Glossary

A cost that cannot be avoided by reducing output because the cost was incurred previously, such as the original cost of an asset (less depreciation, but including the operating and maintenance expenses and all taxes)

A mechanism requiring merchant generators to pay for expanding or upgrading the transmission grid

Price cuts or increases instituted by a regulator to "claw back" the incremental gain resulting from an underestimate of the X factor, an assumed rate of productivity increase; contract provisions that require tax incentives to be given back

The lower rate offered to a customer (generally a large industrial or commercial entity) who agrees to have electric service interrupted, usually during a high demand period

A predetermined rate offered to a customer who remains with a utility, instead of choosing another electric supplier in a competitive marketplace

An abnormal system condition that requires automatic or immediate manual action to limit or prevent loss of transmission facilities or generation supply that might adversely affect the system's reliability

incentive regulations to encourage a utility to reduce its costs

Generating electricity and thermal energy (heating and/or cooling) simultaneously

a for-profit electric utility owned by stockholders that is regulated by the state and federal governments

A social program or regulatory asset (low-income assistance, energy efficiency, etc.) that is no longer financial (i.e., no captive ratepayers to pay for the programs) in a developing or fully competitive electricity market because it would no longer be...