Glossary of Energy Terms


A buying group/organization that negotiates prices for a group of customers or a company that purchases a product, such as energy, in bulk for resale to retail customers.

Base Rate

The rate electric utilities charge customers for the cost of providing service, plus a profit. State regulators set base rates.


When two or more entities sell similar products/services in the same consumer market. For example, more than one company sells energy and supply to New Jersey consumers in some service areas.

Competitive Billing

A provision of an electric choice program that would permit customers to select the billing company for their electricity service.

Customer Choice

The ability of electricity customers to shop, compare prices, and choose the company that generates or supplies their electricity. Their utility continues to provide delivery service under regulated rates and conditions.


The removal of government regulations. Consumers can choose their energy supplier. Only the supply of electricity and natural gas is deregulated; transmission and distribution services remain regulated. This type of limited deregulation is also referred to as unbundling or restructuring conditions.

Electricity (or Power) Marketer

A company that acts as a coordinator or broker, and obtains energy from any source or combination of sources, including independent generators, utility system power or spot purchases, for delivery to a utility or end user.

Electricity Supplier

A company that sells electricity or natural gas supply and services, such as billing or metering services. Suppliers/marketers of electricity and natural gas must be certified or licensed by the Board of Public Utilities to sell electricity to customers within the state of New Jersey.

Federal Energy Regulatory Commission (FERC)

The independent federal agency responsible for regulating wholesale electric transactions and interstate natural gas pipelines.

Market Power

The ability of a seller/ buyer, either individually or in collaboration with other sellers/buyers, to affect the price of electricity in the relevant market.


Pennsylvania-New Jersey-Maryland LLC Interconnection responsible for maintaining the Mid-Atlantic power grid.

Price to Compare

The electricity utility’s price for electricity supply. For utilities that have unbundled delivery and supply services, this price appears separately on their customer’s electricity bill. See Shopping Credit below.

Shopping Credit

The price that an electric utility will charge its customers for the production of electricity, less any competitive transition charge (CTC). The credit is the amount consumers will use to compare offers when shopping for electricity. It is also known as the price to compare.


The unauthorized switching of a customer's energy supply service without the customer's authorization.

Standard Offer Service (SOS)

Electricity supply purchased from a customer’s electric utility company.

Stranded Costs

Payments to utilities for investments (e.g. power plants, purchase power contracts) that were required under a regulated system and approved by the Board of Public Utilities but are not part of the utility’s regulated service under restructuring. Legislation provides that they will be recovered via the Competitive Transition Charge (CTC).

Universal Service Fee

A fee paid by all users of electricity in New Jersey to provide public interest programs for low-income users. The fees help eligible customers pay their electricity bills and also provides for energy conservation measures and weatherization.

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