But What Does It Mean??


By: Beth von Behren on October 9, 2012 Print This Post

We have written a lot, here on the Blog and in other places, about Kirkwood Electric, how it operates, how rates are set, and much more.  As a writer, I sometimes find myself writing about important issues where I don’t always necessarily understand the terminology.  I can sorta figure it out in context, but sometimes it gets to the point where I just have to shout WAIT!  HOLD ON!  What does it MEAN?

So.  I went back to Mark Petty and gave him a list of words from his blog post below (and from other utility-related articles we’ve written over the years) and asked him to give me some definitions.  The result of our collaboration on these terms is a GLOSSARY, if you will.  I intend to refer back to this information in the future whenever I need it, and I hope you will too.  Here goes…

Glossary of Terms Used in the Electric Utility Industry

Power Portfolio:  A combination of products purchased by a utility designed to deliver the energy required by its customers on a daily basis.  Examples of products typically purchased by utilities include agreements to own or buy the output from a power plant for a specified period of time.

Fixed-Price:  Fixed-price refers to a single rate for the purchase of a product over a given time period.  An example of a fixed rate product would be the acquisition of 25 MW (megawatts) of power delivered over an entire week for the same price every hour.  Fixed-price products are used by buyers and sellers to remove any risk or guess-work out of the transactions’ value.

Variable-Price:  Variable price refers to a fluctuating or moving price for the purchase of a product over a given time period.  An example of a variable rate product would be the acquisition of 25 MW of power delivered over an entire day for a different price every hour.  Variable price products can be lower than fixed price products during low usage periods but may have a higher price than a fixed price product during high usage periods.

Load:  The total amount of energy used by a utility’s customers over a given time period.

Base Load:  Utility customers use different amounts of power during different hours of the day.  Homeowners usually use significantly less power at night and early in the morning when they are sleep.  During the day they then use more energy for lighting, appliances, heating, and cooling.  The base load is the minimum amount of power used by a utility’s customers and is typically represented by the amount of their nighttime or early morning usage.

Margin:  The difference between what a utility charges for delivering electricity to its customers and the amount of money it costs to deliver that electricity.

Power Markets:  The place where buyers and sellers bid on or negotiate prices for the delivery of a product.

Okay, that’s it for now, but if we think of any other terms, we’ll update this post.  Likewise, if you come across a utility term you don’t recognize or understand, write it here in the comments area and we will get you a definition and add it to the list.



Written by Beth

Beth von Behren is the Public Information Officer for the City of Kirkwood. She manages the City Website (KirkwoodMO.org) and writes/edits both the monthly “Eye on Kirkwood” (published on the last Friday of the month inside the “Webster-Kirkwood Times”) and the every-other-weekly e-newsletter “Kirkwood Happenings.” To sign up for the e-newsletter, send an email to Info@KirkwoodMO.org.

Website: http://www.kirkwoodmo.org