a system. Sometimes referred to as incremental cost pricing.
market power: When one or a few large companies dominate power production in a regional market and use such dominance to manipulate the market.
megawatt (MW): A unit of electrical power equal to one million watts or one thousand kilowatts. See also “average megawatt.”
megawatt-hour (MWh): A unit of electrical energy which equals one megawatt of power used for one hour. Electricity prices are frequently quoted in dollars per megawatt-hour.
megawatt-month (MW-mo): A unit used to measure and price transmission service. A megawatt-month is one megawatt of transmission capacity made available for one month.
melded rate: A rate which reflects the combined costs of different sources of power. Typically costs of existing hydro projects and costs of newer thermal plants are said to be melded when combined or averaged together in one rate.
Mid-Columbia (Mid-C): The section of the Columbia River from its junction with the Snake River up to Grand Coulee Dam. Dams in this region are known as the Mid-Columbia projects; the three large public utilities in the area—Grant PUD, Douglas PUD and Chelan PUD—are known as the Mid-Columbia PUDs. Due to the number of large dams in the area, Mid-C is also used as a trading hub for the spot power market and as the delivery point for electricity futures contracts.
mill: One-tenth of one cent. Electricity prices are frequently quoted in mills per kilowatt-hour (mills/kWh).
minimum operating pool: The lowest water level of an impoundment at which navigation locks can still operate.
model conservation standards: Construction standards for new electrically-heated residential and commercial structures, and conversion standards for residential and commercial structures that switch to electric space heating.
municipal utility: A utility owned and operated by a city government.
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nameplate capacity (or installed capacity): A measurement indicating the approximate generating capability of a project or unit, as designated by the manufacturer. In many cases, the unit is capable of generating substantially more than the nameplate capacity since most generators installed in newer hydroelectric plants have a continuous overload capacity of 115 percent of the nameplate capacity.
natural gas: A naturally occurring mixture of hydrocarbon and non-hydrocarbon gases found in porous rock formations. The principal component is methane. Natural gas uses include direct use by retail customers to heat homes and as a fuel for power plants.
Network Open Season (NOS): The process through which BPA studies potential construction of transmission facilities to accommodate customers’ long-term Transmission Service Requests (TSRs). Instead of studying the TSRs individually, BPA groups them together in order to do “cluster studies,” in which one set of transmission facilities fulfills multiple TSRs. If BPA identifies transmission facilities that it can construct to fulfill TSRs at transmission rates that are agreeable to those customers, then those customers may sign contracts to commit to taking transmission service in exchange for BPA’s construction of those facilities. See also “Precedent Transmission Service Agreement.”
net billing: A financial arrangement that allows BPA to underwrite the costs of certain electric generating projects. Under net billing, utilities that own shares in thermal projects assigned all or part of the generating capability of those resources to BPA. BPA, in turn, credits the wholesale power bills of these utilities to cover the costs of their shares in the thermal resources. BPA sells the output of the thermal plants, averaging the higher costs of the thermal power with lower cost hydropower. Washington Public Power Supply System Nuclear Projects 1, 2, and 3, are net billed.
net firm requirements load: The amount of a BPA customer’s retail consumer load that exceeds–or is net of–the capability of the customer’s own firm resources. Under the Power Planning Act, this is the amount of electric power BPA must offer to sell to each public utility requesting such service.
new large single load: Any load associated with a new or existing facility, or an expansion of an existing facility that was not in BPA’s opinion contracted for, or committed to, an existing BPA customer prior to September 1, 1979, and that will result in an increase in the customer’s power requirements by 10 average megawatts or more in any consecutive 12-month period.
Northwest Power Act: (The full title of the bill is the “Pacific Northwest Electric Power Planning and Conservation Act.”) A landmark piece of legislation, passed in 1980, governing the power and transmission rates set by BPA, as well as BPA’s Residential Exchange Program and fish and wildlife program. The Act also created the Northwest Power and Conservation Council.
