A Guide to commonly-used terms.


Ancillary Services – Ancillary services support the reliable operation of the transmission system as it moves electricity from generating sources to retail customers.

Association for Demand Response & Smart Grid – The Association for Demand Response & Smart Grid (ADS) is a nonprofit organization, originally formed as the Demand Response Coordinating Committee (DRCC) in 2004. It provides services to meet the needs of its members that help them in the conduct of their work and in the attainment of their personal, corporate and governmental objectives. ADS seeks to establish and grow a demand response “community” of policymakers, utilities, system operators, technology companies, consumers, and other stakeholders.

AutoDemand Response (AutoDR)– Automated Demand Response or ADR helps system operators reduce the operating costs of DR programs while increasing DR resource reliability. For customers, ADR reduces the resources and effort required to achieve successful results from these DR programs. Automation is what also makes it possible to translate changes in wholesale markets to corresponding changes in retail rates, enabling customers to respond to DR signals in real-time to reduce demand.


Backup Generator (BUG) – A generator that is used as an alternative source of power in the event of a grid emergency or demand response dispatch.

Baseload, or Base Load – Most commonly referred to as baseload demand, this is the minimum amount of power that a utility or distribution company must make available to its customers, or the amount of power required to meet minimum demands based on reasonable expectations of customer requirements.

Blackout – The total loss of electric supply to an area.

Brownout – A reduction of the voltage in the distribution system caused by overload, a failure in the distribution system, or a deliberate action by a grid operator or utility in an effort to reduce power consumption. Brownouts occur more often as an uncontrolled condition during high peak demand. Although residential customers may not experience any effect, commercial electronic equipment have voltage tolerance limitations. When voltage drops too low equipment like computer systems can experience data corruption, data loss and premature hardware failure, motors can overheat and burnout, and the longevity of other equipment may be compromised.


CAISO (California Independent System Operator) – A not-for-profit public benefit organization that independently operates California’s wholesale power grid and is responsible for maintaining reliability and directing flow in the transmission system.

Capability Period – A six-month time period established by the NYISO to facility its installed capacity markets.

Capacity Demand Curve – A curve relating the level of installed capacity to a rate of fixed-cost recovery. For low levels of fixed cost recovery, the curve is above the normal fixed costs of a “peaker plant” and for high levels is below. Modern capacity demand curves are downward sloping in the region of the regulatory target capacity level. In NYISO this curve determines fixed cost recovery from the capacity market alone, while in ISO-NE it determines total fixed-cost recovery from both markets.

Capacity Payment – A payment received in exchange for making electrical capacity available.

Carbon Footprint – The overall impact that a person, business, or organization has on the global climate in terms of the total amount of greenhouse gases produced.

Carbon Offset – A carbon offset is a credit against the emission of greenhouse gases. Offsets are purchased by businesses to counter or neutralize their own emissions so that they can achieve carbon neutrality.

CCX – Chicago Climate Exchange.

Congestion – A condition that is characterized by the inability to supply an area with the cheapest available generation due to capacity constraints of transmission paths.

Connected Load – The sum of demand ratings for all of a facility’s electric consuming equipment.

Continuous Commissioning (CCx) – Continuous commissioning refers to the ongoing evaluation of a building’s energy consumption to ensure that it continues to perform as designed. Many new buildings have a tendency to drift away from their optimal mode of operation. With continuous commissioning, engineers monitor the buildings regularly to ensure that energy consumption is optimal.

Corporate Social Responsibility (CSR) – Corporate Social Responsibility encourages organizations to consider the interests of society by taking responsibility for the impact of the organization’s activities on customers, employees, shareholders, communities, and the environment in all aspects of their operations. Many companies will publish their commitment to CSR as part of their overall mission or vision.

Curtailable Load – The amount of electric demand (kW) that a facility is able to reduce at will.

Curtailment – The process of decreasing electric demand.

Curtailment Service Provider (CSP) – A company authorized to act as an interface party between the independent system operator and end-use customers to deliver demand response capacity; also Demand Response Provider.


Demand Charge – Part of an electric service charge that is based on the maximum peak demand (kW) by the facility over the billing period.

Demand Response – The reduction of electrical consumption at the end-use customer level in response to high wholesale electricity prices, system resource capacity needs, or system reliability events. This reduction can be achieved through curtailment (e.g., turning off lights, raising temperature setpoints) or self-generation (e.g., turning on backup generators). End-users may receive payments for participating in demand response programs. Demand Response programs address supply and demand issues and present a win/win/win opportunity for regulators, utilities, and end-users by increasing grid reliability while helping to keep energy prices low.

Demand Response Dispatch – A specific period of time when the demand response program administrator (ISO, utility) calls for load curtailment from its program participants.

