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Electric industry terms for business customers

As a small business, you rely on electricity to keep your shop up and running. Depending on what type of business you run, your electricity usage may be relatively low or extremely high. Regardless of your energy usage, it is important to understand the rates and charges on your bill to ensure you are paying the correct amount for electric service and to catch any billing problems that may occur. Here are some helpful terms to help you understand your electric bill.

  • Capacity – The capability to generate electrical power, measured in megawatts (MW) or kilowatts (kW).
  • Competitive Retail Electric Service Standards – PUCO rules that provide consumer protections pertaining to issues including quality of electricity, slamming, contract information and meter readings.
  • Customer charge – A charge on your electric bill to pay for costs associated with electric system equipment and maintenance.
  • Demand – The amount of electricity drawn from an electric power system at a given instant in time, generally measured in MW or kW.
  • Distribution Service Charge – The charge you pay for the cost of moving and delivering electricity to your business.
  • Distribution system – The poles, wires and transformers used to deliver electric energy from a power company to the customer.
  • Federal Energy Regulatory Commission (FERC) – A federal agency responsible for the regulation of electric and gas utility installations and wholesale services used in interstate commerce.
  • Generation Service Charge – A charge you pay to cover the costs associated with producing the electricity.
  • Grid – An interconnected system of electric cables and power stations that distributes electricity over a large area.
  • Meter – A device used to measure, display and record the amount of power used by a customer.
  • North American Electric Reliability Council – An independent organization that works to ensure that the bulk electric system in North America is reliable, adequate and secure.
  • Transmission Service Charge – The charge you pay to the electric company to move high voltage electricity from the generation facility to the distribution facility.