Our friends and families have told us that from time to time, we're guilty of using technical terms that normal people just don't understand. So if you're trying to speak electricity geek or your kid needs help with an electric-themed science fair project, we hope our glossary will shed a little light on things.
If you see a term that's still confusing, drop us an email or give us a call. We'll help you understand it and even update the glossary as necessary. Or if you hear a word that we don't have, let us know, and we'll add it to the list.
Advanced Meter Charge (Advanced Metering Systems Surcharge)
What our experts say: A charge assessed to recover transmission and distribution provider (TDSP) charges for Advanced Metering Systems, to the extent that they are not recovered in a TDSP's standard metering charge.
What it really means: This charge, authorized by the Public Utility Commission of Texas, allows your poles and wires company (also known as your Transmission and Distribution Provider, or TDSP) to recover the additional cost associated with deploying Smart Meters and updating the infrastructure to support Smart Meter functionality.
Often referred to as renewable energy, alternative energy is energy that comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat instead of carbon-based sources (like coal and fossil fuels). Alternative energy is renewable, since it's naturally replenished.
Average Price for Electric Service
The average price for electric service is the total of all fixed and variable recurring charges, not including state and local sales taxes, reimbursement for the state miscellaneous gross receipts tax, and any nonrecurring charges or credits, divided by the total monthly kilowatt-hours (kWh) of electric usage and expressed as a cents per kilowatt hour amount.
What it really means: On some rates, this average could change depending on when and how much you use electricity. Also, fixed charges on your bill (like demand charges for commercial accounts or a monthly customer charge) will also cause your average kWh price to vary month to month. That's why, when comparing residential rate plans, it's important to compare the rates on the Electricity Facts Label (EFL) at a specific usage level (like 1000 kWh) to make an apples-to-apples comparison.
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What our experts say: A flat fee applied each month regardless of the amount of kilowatts (kWh) used. Examples include the Base Charge, Customer Charge, or Meter Charge and these typically cover the cost of meter reading, equipment, billing and customer service.
What it really means: This is the cost to maintain your account. The base charge includes metering, distribution & transmission services, customer service and billing.Back to Top
What our experts say: The total amount of greenhouse gases produced to directly and indirectly support human activities. Carbon footprint is usually expressed in equivalent tons of carbon dioxide (CO 2 ).
What it really means: Carbon footprint is just one way of expressing how much carbon-based fuel (such as coal, oil or natural gas) it takes to do something. It's usually expressed in carbon dioxide because carbon dioxide is the gas that's created when carbon-based fuels are used to create electricity.
Competition Transition Charge
What our experts say: A charge assessed to recover transmission and distribution service provider (TDSP) charges for non-securitized costs associated with the transition to competition.
What it really means: The recovery of costs associated with deregulating the electricity market. The TDSP had to sell any generation resource they owned before the market was restructured, and these costs represent the costs associated with those sales.Back to Top
What our experts say: A charge based on the rate at which electric energy is delivered to or by a system at a given instant, or averaged over a designed period, during the billing period.
What it really means: This charge is typically applied to medium and larger commercial and industrial customer accounts, While the electricity demands of a commercial or industrial customer vary during the month depending on how and when they use electricity, the size of the transformer that serves them must be large enough to meet the customer's highest demand needs. This charge allows the transmission and distribution provider (TDSP) to recover the cost of installing the larger transformers that it takes to meet the customer's needs.
What our experts say: Since 2002, electricity deregulation has meant there is a free market for Texas electricity, and many Texans are now able to choose who they buy their electricity from. Everyone's electricity still flows across the same poles and wires maintained by the same poles and wires companies, so you should experience no change in the reliability of your service from one retail electric provider to another.
What it really means: Deregulation means you get to choose your electric company. If you live in an area that is not served by a municipal utility or rural electric co-op, you can decide which company sells you your electricity. Before 2002, it wasn't like this we were all forced to buy from whichever company was in our area.Back to Top
Electric Reliability Council of Texas (ERCOT)
The agency responsible for the reliability and security of the state's power grid. ERCOT also administers customer switching for the millions of Texans in who live in competitive choice areas.
Electric Service Identifier (ESI)
Each point of delivery receiving electricity (for example, a home, a business or a streetlight) is given a unique ESI number, often called the "Easy ID number." It's a 17- or 22-digit number printed on your bill and is used to help your electric company, your poles and wires company, and ERCOT coordinate transactions, information and billing for your location.
Electricity Facts Label (EFL)
Think of this like a nutritional facts label for electricity plans. The EFL allows you to make an educated, apples-to-apples comparison between different plans. The EFL for each rate plan outlines the pricing and terms, and includes all recurring monthly charges. If there is a cancellation fee, the EFL will list that as well.
Electrical Infrastructure / Infrastructure
The statewide system that takes electricity from generators and brings it to your home or business. This includes the giant network of wires, often called "the grid," that takes the electricity from the power plants to local substations, the poles and wires used to deliver electricity, and even the meter on your home or business.
What our experts say: A charge based on the electric energy (kWh) consumed.