Northwest Power and Conservation Council (NWPCC): A multi-state compact formed in 1981 in accordance with the Northwest Power Act. Comprised of two gubenatorially appointed members from each of the states of Washington, Oregon, Idaho, and Montana. The primary duties of the NWPCC are to create both a power plan and a fish and wildlife program for the region. In both of these processes the NWPCC is required to solicit input from the region at large. The Council’s power plan must be aligned with principles of ensuring an adequate, efficient, economical, and reliable power supply for the Pacific Northwest.
North American Electric Reliability Corporation (NERC): The nonprofit corporation tasked with developing nation-wide reliability standards for transmission systems. NERC is also responsible for enforcing those standards, and training personnel in the electric industry to meet them.
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OASIS (open access same-time information system): A real-time, internet-based information-sharing system that allows all buyers and sellers of electricity to access the same information about the availability and cost of transmission services. The system is meant to ensure that transmission owners and their affiliates are not able to exercise market power by having an unfair advantage in the use of transmission to sell power.
obligation to serve: Under the “regulatory compact,” the obligation to provide reliable electrical service to all customers who seek that service at fair and reasonable prices, in exchange for the granting of an exclusive service territory (that is, a monopoly). It includes both appropriate planning for future service and the requirement to provide an operating reserve capacity.
off peak: A period of relatively low demand for electrical energy, such as the middle of the night.
open access: The term applied to the evolving access to the transmission system for all generators and wholesale customers. Also, the use of a utility’s transmission and distribution facilities on a common-carrier basis at cost-based rates. See also “direct access.”
Open Access Transmission Tariff (OATT): In a restructured wholesale electrical market, according to FERC Order 888, 890, and others, there should be non-discriminatory, open access charges or tariffs for use of the transmission network by all generators of wholesale electricity on a comparable basis. These tariffs provide that the same prices, terms and conditions apply to both the utility for its own transactions and to other generators. A transmission operator that is regulated by FERC (such as an investor-owned utility) is required to have an OATT approved by FERC, and other transmission operators may file an OATT in order to receive “reciprocity” and be able to purchase transmission products from other transmission operators under their OATTs.
operating reserves: The electric power needed to provide service to customers in the event of generation or transmission system outages, delays in the completion of new resources or other factors which may restrict generating capability or increase loads. Operating reserves normally are provided from additional resources acquired for that purpose, or from contractual rights to interrupt, curtail or otherwise withdraw portions of the electric power supplied to customers. In the Pacific Northwest, Balancing Authorities share operating reserves through a program under the Northwest Power Pool.
option: A contract which gives the holder the right, but not the obligation, to purchase or to sell an underlying futures contract at a specified price within a specified period of time in exchange for a one-time premium payment.
oversupply: A situation in which BPA has more generation than load on its system. It has occurred when BPA must generate hydroelectricity to lower total dissolved gas (TDG) levels, but is having difficulty finding sufficient load without displacing other generators. TDG levels are increased by spill at hydro projects, and can be dangerous for fish if they exceed a certain threshold. See also “gas bubble disease.”
outages: Periods, both planned and unexpected, during which a power-producing facility ceases to provide generation or the transmission of power stops.
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Pacific DC Intertie: A set of transmission facilities which transmit energy between the Pacific Northwest and southern California, using direct current to reduce losses over the long distance. The intertie runs between The Dalles, Oregon, and the northern end of the Los Angeles area.
pancaked rates: The practice of adding a transmission fee on top of previous transmission fees each time power passes through a different utility service area between the generator and the distribution system.
peak load: The maximum electrical load demand in a stated period of time. On a daily basis, peak loads occur at mid-morning and in the early evening.
peak load plant (“peaker”): A power plant which is normally operated to provide power during maximum load periods. Examples are combustion turbines and pumped hydro storage.
performance-based ratemaking: Regulated rates based on performance objectives, not on actual costs.
photovoltaic conversion: The process of converting the sun’s light energy directly into electric energy.
