Energy Glossary

The energy industry uses a lot of terms, phrases and abbreviations. You’ve probably seen a few of them on your energy bill. We hope this convenient glossary provides some clarity as you try to find the best energy plan for your home or business.


A practice that allows marketers and local governments to pool the electric or natural gas consumption of multiple customers, or residents as in the case of local governments, in order to purchase the electricity or natural gas at a bulk rate.

Balance Forward

The remaining amount that was not paid on the previous bill and was carried over to the current bill. This may include an unpaid balance, returned check charges, late payment fees or other adjustments. If your previous bill has been paid in full, your balance forward will be zero dollars.

Budget Billing

Program offered by regulated electric companies that spreads out the cost of energy used during high-demand times of the year.

Bulk Power System

The electrical generation resources, transmission lines, and interconnections with neighboring systems, and associated equipment, generally operated at voltages of 100 kilovolts (kv) or above.


The capability to generate electrical power, usually measured in megawatts (MW) or kilowatts(kW).


The carrier owns the pipes and wires through which the energy flows. They still need to acquire energy from an outside source before they deliver it to a home or business. Once you sign up for a plan with your new alternative energy supplier, they will connect with your local utility “carrier” who delivers the energy to your home or business.


The rate at which energy is being used (measured in kW). Measuring demand allows local utility companies to anticipate and plan for the maximum electrical needs of all users in the area. This ensures that facilities are properly sized to handle customer energy needs and that individual customers are charged fairly based on energy capacity requirements.

Demand-Side Management

The use of processes and equipment to reduce the use of electricity or to shift use away from periods of high electrical demand.

Distribution Customer Charge

Independent of your electricity consumption. This charge typically covers the fixed costs associated with rendering electrical service, such as billing and customer service.

Distribution System

The poles, wires, and transformers used to deliver electric energy from a bulk power supplier to the consumer.


An unplanned event that produces an abnormal system condition on the EPS, a power supply unit, as in the sudden failure of generation or interruption of load.

Electric Current

The flow of electrons through a wire or other conductor.


The most common energy source that powers most of the things we use on a daily basis—including lights, heat and air conditioning, computers and TV’s, most major appliances and anything else that plugs into an energy outlet.


The actual quantity of electricity used during the billing period, measured in KWh.

Energy Policy Act of 2005 (EPAct 2005)

A federal law signed in 2005, the act was intended to establish a comprehensive, long-range energy policy. It provides incentives for traditional energy production as well as newer, more efficient energy technologies, and conservation.

Energy Storage

A device capable of absorbing voltage for future use (i.e. a battery).

Federal Energy Regulatory Commission (FERC)

An agency of the federal government responsible for regulation of electric utility installations and wholesale services used in interstate commerce.

Fossil Fuel

Materials such as coal, oil, or natural gas that were formed in the ground millions of years ago from plant and animal remains and are now used to produce heat or power; also called conventional fuels.


A device that converts mechanical energy into electrical energy.


An interconnected system of electric cables and power stations that distributes electricity over a large area.

ICC - Illinois Commerce Commission

Balances the interests of consumers and utilities to ensure adequate, efficient, reliable, safe and least-cost public utility services.

Kilovolt (kv)

1,000 volts. The amount of electric force carried through a high voltage transmission is measured in kilovolts.

Kilowatt (kW)

The amount of electricity being used is measured in Kilowatts.

Kilowatt Hour (kWh)

Energy companies measure how many kilowatts are used each hour. This is called a Kilowatt hour. A 100 Watt light bulb takes 1 kwh or 1,000 watts to keep the light on for 10 hours. A modern day refrigerator typically uses between 350–600 kwh per year, depending on the size and the efficiency of the particular model.


A carrier of electricity on an electric power system.


The amount of electric power drawn at a specific time from an electric power system, or the total power drawn from the system.

Load Factor

The ratio of average demand to peak demand; a measure of efficiency that indicates whether a system’s electric use over a period of time is reasonably stable, or if it has extreme peaks and valleys.

