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Deregulation - Deregulation refers to the societal movement away from traditional, monopoly, investor-owned utilities. In theory, the increased competition that will come with a more diversified energy market will benefit consumers through lower prices and superior service. Opponents of deregulation argue that the government is adequately or better able to regulate the electric industry than market forces. Distribution - This refers to small-scale delivery (poles & wires) of electricity to homes and businesses, as distinct from transmission. Distributed Generation - This term refers to generation of electricity for use or sale that does not utilize the utilities transmission network. Examples would be power generated by biogas digesters on dairies, solar or wind generation, or other generation on your property or "over-the-fence" to a near-by entity. This reduces the demand for power from the Utility grid. Direct Access - Beginning in 1998 as part of deregulation, electricity consumers in California were allowed to "shop the market" to choose their provider of electricity. This was called Direct Access(DA). Allow the power was brought in on PG&E or SCE power lines, it was bought from an independent party, or Electricity Service Provider (ESP). In the wake of the Energy Crisis, DA was suspended to prohibit people from leaving the major Utilities and exacerbating their financial problems. Currently the Legislature and the PUC are investigating whether to reallow DA. Today, approximately 13% of energy consumed in California is through Direct Access, with 2% of agricultural consumers utilizing DA prior to the suspension. General Rate Cases - Every couple of years the traditional, investor-owned utilities revisit their operating budgets, expenses, liabilities, etc. and make determinations on how to adequately recover their costs. In the interest of their shareholders and ratepayers the utilities work with the Public Utilities Commission and various intervenors like AECA to decide which customer classes will pay for the services offered and how rates will be adjusted to meet those revenue goals. Generation - Generation refers to the production of electrons to satisfy grid demand. Some key areas of generation include fossil fuels, hydroelectricity, geothermal generation, nuclear facilities, and less significantly wind and solar power. The Grid - Interconnected network of large transmission cables that connect all generating facilities, and large distribution stations in a four-state region. The grid encompasses California, Nevada, Oregon, Washington, as well as portions of British Columbia and the Baja Peninsula. Energy is constantly being put into the grid, just as it is constantly being drawn from the grid. In California, the Independent System Operator (Cal-ISO) ensures that there is enough electricity on the grid to exceed demand. Blackouts occur when there is more electricity being drawn from one extremity of the grid faster than it can be replenished at some other point. Net Metering - When a consumer also generates their own electricity on site through either biogas, solar, or other means, this refers to the ability of the consumption of electricity to calculate flow in both directions. At times the meter will actually run backwards, allowing the customer to be credited for the electricity "sold" back into the system. Path 15 - Although Northern and Southern California (generally PG&E and SCE) are interconnected in the grid, there are bottlenecks between the two geographic areas. Path 15 refers to the sole main interconnection between the two, located along I-15 near Los Banos. On a typical hot summer day, demand peaks at about 50,000 MW, while Path 15 only allows for around 3,400 MW to be "moved" between the two areas. During the energy crisis, surpluses in Southern California could not be transferred north of Path 15, which is why there were more blackouts in Northern California. The Legislature and the PUC are currently working to expand the capacity of Path 15. Transmission - The large-scale movement of electrons throughout the grid on large transmission cables. These cables deliver energy from generation sources to regional substations that reduce voltage and allow for industrial and household distribution of retail energy services. Cost Responsibility Surcharges - During the Energy Crisis, both the major utilities and the State of California incurred debt to keep retail prices down. This debt, in the form of bonds taken out by the Department of Water Resources, long-term contracts signed by DWR as well as the historical debt of the utilities was incurred to benefit the ratepayers of the utilities. CRSs, or "exit fees" are applied to customers who have gone back to Direct Access or began Customer Generation of their own to pay off the benefit derived from those debts. There are still many decisions to be made by the Legislature and the PUC with regard to the form and amount of these fees. Demand Charges - Charge assessed electricity customers on a regular basis (e.g., monthly) to pay for utility fixed assets. Although the charge level may vary by customer size or class, it does not typically change as a result of use, though "ratcheted" demand charges can be triggered by electricity consumption. Energy Charges - This is the product that is being sold by your distributor, the actual electrons needed to run pumps, wind machines, cotton gins and coolers. Exit Fees - See "Cost Responsibility Surcharge" Transmission Charges - Similar to a demand charge, this portion is dedicated to pay for the transmission infrastructure of the utilities grid. Standby Charges - See "Demand Charges" Summer, Winter, Off Peak, On Peak - These terms refer to different times of day when energy costs more or less. Generally, the highest level of energy use occurs during hot, summer days when air conditioners are fully utilized. Conversely, winter nights have the least energy demand on the grid. When demand goes up so does the price.
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Agricultural Energy Consumers Assocation 925 L Street, Suite 800 / Sacramento, CA 95814 (916) 447-6206
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