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In reference to electricity, the maximum load that a generating unit or generating station can carry under specified conditions for a given period of time without exceeding approval limits of temperature and stress.
- Browse Related Terms: Balancing, baseline, Baseload, Capacity, Capacity markets, load, Load Factor, Peak load, peak demand, Real-time pricing, Time-of-use pricing
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Average output compared to maximum potential output over a given period of time, usually expressed as a fraction. For example, a generating facility that operates at an average of 60% of its normal full-power capacity over a measured period has a capacity factor of 0.6 for that period. It can apply to an individual generating unit or a collection.
- Browse Related Terms: Ancillary services, Automatic generation control, availability, Baseload Unit, Capacity factor, Control area, Financial liquidity, Fuel-adjustment clause, Installed capacity, Load pocket, Mothballed capacity, Peaking capacity, Plant factor, Ramp rate, Reliability must run (RMR), Retail unbundling, Voltage reduction, Wholesale electricity markets
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The amount of capacity above planned peak system demand available to provide for scheduled maintenance, emergency outages, system operating requirements, and unforeseen demand.
- Browse Related Terms: Capacity margin, congestion, Critical notices, Curtailable load, First Contingency Reliability Criteria, Independent system operator (ISO), Interruptible or nonfirm transportation, Intertie, Load-serving entity (LSE), Loop flow, Marginal electric generating unit, Native load, Operating reserves, Outage, Regional Transmission Organization (RTO), Transmission loading relief (TLR)
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A market for the trading of capacity credits (the ability to produce electricity in the market area during a defined period) usually between parties obligated to deliver electricity to customers and power plant owners.
- Browse Related Terms: Balancing, baseline, Baseload, Capacity, Capacity markets, load, Load Factor, Peak load, peak demand, Real-time pricing, Time-of-use pricing
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A market where market participants execute all transactions with the central entity operating under a set of rules (product specifications, execution procedures, credit requirements, dispute resolution, code of conduct, etc.) that apply to a range of products offered to this entity. (e.g., Nymex under CFTC jurisdiction is one such market, regional transmission organizations (RTOs) and independent system operators (ISOs) who run markets under FERC jurisdiction can also be considered centralized exchanges).
- Browse Related Terms: Bilateral transaction, Centralized Exchange, Counterparty, Credit clearing, Credit score, Globex (GW), New York Mercantile Exchange (Nymex), Nymex ClearPort, Ring-fencing, Safe harbor, Transaction costs
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Generally refers to the location at which gas changes ownership or transportation responsibility from a pipeline to a local distribution company or gas utility.
- Browse Related Terms: Automated mitigation procedure, City Gate, Congestion costs, Electric utilities, Firm transportation, Local distribution company (LDC), Locational installed capacity, North American Electric Reliability Council (NERC), open access, Peakshaving LNG facility, Transmission, Usage charge
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The registration and settlement of a trade that includes provisions for margin requirement and performance guarantee.
- Browse Related Terms: clearing, Equity financing, Nitrogen oxide (NOx), NOx Budget Trading Program (NBP), NOx State Implementation Plan (SIP), Power purchase agreement, Sulfur dioxide (SO2)
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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 cased and perforated wells used to produce conventional natural gas.
- Browse Related Terms: Bus, Coalbed methane, Combined-cycle generators, Combined-cycle power plant, Combustion turbine, Distillate fuel oil, Dual-fueled (or dual-fired) unit, Generation, Generator, Heat rate, Merchant generator, Residual fuel oil, Steam plant, Turbine, Unconventional natural gas
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Security, cash or something of value, deposited by the party owing money to the party to whom money is owed, to help assure that payables will be paid when due. The collateral is called for when the pre-established credit limit has been reached. In commodity markets, such payables arise from every physical or financial transaction where cash is paid upfront. Margin at a futures exchange is one form of collateral.
- Browse Related Terms: Collateral, Credit, Credit risk, Financial markets, Financial transaction, Financially settled, IntercontinentalExchange (ICE), Margin requirement, Open outcry, Price discovery, Risk Management
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- See Combined-cycle Power Plant.
- Browse Related Terms: Bus, Coalbed methane, Combined-cycle generators, Combined-cycle power plant, Combustion turbine, Distillate fuel oil, Dual-fueled (or dual-fired) unit, Generation, Generator, Heat rate, Merchant generator, Residual fuel oil, Steam plant, Turbine, Unconventional natural gas
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A power plant that uses two thermal cycles for producing electricity. The first cycle burns a fuel inside a gas turbine, and the gas turbine drives an electric generator. In the second cycle, hot exhaust gases from turn water into steam, and a steam turbine turns a second electric generator. Combined-cycle power plants are the most efficient commercial technology currently available for producing electricity. They can use a wide variety of liquid and gaseous fuels, but most plants in the United States burn natural gas.
- Browse Related Terms: Bus, Coalbed methane, Combined-cycle generators, Combined-cycle power plant, Combustion turbine, Distillate fuel oil, Dual-fueled (or dual-fired) unit, Generation, Generator, Heat rate, Merchant generator, Residual fuel oil, Steam plant, Turbine, Unconventional natural gas
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An engine, similar to a jet engine, that burns fuel to produce a large volume of exhaust gases that expand through a series of precision blades to rotate a shaft. The shaft may turn an electric generator; such plants can be built at a lower cost than other large power plants, but they are relatively inefficient and therefore more expensive to operate.
