Glossary of Terms

Transformer

An electrical device for changing the voltage of alternating current.

Transmission

The movement or transfer of electric energy over an interconnected group of lines and associated equipment between points of supply and points at which it is transformed for delivery to consumers, or is delivered to other electric systems. Transmission is considered to end when the energy is transformed for distribution to the consumer.

Transmission Costs

Current Transmission & Ancillary Charges

Transmission and ancillary services required to transport electricity from the generating station to the distribution system. ARES typically charges ComEd's Transmission Service Charge (TSC) in Rider TS, currently $0.00404 per kWh plus a PJM Administrative Charge.

PJM Administrative Charges

PJM charges fees to suppliers for the cost of administering markets and transporting electricity. This fee is currently at $0.00045 per kWh. After 2006, ComEd's TSC calculation will only include the cost of transmission while ancillary and administration fees may be part of the utility supply price. Suppliers may charge a PJM Administrative charge will incorporate ancillary charges not included in the TSC rate based on incurred cost.

Congestion Management Charges

The PJM transmission tariff bills suppliers for transmission congestion caused by delivering electric supply on the transmission lines. The amount of congestion management cannot be easily predicted. Each supplier may include any price risk for this component in each of its products.

Operating Reserves Charge

These are charges levied by PJM on all market participants in order to recover the cost PJM incurs to maintain adequate generating resources to support real-time and day-ahead markets. Charges for real-time operating reserves from PJM have averaged $4 - $5 per MWh. Day-Ahead operating reserves are typically much lower (avg. $0.10-$0.20/MWh).

Changes in Transmission & Ancillary Charges

Any changes in Transmission & Ancillary costs due to tariff or rate changes through approved PJM/ComEd rate cases.

Capacity

Simply stated, capacity is the cost of reserving generation space on the network. PJM is expected to implement a capacity clearing house methodology (RPM) in June 2007.

Local Utility Delivery Charges

Delivery charges cover the use of the delivery company's poles and wires, costs associated with reading the meter, public programs, transition charges, taxes and other costs of doing business experienced by the delivery company. These charges are typically passed through on the single bill option. These charges are consistent for customers regardless of their supply source (ComEd or a retail marketer).

Transmission System (Electric)

An interconnected group of electric transmission lines and associated equipment for moving or transferring electric energy in bulk between points of supply and points at which it is transformed for delivery over the distribution system lines to consumers, or is delivered to other electric systems.

Transmitting Utility

This is a regulated entity which owns, and may construct and maintain, wires used to transmit wholesale power. It may or may not handle the power dispatch and coordination functions. It is regulated to provide non-discriminatory connections, comparable service, and cost recovery. According to EPACT, this includes any electric utility, qualifying cogeneration facility, qualifying small power production facility, or Federal power marketing agency which owns or operates electric power transmission facilities which are used for the sale of electric energy at wholesale.

Turbine

A machine for generating rotary mechanical power from the energy of a stream of fluid (such as water, steam, or hot gas). Turbines convert the kinetic energy of fluids to mechanical energy through the principles of impulse and reaction, or a mixture of the two.

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