Shopping for Electricity termsWe know that shopping for electricity and understanding the electricity deregulation market means understanding all of the terms and definitions that come along with it.  For many, it’ll be the first time they’re hearing of many of these terms.

Here are some commonly-used terms you might come across:

Advanced Metering Device – A tool used to keep track of electric use and communicate that information for data collection or billing rates.

Affiliated Retail Electric Provider (REP) – An electric provider that independently owned and operated by the original utility in a deregulated area.

Aggregator – An organization that is registered with an area?s regulatory system, that attempts to pull two or more customers together to purchase energy from REP?s in bulk.

Base Load – The minimum amount of energy that a company needs to consistently provide to its customers.

Broker – A broker is a business that acts as the middleman between Retail Electric Providers and other businesses, facilitating the sale of that energy.

City Owned Utility – Also know as a municipal, this is a non-profit energy company that is owned by the city or municipality that it provides it services to. In some states, these municipalities have the power to determine whether or not customers in their service region can choose their own REP.

Competitive Retailer – A certified REP that operates independently and competes for the business of area consumers by offering special rates or incentives with their energy plans.

Competitive Transition Charge – A charge that appears on every energy customer?s bill that covers the cost of accessing the electric distribution network. This fee covers the utility?s transition costs charged by the area?s Public Utility Commission (PUC).

Demand – The amount of electricity used during a single time period, measured in kilowatts or megawatts.

Deregulation – The process of reorganizing current electric services, allowing charges to be separated. This process removes the grouping of generation, transmission and distribution and allows consumers to shop for electricity generation services from different area suppliers.

Electric Cooperative – An electric cooperative, also known as a Co-op, is a customer-owned utility. That utility then distributes electricity to those who belong as members.

Electric Generation Supplier – An Electric Generation Supplier (ECS) is an entity that is licensed by the local commission to sell electricity to the public.

Electricity Facts Label –  The electricity facts label (EFL) is a standardized sheet that every Public Utility Commission (PUC) must have to disclose pertinent information on a Retail Electric Provider?s prices and services.

Fixed Price – An all-inclusive price for an energy plan that charges per kWh but that features the same price, no matter what happens to the market. This price will stay the same for at least three billing cycles or for the length detailed in the customer?s contract.

Grid – A grid is a term used to describe the network or layout of energy distribution systems throughout a given area. A grid can cover a transmission area as small as a state or as large as a country.

Generation – Generation is a term used to describe the production of electricity from a source such as coal, gas, wind or water.

Kilowatt-Hours (kWh) – The typical measurement used by energy providers to charge their customers on their bills. This is a universal measurement for electricity that is equal to one kilowatt or power for a single hour.

Local Wires Company – A Public Utility Commission-regulated business that is in charge of transmitting and delivering electricity to a person?s home or business, along the electric wires and poles in an area. This company is also responsible for maintaining and repairing this equipment.

Options Notice – An options notice is a notice sent in the mail by electricity suppliers to notify customers that their contract is about to expire. The notice is sent out at least 45 days before the contract is about to expire and it includes information on changes in the company?s plans or pricing. The notice also lets customers know what their options are and what dat they must choose one of these options.

Provider of Last Resort – A company that is in charge of providing electricity generation to customers who have not chosen another supplier.

Public Utility Commission – The Public Utility Commission (PUC) is a state-appointed regulatory organization that oversees public utilities. They are also responsible for giving out and overseeing licenses for area electric suppliers.

Renewable Resources – Naturally occurring elements such as sun, water or wind thatcan be used as sources for energy. This creates green or eco-friendly energy that can be distributed to homes and businesses.

Renewal Notice – A notice sent to customers between 52 to 90 days before their energy contract is set to expire. This notice is meant to act as a reminder for customers that their contract is ending and that they may either continue service or shop for a new provider.

Retail Electric Provider – A Retail Electric Provider (REP) is an electric provider that independently owned and operated by the original utility in a deregulated area.

Terms of Service – An agreement or contract between the customer and the energy supplier that details what is involved in the services being provided.

Transmission and Distribution Service Provider – A transmission and distribution service provider (TDSP) is a local wire company that is in charge of delivering electricity to properties along their poles. The company is also in charge of maintaining and repairing this equipment. In many states, this provider is known as the utility.

Variable Price – A per kWh price that is all-inclusive yet able to change depending on the market. This price can change hourly, daily or monthly according to the terms and conditions detailed in the disclosure statement from the supplier.

YRAC Disclosure – The YRAC Disclosure, or the ?Your Rights as a Consumer? disclosure, appears on your contract from retail energy providers. Every provider must provide their customers with this disclosure before beginning service as this document informs consumers of their rights as determined by local authorities.

Good luck on your search for electricity and better rates!