What it really means: A part of your electric rate that recovers the electricity costs associated with the consumed. The unit of measurement is a kilowatt-hour (kWh).
Energy Efficiency Cost Recovery Factor
What our experts say: A charge assessed to recover transmission and distribution service provider (TDSP) costs for energy efficiency programs. This TDSP charge is a separate charge exclusively for that purpose that is approved by the Public Utility Commission.
What it really means: This charge is collected from customers and used by your transmission and distribution service provider (TDSP) to create and fund energy efficiency programs like lighting retrofits, replacement of low-efficiency heating and cooling equipment with higher efficiency units, and other projects that help reduce excessive electricity delivery demands placed on the electrical infrastructure, or the grid. Each year the TDSP provides rebates or discounts to customers who are making energy-efficient improvements until the money runs out.
ERCOT (Electric Reliability Council of Texas)
The entity responsible for the reliability and security of the state's power grid. ERCOT also administers customer switching for the millions of Texans in who live in competitive choice areas.Back to Top
First Choice Power Energy Charge
The monthly cost associated with the energy used during the billing period.
Fixed Rate Electricity Plan
What our experts say: A retail electric product with a term of at least three months for which the price (including recurring charges) for each billing period of the contract term is the same throughout the contract term, except that the price may vary from the disclosed amount solely to reflect actual changes in the TDSP charges, changes to the ERCOT or Texas Regional Entity administrative fees charged to loads or changes resulting from federal, state, or local laws that impose new or modified fees or costs on a REP that are beyond the REP's control.
What it really means: A fixed rate plan is just what it sounds like a plan that allows you to buy electricity at a fixed rate. This rate is locked in for a certain amount of time, usually between 12 and 24 months. Even if the costof electricity in the market increases, customers on fixed rate plans have peace of mind of knowing their electricity rate will stay the same. There are some circumstances when the rate can change, but that's typically limited to changes in law or regulatory-approved changes to TDSP charges, which does not occur frequently.Back to Top
Green (Renewable) Power
Renewable, sustainable energy that comes from natural resources such as sunlight, wind and hydroelectric power. Some companies call plans "green" even if just a percentage (not all) of the energy is from green sources. With First Choice Power, our green electricity plans use 100% renewable electricity.
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Indexed Rate Electricity Plan
What our experts say: The price of a retail electric product, including recurring charges, can vary according to a pre-defined formula that is based on publicly available indices or information and is disclosed to the customer, and to reflect actual changes in the TDSP charges, changes to the ERCOT or Texas Regional Entity administrative fees charged to loads or changes resulting from federal, state, or local laws that impose new or modified fees or costs on a REP that are beyond the REP's control. An indexed product may be for a term of three months or more, or may be a month-to-month contract.
What it really means: Also called an index plan, it is.a type of electricity plan in which the rate you pay for electricity is directly tied to an independent index. The index could be based on anything, but most are tied to the price of natural gas or the seasons of the year. First Choice Power doesn't think indexed rate plans are best for residential customers because if you don't keep track of the index your rate is tied to, you could end up paying more for electricity than you expected.
Investor-owned Utility / IOU
What our experts say: A publicly-owned electric utility that is rate-regulated and authorized to achieve an allowed rate of return.
What it really means: This was the typical electricity company before deregulation. Companies had a designated area, or franchise, where they were responsible for selling electricity. They owned generation plants, installed and maintained the electricity infrastructure (or "grid"), and were responsible for restoring power, reading your meter, processing billing and payments and providing customer service. Today, with electric choice, these roles and responsibilities have been split between Generators, Wholesalers, Transmission and Distribution Providers (TDSPs) and Retail Electric Providers (REPs).
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kWh (kilowatt hour)
The basic unit of measurement of electric energy. All electricity plans must list their rate in terms of kilowatt hours.
Late Payment Penalty
A charge, or fee, assessed for late payment in accordance with Public Utility Commission rules.Back to Top
What our experts say: A charge assessed to recover transmission and distribution provider (TDSP) charges for metering a customer's electricity consumption. This TDSP charge is a separate charge exclusively for that purpose and is approved by the Public Utility Commission.
What it really means: A charge assessed by your poles and wires company, TDSP, for reading and maintaining your meter each month.
Meter Reading Date
This is the date on which your meter is read by the transmission and distribution service provider (your poles and wires company). If you have an advanced meter (sometimes called a smart meter), this is the day your meter is read remotely. This is the date the previous billing month's reading ends and the next billing month's begins.
Miscellaneous Gross Receipts Tax Reimbursement
What our experts say: A fee assessed to recover the miscellaneous gross receipts tax imposed on retail electric providers operating in an incorporated city or town having a population of more than 1000.
What it really means A tax that has been in effect since May 12, 1907. The tax applies to utility companies that sell and distribute water, gas, or electricity within an incorporated city or town A retail electric provider (REP) sells electric energy to retail customers in Texas. A REP makes sales only and is subject to the tax when selling electricity within an incorporated city or town.
Monthly Base Charge: See Base Charge
An electric company that is owned and operated by a city or town. Typically, municipal utilities (or "munis," as they're sometimes called) are not open to competition. People served by a muni are not allowed to choose their electric company.Back to Top
Nuclear Decommissioning Fee
What our experts say: A charge assessed to recover a TDSP's charges for decommissioning of nuclear generating sites.