- Browse Related Terms: Bus, Coalbed methane, Combined-cycle generators, Combined-cycle power plant, Combustion turbine, Distillate fuel oil, Dual-fueled (or dual-fired) unit, Generation, Generator, Heat rate, Merchant generator, Residual fuel oil, Steam plant, Turbine, Unconventional natural gas
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A characteristic of the transmission system produced by a constraint on the optimum economic operation of the power system, such that the marginal price of energy to serve the next increment of load, exclusive of losses, at different locations on the transmission system is unequal.
- Browse Related Terms: Capacity margin, congestion, Critical notices, Curtailable load, First Contingency Reliability Criteria, Independent system operator (ISO), Interruptible or nonfirm transportation, Intertie, Load-serving entity (LSE), Loop flow, Marginal electric generating unit, Native load, Operating reserves, Outage, Regional Transmission Organization (RTO), Transmission loading relief (TLR)
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Charges assessed and redistributed due to electricity network constraints.
- Browse Related Terms: Automated mitigation procedure, City Gate, Congestion costs, Electric utilities, Firm transportation, Local distribution company (LDC), Locational installed capacity, North American Electric Reliability Council (NERC), open access, Peakshaving LNG facility, Transmission, Usage charge
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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, the power output of the generators within the electric power system(s) and capacity and energy purchased from entities outside the electric power system(s), with the load in the electric power system(s).
- Maintain, within the limits of Good Utility Practice, scheduled interchange with other Control Areas.
- Maintain the frequency of the electric power system(s) within reasonable limits in accordance with Good Utility Practice.
- Provide sufficient generating capacity to maintain operating reserves in accordance with Good Utility Practice.
- Browse Related Terms: Ancillary services, Automatic generation control, availability, Baseload Unit, Capacity factor, Control area, Financial liquidity, Fuel-adjustment clause, Installed capacity, Load pocket, Mothballed capacity, Peaking capacity, Plant factor, Ramp rate, Reliability must run (RMR), Retail unbundling, Voltage reduction, Wholesale electricity markets
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A measure of cooling energy demand determined by how far a location's temperature averaged above 65 degrees Fahrenheit.
- Browse Related Terms: British thermal unit (Btu), Cooling degree days (CDD), Gas turbine, Heating degree days (HDD), Injection season, Liquefied natural gas (LNG), Natural Gas, Sendout, Winter heating season
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For any given transaction, there must be at least two parties to the transaction – a party and a counterparty. For a transaction with a centralized exchange, the exchange is often referred to as the central counterparty.
- Browse Related Terms: Bilateral transaction, Centralized Exchange, Counterparty, Credit clearing, Credit score, Globex (GW), New York Mercantile Exchange (Nymex), Nymex ClearPort, Ring-fencing, Safe harbor, Transaction costs
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The dollar limit or range a party is willing to extend to a counterparty for doing business or transactions without demanding cash upfront (e.g. party A may agree to grant party B a credit limit of $1 million, allowing B to owe A up to $1 million for any number of transactions. As existing obligations are paid off, B can build up its debt with A with more transactions up to the credit limit. The credit limit is usually mutual between parties. For centralized exchanges, standard credit procedures and criteria are followed, along credit collateral or margining requirements as thresholds are crossed. Increasingly, bilateral transactions also have collateral thresholds and collateral calls).
- Browse Related Terms: Collateral, Credit, Credit risk, Financial markets, Financial transaction, Financially settled, IntercontinentalExchange (ICE), Margin requirement, Open outcry, Price discovery, Risk Management
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A mechanism for settling mutual claims that shares among many parties the risk of a company failing to fulfill its contract. Markets have evolved to where most centralized exchanges have centralized clearing (e.g., Nymex; but RTO/ISOs do not), with well-defined rules and risk management mechanisms, often with regulatory oversight (CFTC and SEC in the US, FSA in the UK, etc.). Commodity Futures Exchange Act (CFMA) of 2000 further facilitates the use of centralized clearing for over-the-counter (OTC) transactions. Most centralized clearing houses operate with a layer of financially sound Futures Commission Merchants (FCM or commonly referred to as clearing members – CFTC also has oversight over these “qualified” financial intermediaries). A nonclearing-member market participant would get a credit arrangement with an FCM and get the benefits of clearing indirectly through its FCM’s participation in central clearing. Market participants in markets with multi-lateral netting resulting from centralized clearing find that they can save some 90% of credit capital required to transact. This savings enable an order of magnitude more transactions to be done for a given level of credit capital, facilitating greater market liquidity..
- Browse Related Terms: Bilateral transaction, Centralized Exchange, Counterparty, Credit clearing, Credit score, Globex (GW), New York Mercantile Exchange (Nymex), Nymex ClearPort, Ring-fencing, Safe harbor, Transaction costs
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A statistical technique wherein several financial characteristics are combined to form a single score to represent a customer's creditworthiness. A credit score provided and published by SEC approved-rating agencies (Moody’s, Standard & Poor’s, Fitch, and Toronto Dominion) relied on by providers of credit (banks, bond investors, exchanges, market participant extending credit to a counterparty) to help judge the level of credit or financing to provide to a customer or counterparty. A rating is set using financial analytical technique combined with informed judgment of qualitative factors to form a single score to represent a customer's creditworthiness.
- Browse Related Terms: Basis Swaps, Credit rating, Daily (or Next-Day) Indexes, Debt financing, Electronic trading platform, Fixed price transactions, Floating price transactions, index, Market, Market structure, Power marketer, Project financing, Spread trading, Swaps
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