Energy & Utilities Services

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Energy & Utilities Services
Basis - Cost difference between Henry Hub (see “Henry Hub (HH)”) and point of reference, or delivery point.
Capacity - How much maximum instantaneous energy will be needed for operations.
Commodity - The physical electrons or methane molecules.
Deregulated Market - Open market; able to “shop” commodity.
Fixed Price - Same cost for every unit of electricity or natural gas. Some or all elements (commodity, transmission, compliance, etc.) can be fixed.
Hedging - The act of fixing all or a portion of electricity or natural gas consumption.
Henry Hub (HH) - The most liquid natural gas trading hub in the US, serving as a benchmark for natural gas prices around the world.
Index - Floating, market-based rate driven by supply and demand.
Investor-Owned Utility (IOU) - Vertically-integrated, for-profit entities that own and generate power, transmit the electricity once it is generated, and then distribute it to residential, commercial, and industrial consumers.
Kilowatt (KW) - Maximum instantaneous power draw over 15-, 30- or 60-minute period.
Kilowatt-hour (kWh) - Electricity unit of measurement. 1 kilowatt-hour = 1 kilowatt of electricity consumed for one hour.
Local Distribution Company (LDC) - Entity which owns and operates the distribution system of poles, wires and/or pipes. LDCs themselves are always regulated, regardless of market.
Regional Transmission Operator (RTO) - Entity responsible for overseeing high-voltage transmission and coordination of the electricity grid, and manager of the wholesale electricity market.
Regulated Market - Closed market; commodity supplied and delivered by a Local Distribution Company (see “Local Distribution Company”). Conversely, see “Deregulated Market.”
Therm - Natural gas unit of measurement.
Time of Use (TOU) - Determining factor in pricing, generally broken down into on-peak, mid-peak, and off-peak periods.

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