point of delivery (POD): A point where a utility connects with a transmission system and where power is delivered. The delivered power is metered and there is a change of ownership.
postage stamp rate: A rate for transmission service that does not vary according to distance from the source of the power supply.
pot/potline: An aluminum production term. A pot is an electrolytic reduction cell, wherein alumina dissolved in molten cryolite is reduced to metallic aluminum. A series of cells connected electrically is called a potline.
power: A term usually meant to imply both electric capacity and electric energy.
power brokers and marketers: Companies seeking to sell generation to utilities, large industrial customers or to an aggregation of smaller customers.
power exchange: Energy delivered during on-peak hours in a particular season in exchange for an equivalent amount of energy returned during on-peak hours in a different season. Also, the term used to describe a spot price market for electricity.
power factor: The fraction of power actually used by a customer’s electrical equipment compared to the total apparent power supplied, usually expressed as a percentage. Power factor indicates how far a customer’s electrical equipment causes the electric current delivered at the customer’s site to be out of phase with the voltage. This enables a power supplier to calculate a power factor adjustment for customers with large loads.
power marketing administration: Congress established five federal power marketing administrations (PMAs) to sell hydroelectric power generated by federal dams and power plants. BPA is the oldest of the PMAs.
Precedent Transmission Service Agreement (PTSA): A contract signed by BPA and a transmission customer at the end of the Network Open Season process, in which the customer commits to taking long-term transmission service if BPA constructs transmission facilities required to support that customer’s needs.
preference: A legal doctrine that gives publicly-owned utilities and cooperatives priority access to federal power. There are two kinds: public preference, which favors publicly-owned utilities; and regional preference, which favors utilities in the Northwest.
preference customers: Publicly-owned utilities and non-profit cooperatives which by law have preference over investor-owned systems and industrial customers for the purchase of power from federal projects.
priority firm (PF) rate: The rate for BPA’s sales of firm power to its preference customers (hence: priority firm power).
provider of last resort: A legal obligation (traditionally required of utilities) to provide services to a customer where competitors have decided they do not want that customer’s business.
public power: The term used for not-for-profit utilities that are owned and operated by their consumers – see “consumer-owned utility.”.
public purpose costs: These are the costs of conservation programs, renewable energy and environmental expenses—such as fish restoration—which are borne by utilities.
Public Utility Regulatory Policies Act of 1978 (PURPA): A federal law the requires utilities to purchase electricity from qualified independent power producers at a price that reflects what the utilities would have to pay for the construction of new generating resources (see “avoided cost” and “qualifying facility”). Portions of the act were designed to encourage the development of small-scale cogeneration and renewable resources.
PUD: Public Utility District in Washington and People’s Utility District in Oregon. A non-profit political subdivision, with territorial boundaries for an area wider than a single municipality and sometimes covering more than one county, established by voters to supply electric or other utility service.
pumped-storage hydroelectric generation: A hydroelectric power plant which generates electric energy to meet peak load by using water pumped into a storage reservoir during off-peak periods, or to provide energy storage for variable energy resources.
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qualifying facility (QF): A designation created by the Public Utility Regulatory Policies Act of 1978 for non-profit power producers that meet certain operating, efficiency and fuel use standards set by the Federal Energy Regulatory Commission. QFs are small plants, generally 50 MW or less, which usually rely on renewable energy sources or cogeneration.
