Coming to Terms with Electricity

Amperage. The amount of electrical current that is flowing through a circuit, or the maximum amount of current that a circuit can handle safely. It is measured in amperes, or amps.

Capacity. The need to have enough generating resources available to match demand at all times. In some markets, capacity is a demand-based cost, meaning interval-metered customers may have some ability to manage this cost by reducing demand during certain peak periods.

Circuit. A path for transmitting electric current. Every circuit includes a power source, an energy-using device and a connecting wire or power line.

Coincident Peak, or CP. A peak period used in capacity calculations.

Current. The flow of electric charge through a circuit. Direct current, or DC, moves continuously in one direction. Alternating current, or AC, changes direction many times per second.

Demand. The rate at which a device, building or facility consumes electricity at a specific point in time. Demand is typically measured in kilowatts, or kW. For large business customers, demand can be an important driver of utility delivery charges and certain market-based costs.

Demand Response, or DR. Demand response can involve reducing or shifting electricity use during certain market or grid conditions.

Deregulation. In deregulated electricity markets, customers may be able to choose who supplies the generation portion of their electricity. The local utility generally remains responsible for distribution activities such as maintaining lines, reading meters and responding to outages.

Distribution. The final stage of power delivery. A distribution system includes substations, distribution lines, transformers and other equipment that delivers electricity to customers at the appropriate voltage.

Distribution lines. Lower-voltage power lines that are often supported by wood poles and deliver power to homes and businesses.

Distribution losses, or D-Losses. Energy lost through the distribution system, including step-downs at substations and transformers that lower voltage for customer meter use.

Energy. The standard measure of electricity usage, usually measured in kilowatt-hours, or kWh.

Generation. Electricity created by a generator, which converts another form of energy into electricity. Utility-scale generation can come from sources such as fossil fuels, falling water, solar and wind energy and nuclear reactions.

Grid. A network of power plants, substations, transformers, power lines and other equipment that delivers electricity from the source of generation to customers.

Ground. A common return path for electric current in a circuit. Exposed conductive parts of electrical equipment are connected to ground to help protect users from potential shock hazards.

Interconnection. The U.S. electric grid includes three major regions: the Eastern Interconnection, the Western Interconnection and the Electric Reliability Council of Texas, or ERCOT. Each region contains interconnected local utility grids.

Interval metered. A metering setup that records electricity usage in intervals. For some large customers, interval data can help support more detailed analysis of usage patterns, peak demand and certain market-related costs.

Kilowatt, or kW. A unit of power equal to 1,000 watts. For business customers, kW is often used to measure demand.

Kilowatt-hour, or kWh. A unit of electricity use. One kWh represents the use of one kilowatt of electricity for one hour. For example, using 1,000 watts for one hour equals one kWh.

Megawatt, or MW. A unit of power equal to one million watts, or 1,000 kilowatts.

Megawatt-hour, or MWh. The use of one megawatt of electricity for one hour. MW and MWh are not the same: MW measures the rate of power, while MWh measures electricity used over time.

Load. The amount of electric power required to meet customer usage across a given time period.

• Load factor.The ratio of average demand to peak demand. It is a measure of how efficiently a customer uses electricity and whether usage is relatively stable or has sharp peaks and valleys.
• Base load.The minimum level of electricity needed on a constant basis.
• Peak load.The amount of power drawn from the electric system at the time of highest demand. Peak load is measured in kW or MW.
  • Daily peak.The greatest amount of electricity used during a defined period in a day, such as one hour, half-hour or quarter-hour.
  • On-peak.A period of high system demand on the electric power system.
  • Off-peak.A period of lower system demand on the electric power system.

Meter. A device used to measure, display and record the amount of power flow or energy used at a location.

Microgrid. A localized grid powered by distributed generators, batteries or renewable sources. A microgrid can operate as part of the larger grid or as an independent source of electricity.

Phase. The distribution of an electrical load in a circuit. Single-phase circuits have one power wire and one neutral wire. Three-phase circuits have three power wires carrying the load and are commonly used for larger commercial and industrial equipment.

Power factor. The difference between real power, which electric devices use to operate, and apparent power, which includes additional power required by some equipment. A low power factor can indicate less efficient use of electrical capacity.

Smart grid. A set of advanced technologies — such as smart meters, sensors, microgrids and energy storage — designed to improve grid connectivity, efficiency and reliability.

Substation. A set of equipment that increases voltage for transmission or reduces voltage for distribution to customers.

Switchgear. A set of circuit protection devices, such as breakers, fuses and switches, housed in a metal structure designed to control and isolate electrical equipment.

Time of Use, or TOU. A pricing structure where electricity costs vary by time period, such as on-peak and off-peak hours.

Transformer. A device that transfers electric current from one circuit to another, either increasing, or stepping up, voltage or reducing, or stepping down, voltage.

Transmission. The movement of electricity from where it is produced to a local distribution system. Transmission lines carry high-voltage power over long distances to distribution substations.

Transmission lines. High-voltage power lines that are often supported by large metal towers.

Transmission losses, or T-Losses. Energy lost through transmission lines, transformers and related equipment, mostly dissipated as heat. The farther electricity travels along transmission lines, the larger the potential loss.

Usage. The amount of electricity consumed over time, typically measured in kWh on customer bills.

Utility. The company responsible for delivering power to customers in its service territory. In deregulated markets, the utility typically remains responsible for distribution, including maintaining lines, trimming trees, reading meters and supporting outage response.

Voltage. The force that pushes electricity through a wire or other conductor. It is measured in volts.

Voltage level. A service classification that may include transmission, substation, primary or secondary voltage. Loss factors may vary by utility and voltage level.

Voltage loss factor. A factor that reflects the percentage of energy lost through transmission and distribution losses.

Watt. The basic unit of electric power. A 40-watt lightbulb draws 40 watts of power while operating.

See this glossary of electric industry terms from the U.S. Energy Information Administration for more information.