Markets

Page 6 of 7

Renewable energy credit (REC)

A renewable energy credit, commonly called a REC, is a tradeable financial instrument that allows the owner of a renewable facility to sell the …

Renewable portfolio standard (RPS)

A renewable portfolio standard, often called an RPS, is a regulatory requirement obligating utilities, generation authorities, or load-serving e …

Replacement reserve

Replacement reserve comprises units that are available with a longer lead time than other reserves, commonly 30 minutes from notification.

Reserve margin

The long-term balance of electric supply and demand in a specific market region is evaluated by looking at the reserve margin. It is calculated …

Residential customer class

Gas and electric utility rate structures and regulatory rules typically classify residential customers as a unique class that includes houses, a …

Retail marketer

A retail marketer is a non-utility entity that sells electric supply, natural gas supply, and other energy services directly to end-use customer …

Risk management

Risk management refers to techniques used to control and limit an organization’s exposure to financial risks. Risk management is often used to …

Service territory

A service territory defines the geographic area where a utility is allowed and required to provide services.

Settlement (billing)

Settlement refers to the calculation, billing, and invoicing of charges and payments for market services in electric or natural gas wholesale ma …

Single buyer with competitive generation electric market model

Under the single-buyer electric market model, the utility company creates a supply purchasing group whose job is to competitively procure supply …

Southwest Power Pool (SPP)

SPP is a regional transmission organization (RTO) that coordinates dispatch and transmission of wholesale electricity in parts of 14 states.

Spark spread

The spark spread is a quantity that represents the difference between the wholesale market price of electricity and the cost of producing electr …

Speculation

Speculation is the act of taking on risk with the goal of making money.

Spinning reserve

Spinning reserves are units (or portions of units) that are not putting energy onto the grid but are synchronized to the frequency of the system …

Spot market

In the energy business, a spot market is a commodities market in which the commodity is sold for cash and is delivered to a specific location fo …

Stranded costs

A stranded cost refers to the amount invested in an asset that exceeds the market value of that asset.

Supply-side competition

Supply-side competition refers to competition between providers of a commodity. In natural gas markets it refers to competition between gas prod …

Tennessee Valley Authority (TVA)

TVA is owned by the United States government. TVA provides wholesale electricity in seven southern states as well as services such as flood cont …

Trading arrangements

Trading arrangements define how business transactions are performed to allow energy, reserves, and other ancillary services to be acquired by ma …

Transmission company

Transmission companies, or transcos, are independent owners of transmission facilities. They are commonly investor-owned, and like IOUs operate …