Local Utility 

Local utilities are responsible for distributing power from transmission lines to people’s homes. Your local utility is available to answer questions you have about your bill, power interruptions and energy use.

Market Rate Option (MRO)

Senate Bill 221 allowed electric companies the option to submit a plan to the PUCO for approval to move to a market-based rate structure for electric generation.

Market-Based Pricing

The basing of a longer-term contract or rate schedule on published current market pricing of competing supplies of natural gas or alternative fuels. Also known as market-responsive pricing.

Megawatt (MW)

A unit of energy equal to 1,000 kilowatts or 1 million watts.

Megawatt Hour (MWH)

A unit of energy of work equal to 1,000 kilowatt hours or 1 million watthours.


A device used to measure, display, and record the amount of power flow in kW and/or kWh, and/or energy in kWh, at a point on the electric power system.

Meter Number

A serial number assigned for both gas and electric service. Each customer has a unique meter number to track their exact energy usage for their home or business. Meter numbers are located on your bill or the meter.

Net Metering

A system that connects solar panels or other renewable energy generators to a public-utility power grid and surplus power is transferred onto the grid.  The generators are located on the customer's premises and is intended primarily to offset the customer's own electrical requirements allowing customers to offset the cost of power drawn from the utility.

North American Electric Reliability Council (NERC)

An independent organization that works to ensure that the bulk electric system in North America is reliable, adequate and secure.


A period of low system demand on the electric power system.


A temporary suspension or interruption of operation, especially of electric power, occurring when a power plant, transmission or distribution line, or other facility on the electric power system is not operating.

Peak Load

The amount of power drawn from an electric power system at the time of highest demand, measured in kilowatts or megawatts.


The condition where a generating unit is operating to provide the maximum power it is capable of producing. A generating unit that is capable of the efficient production of peaking power is characterized as a “peaking unit.”

Percentage Of Income Payment Plan Plus (PIPP Plus)

An assistance program that allows income eligible customers of regulated electric and natural gas utilities to pay a certain percentage of their gross monthly income towards their utility bills.

Price To Comp

The difference in cost of using an alternative supplier versus the cost of having power supplied by the local utility that is also delivering the energy. This provides a simple method for comparing the two prices and determining the savings amounts. The price to compare can vary from month to month based on market price fluctuations.


Term used to describe the regulated utility that produces your energy. They are responsible for generating your power, which is electricity or natural gas.

Rate Code

Specific charges for each type of energy (gas and electric) are calculated using rate codes. These codes are determined by multiple factors including: mandated tariffs on files with local regulatory agencies, residential or business usage, the type and size of the facility using the power, typical power demands at the address, the time of day of typical peak usage, the number of meters at the address, special discounts for certain types of people or groups and many other factors.

Renewable Energy Certificates (REC)

A certificate that is proof that one megawatt-hour (MWh) of electricity was generated from a renewable energy resource. Homefield Energy purchases and retires RECs based on customer’s usage for those selecting renewable energy option.


Typically requested by energy companies to recover costs for specific investments or capital improvements. The rider charges for each project will no longer appear on the bill once the approved amounts have been collected.

Solar Power

Energy from the sun’s radiance converted into heat or electricity.

Standard Offer Service

The electric generation or natural gas service a customer will receive from their local distribution utility if they do not choose a supplier. Sometimes referred to as default service.

Supplier / Energy Supplier

Buys the energy from the producer and competes for your business. The supplier prepares offers with different price and contract options.


A sudden, transient increase in the flow of electricity.


The transfer of electric current—usually in massive or bulk quantities of power, from a power plant on an electric power system to a destination that could be hundreds of miles away. Power flow can be in either direction.


Electromotive force or potential difference that pushes electricity through a wire, usually expressed in volts. Under IEEE 1547, the Distributed Resource must be able to cease to produce voltage within required clearing times set by IEEE for the capacity (size) of the specific Distributed Resource installation.


A measurement that describes how much electricity is used per second. Kilo means a thousand so one kilowatt = 1,000 watts.