Energy Market

Energy Market terms

1. 1 million British thermal units or 1 dekatherm (MMBtu) 1 million British thermal units, or 1 dekatherm. Approximately equal to 1,000 cubic feet (Mcf) of natural gas.
2. 1 million cubic feet (MMCF) (MMCF) 1 million cubic feet (of gas), or 1,000 Mcf.
3. 12-month strip Prices for the next 12 months of consecutive natural gas futures trading contracts, usually starting with the nearest, or prompt, month.
4. Active traders Market participants who trade frequently, often many times a day, and therefore are attune to the ebbs and flows, the rumors, breaking news, activities of…
5. Ancillary services Those services necessary to support the transmission of electric power from seller to purchaser, given the obligations of control areas and transmitting…
6. Arbitrage Arbitrage is the technique of simultaneously buying at a lower price in one market and selling at a higher price in another market to make a profit on the…
7. Automated mitigation procedure A procedure under which the bids of individual suppliers are capped under certain predetermined conditions.
8. Automatic generation control The automatic regulation of the power output of electric generators within a prescribed range in response to a change in system frequency, or tie-line…
9. Availability A reflection of the form and location of nutritional elements and their suitability for absorption.
10. Balancing The requirement imposed by electricity grids or natural gas pipelines that supply and demand be equal over a certain time period.
11. baseline An initial measurement that is taken at an early time point to represent a beginning condition, and is used for comparison over time to look for changes.
12. Baseload The minimum level of electric power demand of a utility, region, or utility customer delivered or required over a given period of time at a steady rate…
13. Baseload Unit An electric power plant, or generating unit within a power plant, that is normally operated continuously to meet the base load of a utility.
14. Basis Basis is the total cost of buying an investment or other asset, including the price, commissions, and other charges.
15. Basis Swaps Exchange of fixed price for a floating for a defined basis product (e.g. a Houston Ship Channel – HSC Swap at $1.
16. Bid-ask differential, or spread The difference in price between what a buyer offers to pay for a commodity and what a seller offers to accept for a commodity, sometimes referred to as…
17. Bilateral transaction A direct contract between a seller and buyer outside of a centralized market or exchange (e.g. Nymex or an RTO/ISO).
18. British thermal unit (Btu) (BTU) The amount of heat required to raise the temperature of one pound of water one degree Fahrenheit; equal to 252 calories.
19. Broker An agent who handles the public's orders to buy and sell securities, commodities or other property. A commission is generally charged for this service.
20. Bus A parallel circuit that connects the major components of a computer, allowing the transfer of electric impulses from one connected component to any other.
21. Capacity Your ability to make your mortgage payments on time. This depends on your income and income stability (job history and security), your assets and savings…
22. Capacity factor The ratio of the average load on (or power output of) a generating unit or system to the capacity rating of the unit or system over a specified period of…
23. Capacity margin The amount of capacity above planned peak system demand available to provide for scheduled maintenance, emergency outages, system operating requirements…
24. Capacity markets A market for the trading of capacity credits (the ability to produce electricity in the market area during a defined period) usually between parties…
25. Centralized Exchange A market where market participants execute all transactions with the central entity operating under a set of rules (product specifications, execution…
26. City Gate Generally refers to the location at which gas changes ownership or transportation responsibility from a pipeline to a local distribution company or gas…
27. Clearing The registration and settlement of a trade that includes provisions for margin requirement and performance guarantee.
28. Coalbed methane A methane-rich gas, similar to natural gas, produced from in-situ coal through drilled wells that are typically completed open-hole, as opposed to the…
29. Collateral Assets that are offered to secure a loan or other credit. For example, if you get a real estate mortgage, the bank's collateral is typically your house.
30. Combined-cycle generators See Combined-cycle Power Plant.
31. Combined-cycle power plant A power plant that uses two thermodynamic cycles to achieve higher overall system efficiency; e.g.
