Energy Glossary: Electricity & Gas Terms, Explained Simply

A broker or organization that combines many customers together to negotiate one bulk electricity rate on their behalf, rather than each person shopping individually.

The standard unit for measuring electrical current — essentially, how much electricity is flowing through a wire at a given moment.

A U.S. Department of Energy system that scores how efficiently an appliance converts energy into usable output, helping you compare products before buying.

Renewable energy generated from organic material like wood, crop waste, or other plant and animal matter.

A standard unit of heat energy, defined as the amount of energy needed to raise one pound of water by one degree Fahrenheit. Commonly used to rate heating and cooling equipment.

A company or individual that helps connect businesses with energy suppliers, without generating or selling the power itself.

A unit some utilities use to measure natural gas volume, equal to 100 cubic feet.

A safety device that automatically shuts off electricity to a circuit if it detects an overload, protecting your home's wiring and plugged-in devices from damage.

A system that produces both usable heat and electricity from the same fuel source at the same time, increasing overall efficiency.

See "Distribution Charge" below — the two terms are often used interchangeably.

The amount of electricity being used at a specific moment, typically measured in kilowatts. "Peak demand" refers to the highest usage recorded over a set period, often used to calculate certain business rates.

A market structure where the government allows residents and businesses to choose their own electricity or natural gas supplier, instead of being locked into one utility-set rate. The utility still delivers the power either way — deregulation only affects who you can buy it from.

The portion of your bill that pays your utility for physically delivering electricity or gas to your home through their poles, wires, and pipes. This charge stays the same no matter which supplier you choose.

A nonprofit, member-owned utility that provides electricity to a specific community or region, typically in rural areas.

A standardized disclosure document required in Texas by the Texas Public Utility Commission for every electricity plan, listing the price at set usage levels, contract terms, and where the power comes from — designed to make comparing plans genuinely apples-to-apples.

An assessment of how much energy a home or business uses, typically identifying specific ways to reduce waste and lower bills.

Another term for a retail energy supplier — the company that sells you electricity or gas, separate from the utility that delivers it.

The federal agency (ferc.gov) that oversees interstate electricity transmission, wholesale power sales, and natural gas pricing across the U.S.

The actual production of electricity, whether from natural gas, coal, nuclear, wind, solar, or another source.

Electricity generated from renewable, environmentally friendly sources such as wind, solar, or hydroelectric power.

The interconnected network of power lines and infrastructure that utilities use to deliver electricity across a region.

A utility company owned by private shareholders rather than the government or its own customers — the most common utility structure in the U.S.

A unit measuring the rate of electricity use or production at a given moment — essentially, how much power something draws while running.

The actual unit your electricity bill is based on: one kilowatt of power used continuously for one hour. This is the number suppliers use to calculate your rate and your total charge.

The total amount of electricity being drawn by all devices and systems in use at a given time.

A unit some utilities use for natural gas, equal to 1,000 cubic feet.

A unit of electrical power equal to one million watts — commonly used to describe power plant output or large-scale energy production.

A program in some states where a city or local government negotiates a single bulk electricity rate on behalf of all residents in that area, unless a resident opts out.

A nonprofit utility owned and operated by the city or town it serves, rather than by private investors.

A billing arrangement that lets homeowners with solar panels sell excess electricity back to the grid, often applied as a credit toward future bills.

Energy generated from finite resources that can't be replenished on a human timescale, such as coal, natural gas, or oil.

A time period when overall electricity demand is low, which can mean lower rates on certain plan types.

A time period when overall electricity demand is high, often tied to higher rates on time-of-use plans.

A temporary interruption in electricity service, usually caused by weather, equipment failure, or grid maintenance.

The rate your utility publishes as its default supply price, specifically meant to give you a benchmark for comparing competitive supplier offers against it. If a supplier's rate is lower than the price to compare, switching may genuinely save you money.

A backup supplier assigned to keep your service running if your original supplier unexpectedly exits the market.

Energy generated from sources that naturally replenish, such as sunlight, wind, or flowing water.

A certificate representing one megawatt-hour of electricity generated from a renewable source. When a supplier purchases RECs matching your usage, it certifies that an equivalent amount of clean energy was added to the grid on your behalf.

A licensed company that sells electricity directly to customers in a deregulated market. Every REP must be certified by the relevant state utility commission — in Texas, the Texas Public Utility Commission.

The portion of your bill that pays for the actual electricity or gas you used, set by whichever supplier you've chosen. Unlike the delivery charge, this is the part you can shop around for.

An artificially low introductory rate designed to attract new customers, which often increases significantly after the first few billing cycles. Always check what the rate becomes after any promotional period ends.

The formal contract between you and your energy supplier, outlining pricing, contract length, fees, and cancellation terms.

A unit used to measure natural gas energy content, roughly equivalent to 100 cubic feet of gas.

A pricing structure where the cost per kWh changes depending on the time of day or season, typically cheaper during off-peak hours and more expensive during peak demand.

The company responsible for maintaining the physical wires and infrastructure that deliver electricity to your home, regardless of which supplier you use.

The total amount of electricity or gas consumed during a billing period, measured in kWh for electricity and therms, Mcf, or Ccf for natural gas.

The company responsible for delivering electricity or gas to your home through physical infrastructure. In deregulated markets, your utility continues delivering power no matter which supplier you choose.

A required document that explains a customer's legal rights and protections when shopping for or using energy services.