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rate design: The development of electricity prices for various customer classes to meet revenue requirements dictated by operating needs and costs.
reactive power: The portion of electricity that establishes and sustains the electric and magnetic fields of alternating-current equipment. Reactive power must be supplied to most types of magnetic equipment, such as motors and transformers. It also must supply the reactive losses on transmission facilities. Reactive power is provided by generators, synchronous condensers, or electrostatic equipment such as capacitors and directly influences electric system voltage. It is usually expressed in kilovars (kvar) or megavars (Mvar).
real dollars: Dollars that do not include the effects of inflation. They represent constant purchasing power. See also “levelized cost.”
record of decision (ROD): The document notifying the public of a substantive policy decision taken by a federal agency such as BPA on a proposed action, along with the reasons for the choices made and a discussion of comments received. RODs constitute final agency action.
redds: Spawning nests made in the gravel beds of rivers by salmon and steelhead.
regional dialogue contracts: Twenty-year take-or-pay contracts that BPA signed with preference customers in 2008, providing a framework for the power products sold by BPA to preference customers, and providing for different tiers of federal generation. See “load following,” “slice,” and “Tiered Rates Methodology.”
regional transmission organizations (RTOs): Independent managers of the interstate transmission system within a given region. RTOs, encouraged under FERC Order 2000, are intended to remove operation of the transmission infrastructure from the competitive generation and marketing of wholesale electricity.
regulatory compact: A traditional covenant between the state and an investor-owned utility. In exchange for the obligation to provide service to all customers in a defined service territory, an IOU is given a territorial monopoly on service and allowed to earn a limited profit set by state regulators.
reliability: Electric system reliability has two components – adequacy and security. Adequacy is the ability of the electric system to supply the aggregate electrical 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.
renewable energy: Any energy that originated in the sun and is continually replenished, including direct and indirect solar radiation and intermediate solar energy forms such as wind, ocean currents and waves, hydropower, geothermal and organic waste; resources regarded as practically inexhaustible. In the Northwest Power Act, a renewable resource is one that uses solar, wind, hydro, geothermal, biomass or similar sources and is used either for electric power generation or to reduce the electric power requirements of a consumer. Under most state Renewable Portfolio Standards, hydroelectricity only qualifies as renewable energy in narrowly defined conditions.
renewable energy credit (REC): A credit that is used to represent the environmental attributes of the production of one megawatt-hour of renewable energy, often used for compliance for Renewable Portfolio Standards. RECs allow utilities to financially support renewable energy generation without purchasing the energy directly.
renewable portfolio standard (RPS): A law, currently existing only at the state level, which requires utilities to acquire a certain amount of renewable energy, defined as a percentage of the energy that the utility provides to its retail customers. For example, Washington’s RPS requires certain utilities to use at least 3% renewable energy in the years 2012 through 2015. Instead of using the energy directly, utilities can acquire Renewable Energy Credits to meet their RPS obligations. “Renewable energy” is typically defined to exclude most hydropower under these laws.
requirements contract: A power sales contract between BPA and a customer requiring BPA to deliver an amount of wholesale power to meet the customer’s firm electric power needs above any other generation the customer uses to meet those needs.
reservation: The amount of capacity provided to a transmission customer under a Transmission Service Agreement, typically measured in megawatts.
reserve capacity: Extra generating capacity available to meet unanticipated demands for power or to generate power in the event of loss of generation. Operating standards generally provide for a reserve margin expressed as a percent of projected need.
reserves: The electric power needed to provide service to customers in the event of generation or transmission system outages, adverse streamflows, delays in the completion of new resources or other factors which may restrict generating capability or increase loads. Reserves normally are provided from additional resources acquired for that purpose, or from contractual rights to interrupt, curtail or otherwise withdraw portions of the electric power supplied to customers.
resident fish: Fish that spend their entire life cycle in freshwater, such as trout and bass.
residential exchange: An accounting procedure, established in the Power Planning Act, whereby regional utilities sell BPA an amount of power equal to their residential and small farm customer load at their average system cost in exchange for federal power, and pass the benefit on to those customers through lower rates. The intent is to share the benefits of the Federal Columbia River Power System.
resource: A generator or other source of energy, such as a load with a Demand Response program.
restructuring: Reconfiguring the market structure by eliminating the monopoly on the essential functions of an electric company. Restructuring usually refers to separation of the various utility functions (such as power and transmission) into separate entities.
retail access: See “direct access.”
