Glossary of Energy Terms

A B C D E F G H I J K L M N O P Q R S T U V W X, Y, Z Abbreviations

Take-or-Pay Clause
A contract provision obligating the buyer to pay for a certain minimum quantity of product, whether or not the buyer actually takes that quantity during the stated period.

Take-or-Pay Quantity
Under a take-or-pay clause, the minimum amount of product that the buyer is obligated to pay for whether or not the buyer actually takes that amount of product, usually stated in terms of an absolute quantity, or a percentage of total contract quantity, over a specific period of time, usually a year.

Take-or-Pay Surcharge
A surcharge to an interstate pipeline's sales and transportation rates permitted by FERC, designed to recover the pipeline's costs of settling its historic take-or-pay liabilities.

Tariff
A document filed by a regulated entity with either a federal or state commission. It lists the rates the regulated entity will charge to provide service to its customers as well as the terms and conditions that it will follow in providing service.

Tenor
The maturity of a swap transaction.

Term Swap
Swaps often involve longer maturities than can generally be found on futures or option contracts traded on organized exchanges. Term swap usually involves maturities greater than three years.

Tertiary Recovery
Enhanced methods for the recovery of oil and natural gas that require a means for displacing the oil or natural gas from the reservoir rock, modifying the properties of the fluids in the reservoir and/or the reservoir rock to cause movement of the oil or natural gas in an efficient manner and providing the energy and drive mechanism to force its flow to a production well.

Test Period
In a pipeline rate case, a test period is used to determine the cost of service upon which the pipeline's rates will be based. A test period consists of a base period of twelve consecutive months of recent actual operational experience, adjusted for changes in revenues and costs that are known and are measurable with reasonable accuracy at the time of the rate filing and which will become effective within nine months after the last month of actual data utilized in the rate filing.

Tiered Rates
A rate design which divides customer use into different tiers, or blocks, with different prices charged for each.

Tight Gas
Unconventional natural gas that's trapped in hard rock, sandstone or limestone formations that is impermeable and non-porous.

Tight Pool
A group of utilities who dedicate their generating and transmission resources for joint economic dispatch. Usually costs and revenues are divided after the fact and no individual pool member is responsible for the procurement of individual power supplies.

Time-of-Use (TOU) Rates or Pricing
A rate design imposing higher charges during periods of the day when relatively higher peak demands are experienced.

Time Value
The dollar amount by which the premium of an option exceeds the intrinsic value of an option.

Tipple
A surface processing structure for cleaning and sizing coal and automatically loading it onto rail cars or trucks for movement to market.

Tolerable Zone
The Tolerable Zone covers a band of voltage values above and below the Preferred Zone. In the Tolerable Zone, the customer's equipment may be expected to operate satisfactorily although the performance may perhaps be less than warranted by the manufacturer.

Tolling Arrangement
An arrangement whereby a party moves fuel to a power generator and receives kilowatt hours (kWh) in return for a pre-established fee.

Tolling Fee
A fee paid for use of electric generation assets used to convert fuel to power.

Transition Costs
Costs associated with the change of an industry from a regulated, bundled service to a competitive open-access service, including "Stranded Costs."

Transmission Company
Company which obtains the major portion of its natural gas operating revenues from the operation of a natural gas transmission system and/or from mainline sales to industrial customers.

Transmission (Trunk) Line
Pipeline transporting natural gas from principal supply areas to distribution centers, large volume customers or other transmission lines. Transmission lines generally have a linear configuration, may be quite large in diameter, operate at relatively high pressure, and traverse long distances.

Turbine
A device for converting the flow of a fluid (hot gases, air, steam, water) into mechnical motion.

Two Part Rate
A charge for energy consisting of a demand component and an energy or commodity component.