32. Combustion turbine A turbine that generates power from the combustion of a fuel.
33. Congestion A characteristic of the transmission system produced by a constraint on the optimum economic operation of the power system, such that the marginal price…
34. Congestion costs Charges assessed and redistributed due to electricity network constraints.
35. Control area An electric power system or combination of electric power systems to which a common automatic control scheme is applied in order to: Match, at all times…
36. Cooling degree days (CDD) (CDD) A measure of cooling energy demand determined by how far a location's temperature averaged above 65 degrees Fahrenheit.
37. Counterparty In any financial contract, the persons or institutions entering the contract on the opposite sides of the transaction are called the counterparties.
38. Credit Credit generally refers to the ability of a person or organization to borrow money, as well as the arrangements that are made for repaying the loan and…
39. Credit clearing A mechanism for settling mutual claims that shares among many parties the risk of a company failing to fulfill its contract.
40. Credit rating Your credit rating is an independent statistical evaluation of your ability to repay debt based on your borrowing and repayment history.
41. Credit Risk A term used to describe the possibility of default on a loan by a borrower.
42. Credit Score A number, roughly between 300 and 800, that measures an individual's credit worthiness. The most well-known type of credit score is the FICO® score.
43. Critical notices Pipeline issuances that provide information on conditions that affect natural gas scheduling or adversely affect scheduled gas flow.
44. Curtailable load Electricity deliveries that are subject to interruption by the grid operator.
45. Daily (or Next-Day) Indexes Published (Platts, NGI, Dow Jones, SNL, ICE, NGW) price indices for commodities (gas or electricity) to be delivered the next day based on transactions…
46. Daily Deals Usually transactions done on a day for delivery or settlement or both, the next day.
47. Day-ahead markets Forward markets for electricity to be supplied the following day. This market closes with acceptance by the independent system operator, power exchange…
48. Debt financing Providing capital by selling bonds, bills, or notes to individuals or institutions.
49. dekatherm or decatherm (DTH) (DTH) Ten therms, same as one million British thermal units or one MMBtu.
50. Delivery Point(s) An industry-designated location at which delivery may be made in fulfillment of contract terms.
51. Demand Form PCT/IPEA/401, filed with an International Preliminary Examining Authority, demanding that an international application shall be the subject of an…
52. Demand elasticity The degree to which demand changes relative to a change in price.
53. Demand responsiveness/demand response A change in demand for a good or service in response to a change in price for the good or service.
54. Distillate fuel oil Products of refinery distillation sometimes referred to as middle distillates; kerosene, diesel fuel, and home heating oil. No.
55. Dual-fueled (or dual-fired) unit A generating unit that can produce electricity using two or more fuels. In some of these units, only the primary fuel can be used continuously; the…
56. Electric utilities All enterprises engaged in the production and/or distribution of electricity for use by the public, including investor-owned electric utility companies…
57. Electronic trading platform An electronic system matching bids (to buy) and offers (to sell), increasingly employed in many venues (Nymex, ICE, voice brokers, index-forming…
58. Equity financing Provision of capital through the sale of common or preferred stock to investors.
59. Exchange An exchange generally occurs when one company acquires another. The shareholders of the acquired company are often given the option to sell their shares…
60. Financial liquidity An entity’s ability to obtain funds to meet its cash flow obligations, with consideration for the speed with which such funds can be obtained.
61. Financial markets Markets where financially settled products (instruments) are traded (bought and sold).
62. Financial transaction A transaction that involves only the exchange of money, with no physical delivery.
63. Financial transmission right A contract that entitles the holder to receive or pay compensation for transmission charges that arise when grid congestions cases price differences due…
64. Financially settled Consummated exclusively by an exchange of funds, without the potential of exchange – or actual exchange – of commodities or other things of value.
65. Firm transportation Energy network service assuring market participants of a specified quality and quantity of service under normal operating conditions.
66. First Contingency Reliability Criteria The requirement that an electric system be planned and operated so that it can safely withstand the loss of the largest single system element (i.e.