Demand Response Provider (DRP) – A company authorized to act as an intermediary between the independent system operator and end-use customers to deliver demand response capacity; also Curtailment Service Provider.

Demand-Side Management (DSM) – The planning, implementation, and monitoring of strategies designed to reduce or shift electric consumption or improve energy efficiency at an end-user facility; usually refers to utility-administered programs.

Distributed Energy (DE) – Synonymous with Distributed Generation.

Distributed Generation (DG) – Electricity generation that is located close to the loads being served.

Distribution – The delivery of energy to end-use customers from transmission facilities.


Electric Power Grid – A system of power providers (generation) and consumers connected by transmission and distribution lines and operated by one or more control centers.

Electric Reliability Council of Texas (ERCOT)– ERCOT is a not-for-profit Corporation in Texas responsible for reliability and operations management of the electric grid in most of Texas. (ERCOT) manages the flow of electric power to 23 million Texas customers – representing 85 percent of the state’s electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects 40,500 miles of transmission lines and more than 550 generation units. ERCOT also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for 6.7 million premises in competitive choice areas. ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. ERCOT’s members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities (transmission and distribution providers), and municipal-owned electric utilities.

End-user – The ultimate consumer; a business or individual that purchases electricity for its own consumption.

Energy Efficiency – The reduction of electrical consumption via upgrades and/or retrofits while retaining the same output or performance.

Energy Efficiency Credit (EEC) – Energy efficiency credits, like renewable energy credits, embody the non-physical property rights to the environmental benefits associated with energy efficiency measures (i.e. the non-generation of environmental pollutants). These credits can be sold to transfer the value of the environmental benefits to other products.

Energy Efficiency Portfolio Standard (EEPS) – Energy Efficiency Portfolio Standard is a regulatory policy that requires electricity service providers to meet a portion of their annual increase in electricity demand through energy efficiency measures. EEPS establishes a market standard, then relies on service providers to meet that standard.

ENERGY STAR – An EPA-backed program helping businesses and individuals protect the environment through superior energy efficiency.


Federal Energy Regulatory Commission (FERC) – An independent federal agency within the United States Department of Energy that regulates the interstate transmission of natural gas, oil, and electricity.


Generation – The process of producing electric energy or the amount of electric energy produced (kWh).

Generation Capacity – The maximum output (MW) that generating equipment can supply to system load.

Greenhouse Gas (GHG) – Greenhouse gas traps solar energy in the atmosphere and contributes to the greenhouse gas effect, which is widely suspected to cause global warming. The most critical greenhouse gases are carbon dioxide and methane.


Independent Electricity System Operator (IESO) – A not-for-profit corporation responsible for directing the operation and maintaining the reliability of the electric grid in Ontario, Canada.

Independent System Operator (ISO) – An independent organization that is responsible for coordinating, controlling and monitoring the operation of the electrical power system in a particular geographic area; similar to Regional Transmission Organization.

Independent System Operator, New England (ISO-NE) – A not-for-profit corporation responsible for the day-to-day reliable operation of New England’s bulk power generation and transmission system; oversight and fair administration of the region’s wholesale electricity markets; and management of a comprehensive regional bulk power system planning process.

Installed Capacity (ICAP) – The measure of an energy market’s combined electric generating and demand response reduction capacity, usually measured in megawatts (MW) determined by either the full nameplate output of a generating asset or the demand reduction capability of a demand response resource.

Installed Capacity/Special Case Resources (ICAP/SCR) – A program sponsored by NYISO to provide the opportunity for demand response resources to help meet state supply requirements for a specified contract period.

Internet-Based Communication System (IBCS) – Metering system that is capable of measuring electric consumption and transmitting the data to ISO New England in 5-minute intervals; required for ISO-NE demand response program participation.

Interruptible Load – The end-user load that can be interrupted through customer action at the time of annual peak load at the request of the system operator.

IOU – Investor-owned utility.

IPP – Independent Power Producer.

ISO 14064 – ISO 14064 is a standard, published by the International Organization for Standardization, that specifies the principles and requirements for quantifying and reporting greenhouse gas emissions and removals.

ISO 50001 – ISO 50001 is a standard published by the International Organization for Standardization that specifies the principles and requirements for energy management throughout a business or organization.


kVA – Kilovolt-ampere.

kW – Kilowatt.

kWh – Kilowatt-hour.


Leadership in Energy and Environmental Design (LEED) – The Leadership in Energy and Environmental Design Green Building Rating System™ is the nationally accepted benchmark for the design, construction, and operation of high performance green buildings.

Load – The amount of electric power delivered or required at any specific point or points on a system.


