NC Sustainable Energy Association

Glossary of Terms

Avoided costs – These are costs that a utility avoids by purchasing power from an independent producer rather than generating power themselves, purchasing power from another source or constructing new power plants. The North Carolina Utilities Commission calculates avoided costs for each utility, and these costs are the basis upon which independent power producers are paid for the electricity they produce. There are two parts to an avoided cost calculation: the avoided capacity cost of constructing new power plants and the avoided energy cost of fuel and operating and maintaining utility power plants.

Base load –  The minimum load experienced by an electric utility system over a given period of time.

Combined heat and power system – A system that uses waste heat to produce electricity or useful, measurable thermal or mechanical energy at a retail electric customer's facility.  [N.C. Gen. Stat. 62-133.8(a)(1)]

Demand‑side management (“DSM”) – Activities, programs, or initiatives undertaken by an electric power supplier or its customers to shift the timing of electricity use from peak to nonpeak demand periods. DSM includes, but is not limited to, load management, electric system equipment and operating controls, direct load control, and interruptible load. [N.C. Gen. Stat. 62-133.8(a)(2)]

Direct load control –Activities that can interrupt load at the time of peak by interrupting power supply on consumer premises, usually applied to residential consumers.

Electric power supplier – A public utility, an electric membership corporation, or a municipality that sells electric power to retail electric power customers in the State.  [N.C. Gen. Stat. 62-133.8(a)(3)]

Energy efficiency (“EE”) – An equipment, physical, or program change implemented after January 1, 2007, that results in less energy used to perform the same function. "Energy efficiency measure" includes, but is not limited to, energy produced from a combined heat and power system that uses nonrenewable energy resources. "Energy efficiency measure" does not include demand‑side management.  [N.C. Gen. Stat. 62-133.8(a)(4)]

Federal Energy Regulatory Commission (“FERC”) – FERC is an independent federal agency that regulates the interstate transmission of electricity, natural gas, and oil. 

Interconnection process – The physical connection of two electric systems that allows for the sale or exchange of electricity.

Interruptible load – Loads that can be interrupted in the event of capacity or energy deficiencies on the supplying system.

New renewable energy facility – A renewable energy facility that either: (a) was placed into service on or after January 1, 2007; (b) delivers or has delivered electric power to an electric power supplier pursuant to a contract with NC GreenPower Corporation that was entered into prior to January 1, 2007; or (c) is a hydroelectric power facility with a generation capacity of 10 megawatts or less that delivers electric power to an electric power supplier.  [N.C. Gen. Stat. 62-133.8(a)(5)]

Peak load – Maximum power used in a given period of time.

Power factor – The ratio of the actual power to the apparent power in an alternating current power system.

Power purchase agreement – A contract entered into by an independent power producer and an electric utility. The power purchase agreement specifies the terms and conditions under which electric power will be generated and purchased. Power purchase agreements require the independent power producer to supply power at a specified price for the life of the agreement. While power purchase agreements vary, their common elements include: specification of the size and operating parameters of the generation facility; milestones in-service dates, and contract terms; price mechanisms; service and performance obligations; dispatchability options; and conditions of termination or default.

Public Utility Regulatory Policies Act of 1978 (“PURPA”) –This federal statute requires states to implement utility conservation programs and create special markets for co-generators and small producers who meet certain standards, including the requirement that states set the prices and quantities of power the utilities must buy from such facilities.

Qualifying facility (“QF”) – Small-scale producers of commercial energy (small power production facilities) or producers who generate useable electric energy as a co-product of other activities (cogeneration) and meet certain ownership, operating, and efficiency criteria established by the Federal Energy Regulatory Commission (“FERC”) pursuant to the Public Utility Regulatory Policies Act (“PURPA”). 

Renewable energy certificate (“REC”) – A tradable instrument that is equal to one megawatt hour of electricity or equivalent energy supplied by a renewable energy facility, new renewable energy facility, or reduced by implementation of an energy efficiency measure that is used to track and verify compliance with the requirements of this section as determined by the Commission. A “renewable energy certificate” does not include the related emission reductions, including, but not limited to, reductions of sulfur dioxide, oxides of nitrogen, mercury, or carbon dioxide.  [N.C. Gen. Stat. 62-133.8(a)(6)]

Renewable energy facility – A facility, other than a hydroelectric power facility with a generation capacity of more than 10 megawatts, that either:  (a) generates electric power by the use of a renewable energy resource; (b) generates useful, measurable combined heat and power derived from a renewable energy resource; or (c) is a solar thermal energy facility.  [N.C. Gen. Stat. 62-133.8(a)(7)]

Renewable energy resource – A solar electric, solar thermal, wind, hydropower, geothermal, or ocean current or wave energy resource; a biomass resource, including agricultural waste, animal waste, wood waste, spent pulping liquors, combustible residues, combustible liquids, combustible gases, energy crops, or landfill methane; waste heat derived from a renewable energy resource and used to produce electricity or useful, measurable thermal energy at a retail electric customer's facility; or hydrogen derived from a renewable energy resource. “Renewable energy resource” does not include peat, a fossil fuel, or nuclear energy resource.  [N.C. Gen. Stat. 62-133.8(a)(8)]

Smart grid – An intelligent electric utility grid containing the following attributes: adaptive, self-healing; predictive and proactive; optimized capacity utilization and system performance; interactive with consumers and markets; and enterprise integration of information.

Supply-side management – Activities conducted on the utility's side of the customer meter. Activities designed to supply electric power to customers, rather than meeting load though energy efficiency measures or on-site generation on the customer side of the meter.

Steam electric power plant (conventional) – A plant in which the prime mover is a steam turbine. The steam used to drive the turbine is produced in a boiler where fossil fuels are burned.

Time-of-use (“TOU”) rates – Electricity prices that vary depending on the time periods in which the energy is consumed. In a time-of-use rate structure, higher prices are charged during utility peak-load times. Such rates can provide an incentive for consumers to curb power use during peak times.

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