67. Fixed price transactions Buying or selling a commodity at a fixed price. For example, fixed physical gas prices are used to form indices at some locations; and fixed basis prices…
68. Floating price transactions Buying or selling a commodity at a price that is not fixed and will be set by mutual agreement, usually based a published price index.
69. Floating Storage Use of LNG tanker ships for LNG storage, rather than simply for transportation, to take advantage of temporal and geographic LNG price differences.
70. Forward price curve The set of prices of contracts for delivery of a good over a span of time in the future.
71. Fuel-adjustment clause A provision of a power sales agreement or rate schedule that allows for the electricity price to be changed based on changes in the price of the fuel used…
72. Futures market A market in which contracts for future delivery of a commodity or a security are bought and sold.
73. Gas turbine A type of turbine in which combusted, pressurized gas is directed against a series of blades connected to a shaft, which forces the shaft to turn to…
74. Generation The electricity generated by a system as recorded by a KWH meter, recorded in KWH or MWH.
75. Generator A device for converting mechanical energy to electrical energy.
76. Gigawatt (GW) (GW) A unit of power equal to 1 billion Watts; 1 million kilowatts, or 1,000 megawatts.
77. Globex (GW) (GW) The electronic trading platform for the Chicago Mercantile Exchange (CME). Since Sept.
78. Heat rate The ratio of fuel energy input as heat per unit of net work output; a measure of a power plant thermal efficiency, generally expressed as Btu per net…
79. Heating degree days (HDD) (HDD) A measure of heating demand equal to the number of degrees a location’s mean daily temperature was below 65 degrees Fahrenheit.
80. Hedging Hedging is an investment technique designed to offset a potential loss on one investment by purchasing a second investment that you expect to perform in…
81. Henry Hub A location near the coastal town of Egan, LA and the Texas border where more than a dozen major natural gas pipelines converge and exchange gas.
82. Hirschman-Herfindahl Index (HHI) Market share analysis (HHI) The sum of the squares of the market shares of firms competing in a market. HHI is a commonly accepted measure of market concentration.
83. Hub A network device that connects multiple computers/peripherals together and allows them to share data.
84. Imbalance energy Discrepancy between the amount that a seller contracted to deliver and the actual volume of power delivered.
85. Independent System Operator (ISO) (ISO) An independent, Federally regulated entity established to coordinate regional transmission in a non-discriminatory manner and ensure the safety and…
86. Index Statistical measure of the state of the stock market or economy based on the performance of stocks or other components.
87. Injection season The period from April 1 through October 31, during which gas is injected into natural gas storage reservoirs in preparation for withdrawal and use during…
88. Installed capacity The total capacity of electrical generation devices in a power station or system.
89. IntercontinentalExchange (ICE) (ICE) An exempt exchange under CFMA 2000. It is exempt from many reporting requirements that are required of Nymex.
90. Interruptible or nonfirm transportation Transmission service that is reserved and scheduled on an as–available basis and is subject to curtailment or interruption.
91. Intertie The point of physical interconnection between adjacent transmission systems.
92. Kilowatt (kW) (kW) A standard unit of electrical power equal to one thousand watts, or to the energy consumption at a rate of 1000 Joules per second.
93. Kilowatthour (kWh) (kWh) A measure of electricity defined as a unit of work or energy, measured as 1 kilowatt (1,000 watts) of power expended for 1 hour.
94. Liquefied natural gas (LNG) (LNG) Reducing the temperature of natural gas to -259 degrees Fahrenheit at atmospheric pressure will convert the gas into a liquid, with a volume about 1/600…
95. Load Commissions charged on the purchase or sale of mutual fund units.
96. Load control The process of managing demand requirements in order to achieve a desired load pattern.
97. Load factor The ratio of average energy demand (load) to maximum demand (peak load) during a specific period.
98. Load pocket An area often dependent on transmission for reliable electric system operation because the area’s load often exceeds the generation in the area.
99. Load Shedding Turning off or disconnecting loads to limit peak demand.
100. Load-serving entity (LSE) (LSE) Any entity, including a load aggregator or power marketer, that serves end-users within a control area and has been granted the authority or has an…