What it really means: This fee covers the costs involved in safely removing a nuclear power plant from service.
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Power Generation Company or Power Generator
The company that owns and operates the power plants, wind farms and other sources that generate your electricity.
Power Grid (The "Grid")
The giant network of wires, poles, substations and other hardware that carry electricity from the power plants to your home or business.
Public Utility Commission of Texas (PUC)
The Texas agency that sets the rates for transmission and distribution service providers and establishes reliability and safety standards. It also handles the licensing of retail electric providers and establishes and enforces competition rules for retail electric providers.
Public Utility Gross Receipts Assessment Reimbursement
What our experts say: The tax imposed on utility companies in Texas that make local sales of electricity within an incorporated city or town having a population greater than 1,000. In accordance with PUC billing guidelines, this tax is separately stated on electricity bills as a reimbursement charge.
Public Utility Regulatory Act
The legislative act that created the Public Utility Commission (PUC) of Texas in 1975.
A fee assessed to recover the statutory fee for administering the Public Utility Regulatory Act.
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Energy that comes from natural renewable resources such as sunlight, wind, tides and geothermal heat, rather than carbon-based sources such as coal, oil and natural gas.
Retail Energy Provider (REP)
The company that certified by the PUC that sells you electricity, bills you, , takes care of customer service needs, and helps you manage your account. REPs buy large volumes of electricity from generators and wholesalers and sell it to their customers. First Choice Power is a REP.
(Rural) Electric Cooperative
Consumer-owned rural electric cooperatives that handle the generation or purchase of electricity, its transmission and distribution, and customer service functions of electricity supply to consumers in rural areas. Typically, rural electric cooperatives (commonly called co-ops), are not open to competition. People served by a co-op are not allowed to choose their electric company.Back to Top
An illegal practice in which consumers are switched to a new electric company without the consumer's knowledge or permission.
Modern, electronic meters that monitor usage at a home or business. Also called Advanced Meters or Advanced Metering Systems, they can help consumers better monitor and manage their electricity usage. Consumers will have access to near-real-time information so they can make decisions that could lower their bills. Smart meters have lots of benefits, such as giving people the opportunity to pay for power in advance, making it easier for the TDSP to restore power after an outage and minimizing the human error associated with physically reading the meter.
An additional charge normally used to recover the cost of assets or expenses that were previously unanticipated but determined to be beneficial for ratepayers by the Public Utility Commission of Texas (PUC).
Changing from one electric company to another.
System Benefit Fund
What our experts say: a non by-passable charge set by the PUC, not to exceed 65 cents per megawatt hour. The fund is used to pay for low-income discounts, one-time bill payment assistance, commission administrative expenses, low-income energy efficiency programs and customer education for those in need.
What it really means: This fund is administered by the PUC to help low-income Texans with their electricity bills through discounts, weatherization programs and educational outreach. This charge is paid by all consumers of electricity in the deregulated market no matter which REP they're with.Back to Top
TDSP (Transmission and Distribution Service Provider)
What our experts say: The company that handles the physical delivery of electricity to your home or business. It is also the company that installs, maintains and reads your meter There are seven TDSP's in the deregulated Texas market.
What it really means: The poles and wires company. Electric companies like First Choice Power work with many different TDSPs to bring power to people in different areas of Texas. Your local TDSP is the company you should call first if your power goes out.
TDSP Delivery Charges
What our experts say: The total amounts assessed by a transmission and distribution service provider (TDSP) for the delivery of electricity to a customer over poles and wires and other TDSP facilities, not including discretionary charges.
What it really means: The basic charges passed on from your poles and wires company for bringing electricity to your home or business.
TDU (Transmission and Distribution Utility)
What our experts say: A charge assessed to recover transmission and distribution service provider (TDSP) charges for securitized costs associated with the transition to competition.
What it really means: A charge passed on from your poles and wires company to cover their costs of transitioning to a deregulated market.
Transmission Distribution Surcharges
What our experts say: One or more transmission and distribution service provider (TDSP) surcharges on a customer's bill in any combination.
What it really means: Non-bypassable charges established to recover reasonable and necessary costs incurred while implementing PUC required programs such as deployment of advanced meters, energy efficiency programs, etc.
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Variable Rate Electricity Plan
What our experts say: A retail product for which price may vary according to a method determined by the REP, including a product for which the price, can increase no more than a defined percentage as indexed to the customer's previous billing month's price. For residential customers, a variable price product can by only a month-to-month contract.
What it really means: A variable rate plan is just what it sounds like the rate you pay for electricity can vary from one month to the next. The rate can stay the same for months at a time, but it can go up or down depending on how much it costs to purchase electricity. Because most Texas electricity is generated from natural gas, changes in natural gas prices can change the electricity prices of variable rate plans.
People like the fact that variable rate plans are very flexible. They don't have monthly contracts or cancelation fees. But, because variable rate plans offer this flexibility, their rates are sometimes higher than the rates of a fixed rate plan.