Measurement and Verification (M&V) – Measurement and Verification refers to the process and activity associated with ensuring a particular energy efficiency measure or system improvement is producing the expected results.

Megawatt (MW) – One million watts of electricity.


NASEO – National Association of State Energy Officials.

NEPOOL – The New England Power Pool.

New England Power Pool (NEPOOL) – A group of participants who participate in New England’s bulk electric power market and, together with ISO-NE, is responsible for managing the region’s electric bulk power generation and transmission systems.

New York Independent System Operator (NYISO) – A not-for-profit corporation that administers the state’s wholesale energy markets and operates the state’s high voltage transmission system; NYISO is responsible for ensuring that the electric grid is stable and that supply is able to meet demand at all times throughout New York State.

New York Mercantile Exchange (NYMEX) – An exchange that trades futures and options contracts of various commodity products including energy commodities like natural gas, electric, crude oil, and other commodities.

New York State Energy Research and Development Authority (NYSERDA) – NYSERDA is a public benefit corporation that funds research into energy supply and efficiency throughout New York State.

NOC – Network Operations Center.

North American Energy Standards Board (NAESB) – The North American Energy Standards Board (NAESB) serves as an industry forum for the development and promotion of standards which will lead to a seamless marketplace for wholesale and retail natural gas and electricity, as recognized by its customers, business community, participants, and regulatory entities.

North American Electric Reliability Council (NERC) – A voluntary organization whose mission is to ensure that the bulk electric system in North America is reliable, safe, and secure.


Off-peak – Period of relatively low system demand; periods are designated by utilities individually.

On-peak – Period of relatively high system demand; periods are designated by utilities individually.

Open Automated Demand Response (OpenADR) is an open and standardized way for electricity providers and system operators to communicate DR signals with each other and with their customers using a common language over any existing IP-based communications network, such as the Internet.


Peak Demand – The maximum electric load at a specified point in time.

Peak Load Management Alliance (PLMA) – A not-for-profit organization dedicated to creating a community of expertise on demand response and its role in creating efficient electricity markets.

Peaking Capacity – Capacity of generating equipment normally reserved for operation during the periods of highest loads.

Peaking Plant – A power plant that normally operates only during peak load periods.

PG&E – Pacific Gas and Electric Company.

PJM Interconnection (PJM) – PJM is an RTO that ensures the reliability of the largest centrally dispatched control area in North America by coordinating the movement of electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

Power Factor – The ratio of real power (kW) actually used in an electrical circuit to apparent power (kVA), the power being drawn from the power source.

Price Response – The reduction of electrical consumption at the customer level in response to wholesale electricity price signals.


RCx – Retro-Commissioning.

Regional Greenhouse Gas Initiative (RGGI) – The Regional Greenhouse Gas Initiative is a cooperative effort by Northeastern and Mid-Atlantic states to reduce carbon dioxide emissions.

Regional Transmission Organization (RTO) – An independent organization that coordinates, controls, and monitors the operation of the electrical power system and supply in a particular geographic area; similar to Independent System Operator.

Reliability – The North American Electric Reliability Council (NERC) defines reliability as comprising: security, which describes the ability of the electrical grid to withstand disturbances (contingencies) and adequacy, which represents the ability of the electrical grid to meet the aggregate power and energy requirement of all consumers at all times.

Renewable Energy Credit (REC) – Renewable energy credits, like energy efficiency credits, are the non-physical property rights to the environmental benefits associated with renewable energy production. RECs can be sold to transfer the value of the environmental benefits to other owners.

Renewable Portfolio Standard (RPS) – Renewable Portfolio Standard is a regulatory policy that requires the increased reliance on renewable resources to meet the energy needs of a particular jurisdiction. An RPS essentially establishes a market standard, then relies on the private sector to meet that standard.

Reserve Margin – The amount of unused available capability of an electric system as a percentage of total capability.


Spinning Reserve – The reserve generating capacity running at zero load and synchronized to the electrical system.


Transmission – The flow of electricity over interconnected electric lines from a generation facility to local distribution lines.


Unforced Capacity – UCAP represents the amount of installed capacity (ICAP) that is actually available at any given time. It also is the unit used for buying and selling ICAP. UCAP is the percentage of ICAP available after a unit’s forced outage rate is calculated. Each month a generating unit submits data that profiles the unit’s performance. If a unit was unavailable due to a forced outage (e.g., pump failure) for 10% of the hours in a month, the forced outage rate would be 10% and therefore, only 90% of the ICAP would be available.


Voluntary Market – Voluntary Market describes carbon markets in which participation is voluntary, such as the Chicago Stock Exchange. Many companies voluntarily purchase emission credits because it helps them achieve a carbon neutral image.


Watt – A unit of electrical power that equals one joule per second.