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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 …
A retail marketer is a non-utility entity that sells electric supply, natural gas supply, and other energy services directly to end-use customer …
Revenue allocation, also called cost allocation, is a step in the utility ratemaking process whereby it is determined how much of the utility’ …
A revenue requirement is the total amount of money a utility must collect from customers to pay all its costs, including its return on investmen …
Risk management refers to techniques used to control and limit an organization’s exposure to financial risks. Risk management is often used to …
A service territory defines the geographic area where a utility is allowed and required to provide services.
The voltage configuration that is provided by the utility at the customer meter is called the service voltage. In many cases, two voltages are p …
Setting the return on equity (ROE)
Return on equity, also known as ROE or the cost of equity capital, describes the return on the equity portion of the rate base that regulated ut …
Settlement refers to the calculation, billing, and invoicing of charges and payments for market services in electric or natural gas wholesale ma …
An alternative to a full-blown regulatory proceeding is a settlement. A settlement is a negotiated solution presented to the regulatory commissi …
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 …
A stranded cost refers to the amount invested in an asset that exceeds the market value of that asset.
Supply-side competition refers to competition between providers of a commodity. In natural gas markets it refers to competition between gas prod …
Tariffs are public documents, written by regulated entities and approved by the regulatory commission, that detail a utility’s rates, rules, s …
A test year is the 12-month period used in a rate case to determine a utility’s cost of service to be included in future rates.
Time-of-use rates change the price of electricity according to the time of day in which it is consumed.