retail wheeling: The sale of electricity by a utility or other supplier to a customer in another utility’s retail service territory. “Wheeling” refers to the use of the local utility’s transmission and distribution lines to deliver the power. See also “direct access.”
revenue requirement: The amount of funds (revenue) a utility must take in to cover the sum of its estimated operation and maintenance expenses, debt service and taxes. During the rate-setting process, the calculation of the revenue requirement is compared to revenue produced by current rates to determine whether a rate increase is needed, and if so, to determine the overall size of the increase.
rule curves: Water levels, represented graphically as curves, that guide reservoir operations. See also “critical rule curves.”
run-of-river plant: A hydroelectric plant which depends chiefly on the flow of a stream as it occurs for generation, as opposed to a storage project, which has space available to store water from one season to another. Some run-of-river projects have a limited storage capacity which permits them to regulate streamflow on a daily or weekly basis.
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salmonid: A fish of the Salmonidae family which includes soft-finned fish such as salmon, trout, and whitefish
schedule: An agreed-upon transaction size (megawatts), start and end time, beginning and ending ramp times and rate, and type required for delivery and receipt of power and energy between contracting parties and the Balancing Authority Area(s) involved in the transaction.
scheduling: Operating a power system to balance generation and loads; managing the accounting, billing and information reporting for such operations.
seasonal exchange: A transaction that takes advantage of the seasonal diversity between Northwest and Southwest loads through transfers of firm power from north to south during the Southwest’s summer load season and from south to north during the Northwest’s winter load season.
self-generation: A generation facility dedicated to serving a particular retail customer, usually located on the customer’s premises. The facility may either be owned directly by the retail customer or owned by a third party with a contractual arrangement to provide electricity to meet some or all of the customer’s load.
shaping: The scheduling and operation of generating resources to meet changing load levels. Load shaping on a hydro system usually involves the adjustment of water releases from reservoirs so that generation and load are continuously in balance.
sink: A point in a transmission system where a load is located. For contrast, see “source.”
slice: A BPA power product sold to preference customers under the Regional Dialogue contracts under which the purchaser pays a fixed percent of BPA’s power costs in exchange for a fixed percent of generation and capabilities of the Federal Columbia River Power System.
smolt: A juvenile salmon migrating to the ocean and undergoing physiological changes to adapt from a freshwater to a saltwater environment.
solar generation: The use of radiation from the sun for the generation of electricity, either through photovoltaic panels or the capture and use of solar heat for steam turbines.
source: A point in a transmission system where a generator is located. For contrast, see “sink.”
spill: Release of water from a reservoir over a spillway rather than putting it through turbines to generate electricity.
spillway: Overflow structure of a dam.
spinning reserve: The unloaded (not in use) generating capacity of a system’s firm resources that is available on five minutes’ notice to take up load on a sustained basis.
spot market: A temporary market for electricity based on short-term supply and demand. Spot prices are typically quoted on an hourly, daily or weekly basis.
steam generation plant: A thermal electric generating plant which creates steam to drive a turbine.
steelhead: An anadromous rainbow trout.
stranded costs (or investments): Costs that were incurred by utilities to serve their customers with the understanding that state regulatory commissions would allow the costs to be recovered through electric rates. Stranded costs can occur either because particular customers discontinue their use of a service or because such customers are no longer willing to pay the full costs incurred to provide a service. Because the electric utility industry is highly capital intensive, recovery of these costs is a central issue. Assignment of costs (ratepayers versus shareholders), jurisdiction over costs (state versus federal), and recovery method are core concerns. FERC has determined that stranded costs at the wholesale level should be paid by electric customers desiring to exit a system built to serve them. See “competition transition charge.”
substation: An electric power station which serves as a control and transfer point on an electrical transmission system. Substations route and control electrical power flow, transform voltage levels, and serve as delivery points to individual customers.
