Glossary of Energy Terms

Affiliated Retail Electric Provider

A Retail Electric Provider (REP) that is owned, but separately operated, by a former monopoly electric utility.


An entity registered with the PUCT to bring a group of customers together to buy electricity in bulk.

British Thermal Unit (BTU)

A measure of heat equal to the amount of heat necessary to raise the temperature of one pound of water one degree F.

City-Owned Utility

A non-profit utility that is owned and operated by the city it serves. In Texas, city-owned utilities may opt into the competitive retail electric marketplace. See also "Municipally Owned Utility."

Commercial Customer

One of three commonly used designations for classes of customers. The others are residential and industrial. Commercial customers are not involved in manufacturing. Examples of commercial customers are retail stores, restaurants and educational institutions.


Adding charges to a bill without a customer's approval.

Customer Charge

A charge assessed during each billing cycle without regard to the customer’s demand or energy consumption.


The amount of electricity used at any given instant or averaged over a designated period of time. Demand is usually in measured in kilowatts or Megawatts. The Peak Demand is the highest 15 or 30 minute recorded demand period over 12-months.


Removal or relaxation of regulations or controls governing a business or service operation such as utilities.

Do Not Call List

The PUCT will establish a list for customers who do not want to receive telemarketing calls from REPs.

Electric Reliability Council of Texas (ERCOT)

A private industry group that monitors electric energy supply in the state.

Electricity Facts Label

An information sheet that provides customers with information on a REP's prices, contracts, sources of power generation and emissions, allowing customers to make an "apples-to-apples" comparison of REP offers.

Energy Charge

A charge based on the electric energy (kWh) consumed.

ESI-ID (Electric Service Identifier)

A unique number in the ERCOT market given to an electricity delivery point by the TDSP. You can find this number on your electricity bill.

Fuel Factor

An electric utility is allowed to recover its costs for the fuel used to generate electricity, such as coal, natural gas, wind, water, nuclear, etc., through the fuel factor. This cost is set by the PUCT and charged on each customer's bill, based on kilowatt-hour usage. A utility is prohibited from making a profit on fuel costs.


The production of electricity. Electricity in Texas is generated from natural gas, nuclear, coal, wind, water, and solar energy.

Kilowatt (kW)

A unit for measuring electrical energy. One kilowatt is 1,000 watts and equal to 3,413 BTUs). A kilowatt-hour equals one kilowatt of electrical power taken from an electrical circuit steadily for one hour.

Kilowatt Hour (kWh)

The standard unit for measuring electricity energy consumption, equal to 1,000 watt-hours.

Municipally Owned Utility (Muni)

A non-profit utility that is owned and operated by the municipality it serves. In Texas, municipally owned utilities may opt into the competitive retail electric marketplace. See also "City-Owned Utility."

Provider of Last Resort (POLR)

A Retail Electric Provider offering a standard retail service package for each class of customer at a fixed, non-discountable rate. In the event that a REP fails to serve any or all of its customers, the provider of last resort will offer that customer the standard retail service package for that customer class with no interruption of service.

Public Utility Commission of Texas (PUCT)

The state agency that regulates electric and telecommunications service. Under Electric Choice, the PUCT will regulate the delivery of electricity and enforce customer protections.

Renewable Energy

Electricity that is made from "environmentally friendly" fuel resources, such as wind, water, biomass or solar. Sometimes referred to as "green" energy.

Residential Customer

One of three commonly used terms to differentiate customer classes. The other two are commercial and industrial. Residential customers include private households that utilize energy for such needs as heating, cooling, cooking, lighting and small appliances.


The reorganization of traditional monopoly electric service to allow operations and charges to be separated or "unbundled" into generation, transmission, distribution and retail services. This allows customers to buy retail electric service from competing providers.

Retail Electric Provider (REP)

A person or company that sells electricity to customers.

Rural Electric Cooperative (Co-op)

Customer-owned electric utility that distributes electricity to members and that receives lower-cost financing through the federal government. In Texas, co-ops can choose to opt into the competitive retail market.


Switching electric service without a customer's approval.

Transmission and Distribution Service Provider (TDSP)

The company that delivers electricity to a customer's home or business along the poles and wires (formerly a local electric utility).

Terms of Service

Contract between a Retail Electric Provider and a customer that outlines fees, length of service and other important information.

Texas Electric Choice

The customer education program conducted by the PUCT.


This is the amount of electricity you used during the billing period listed in kilowatt-hours. This will be listed on your electric bill as KWh used.


An electrical unit of power or rate of doing work. It is analogous to horsepower or foot-pounds per minute of mechanical power. One horsepower equals 746 watts.

Your Rights As a Customer Disclosure

A document that informs you of your rights as mandated by the PUC. Retail Electric Providers must provide you with this disclosure.

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