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take-or-pay: A power sales contract provision where the sale price is contingent on a customer’s committing to purchase a certain amount of power, even if the customer actually uses less power.
targeted adjustment charge (TAC): A charge BPA applies to firm power customers who place unanticipated, incremental load on the agency. It would apply, for example, to a customer that adds load through retail access.
tariff: See “Open Access Transmission Tariff.”
thermal generation: The production of electricity from plants that convert heat energy into electrical energy. The heat in thermal plants can be produced from a number of sources such as coal, natural gas, biomass, or nuclear fuel.
tiered rates: A rate design which divides customer use into different tiers, or blocks, with different prices charged for each.
Tiered Rates Methodology (TRM): The methodology, under the Regional Dialogue contracts, through which BPA charges the costs of energy from the Federal Base System separately from the costs of energy from resources acquired to meet customers’ needs. Each historic preference customer receives an allocation of FBS energy sold at the Tier 1 rate, and may purchase Tier 2 power (at a market-based rate) from BPA to meet remaining needs.
time-of-day pricing: A rate design imposing higher charges during periods of the day when higher energy costs are incurred.
transition charge: See “competition transition charge.”
transmission: The act or process of transporting electric energy in bulk along high voltage lines from one point to another in the power system, rather than to individual retail customers.
transmission grid: An interconnected system of electric transmission lines and associated equipment for the transfer of electric energy in bulk between points of supply and points of demand.
Transmission Service Agreement (TSA): A contract between a transmission provider (such as BPA) and a transmission customer for the use of transmission service on the provider’s system, specifying the source and sink of the transmission service, the type of service, and the applicable charges.
Transmission Service Request (TSR): A formal request made pursuant to an OATT, generally over an OASIS in electronic form, for transmission service between two points. TSRs are placed in a queue based on the time of submission.
turbine: The part of a generating unit which is spun by the force of water or steam to drive an electric generator. A turbine usually consists of a series of curved vanes or blades on a central spindle.
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unbundled services: The selling and pricing of services–such as generation, transmission and distribution–separately, as opposed to offering services “bundled” into packages with a single price for the whole package.
variable cost: The total costs incurred to produce energy, excluding fixed costs which are incurred regardless of whether the resource is operating. Variable costs usually include fuel, maintenance and labor.
variable energy resource: (Also “intermittent resource.”) A generator whose output is constantly fluctuating and only partly controllable, such as wind turbines or solar panels. For comparison, see “dispatchable energy resource.”
variable energy resource balancing service (VERBS): The service through which BPA provides balancing reserves to variable generators and charges for the associated costs.
vertical integration: An arrangement in which the same company owns all the different aspects of making, selling and delivering a product or service. In the electric industry, it refers to the historically common arrangement in which a utility owns its own generating plants, transmission system, and distribution lines to provide all aspects of electric service. See also “horizontal integration” and “unbundling.”
volt (voltage): The unit of measurement of electric potential, or difference in charges between two points. It is equivalent to the potential required to produce a current of one ampere through a resistance of one ohm.
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watt: An electric unit of power or a rate of doing work, equal to a current of one ampere flowing at a potential of one volt. See “kilowatt” and “megawatt.”
Western Electric Coordinating Council (WECC): The regional electric reliability council that sets reliability standards for the entire Western Interconnection, monitors compliance, and produces high-level transmission plans. WECC is under the authority of the North American Electric Reliability Corporation, but it develops standards specific to the region.
Western Interconnection: The Western Interconnection is defined as all load and resources that are synchronously connected with the reliability region of the Western Electricity Coordinating Council. States and provinces in this region include Wyoming, New Mexico, Nevada, Idaho, Washington, Oregon, California, Alberta, British Columbia and most of Montana and Colorado.
wheeling: The use of the transmission facilities of one system to transmit power for another system.
wholesale power market: The purchase and sale of electricity from generators to resellers (who sell to retail customers) along with the Ancillary and Control Area Services needed to maintain reliability and power quality at the transmission level.
wind generation: The use of wind to produce electricity, through the use of wind turbines.
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