Utility billing glossary

A

AccrualBilling & AP

An estimate of utility expense booked for a period before the bill arrives, because utility service periods rarely match the accounting month. Accurate accruals depend on knowing each account's normal usage, billing cycle and any pending rebills or credits.

Advanced metering infrastructure (AMI)Demand & metering

The network of smart meters, communications and head-end systems that lets a utility read meters remotely, often in 15-minute or hourly intervals. AMI reduces estimated reads, but a meter that stops communicating can still produce months of estimates.

B

Back-billingBilling & AP

A utility's correction of past bills, either to collect for under-billing or to refund over-billing. How far back a correction can reach is set by the utility's tariff and state commission rules, and the limits for charging and refunding are not always the same.

Billing determinantRates & tariffs

Any measured or assigned quantity a tariff multiplies by a price to produce a charge: kWh by period, billed kW, kVAR, number of days, or a fixed customer charge. Auditing a bill means confirming every determinant before checking the prices applied to it.

C

Cancel and rebillBilling & AP

The way most utilities correct a bill: the original is canceled and a new bill is issued for the same service period. If the original was already paid, the cancellation credit must be applied or refunded, or the period is paid twice.

Capacity tag (PLC)Rates & tariffs

In organized wholesale markets, a customer's share of the system's capacity obligation, which suppliers use to price capacity costs for the following year. In PJM it is called the peak load contribution (PLC) and is generally derived from the customer's load during the five summer coincident peak hours, adjusted by utility-specific factors.

CCFDemand & metering

One hundred cubic feet, the unit many water and sewer utilities bill in. One CCF is about 748 gallons. Natural gas is also measured in CCF, though gas bills usually convert volume to therms.

Coincident peakDemand & metering

A customer's demand during the hour or interval when the whole system, zone or utility peaked, as opposed to the customer's own highest demand. Coincident peaks set transmission and capacity costs in several markets, so reducing load in a handful of hours can lower a year of charges.

Critical peak pricingRates & tariffs

A rate design that charges a much higher price during a limited number of event hours a year, called by the utility on high-demand days, in exchange for lower prices at other times. Customers on these rates need advance event notices and a plan to curtail load.

CT ratioDemand & metering

The ratio of a current transformer's primary current to its secondary current, such as 800:5. Transformer-rated meters measure the reduced secondary current, so the billing system multiplies readings by the CT ratio (800 divided by 5, or 160) and any potential transformer ratio to get actual usage.

Customer chargeRates & tariffs

A fixed monthly charge per account or meter that recovers metering, billing and service connection costs regardless of usage. It keeps billing on an open account even when a site is closed and using no energy.

D

Demand chargeDemand & metering

A charge based on the highest rate of electricity use in a billing period, usually the highest 15-minute or 30-minute average kW, rather than total kWh. On many commercial bills it is a third or more of the electric cost.

Demand ratchetDemand & metering

A tariff provision that bills demand at no less than a stated percentage of the highest demand recorded in a look-back period, typically the prior 11 or 12 months. The percentage, window and season vary by tariff, and computing any of them wrong overstates billed demand.

Demand responseEnergy & sustainability

Programs that pay customers to reduce load when the grid is stressed or wholesale prices are high, run by utilities, grid operators or third-party aggregators. Participation can also lower coincident peak charges and capacity tags.

E

EDI 810Billing & AP

The ANSI X12 Invoice transaction set. Many utilities and retail suppliers send bills as EDI 810 files, which carry account, service period, charge and usage detail in a machine-readable format that can feed AP and audit systems directly.

EDI 867Billing & AP

The ANSI X12 Product Transfer and Resale Report, used in competitive retail energy markets to exchange meter usage data between utilities and suppliers. It is a common source of interval and monthly usage when bills come from a supplier.

ENERGY STAR Portfolio ManagerEnergy & sustainability

The US EPA's free online tool for tracking building energy and water use and calculating ENERGY STAR scores. Many local building benchmarking ordinances require annual reporting through it, so it is often fed from the same bill data used in an audit.

Estimated readDemand & metering

A bill based on the utility's estimate of usage, made when an actual meter reading is not available. The next actual read should reconcile the difference, but long runs of estimates and estimated final reads are frequent sources of overbilling.

F

Formal complaintRegulatory

A docketed proceeding before a state utility commission in which a customer asks the commission to rule on a dispute with a utility. It follows commission procedural rules and is usually pursued only after an informal complaint does not resolve the issue.

Four coincident peak (4CP)Rates & tariffs

In the ERCOT market in Texas, the method used to allocate transmission costs to larger interval-metered customers: their average demand during the four monthly 15-minute system peaks from June through September sets their transmission charges for the following year.

Fuel adjustment clauseRates & tariffs

A tariff mechanism that passes changes in a utility's fuel and purchased power costs through to customers as a per-kWh charge or credit, adjusted periodically without a full rate case. It appears as its own line or rider on most bills.

G

Green ButtonEnergy & sustainability

An industry standard, based on the NAESB Energy Services Provider Interface (ESPI), for sharing utility usage and billing data in a common format. Download My Data lets a customer export files; Connect My Data lets the customer authorize a third party to receive data automatically.

I

Informal complaintRegulatory

A request to a state utility commission's consumer staff to help resolve a billing dispute with a utility. Staff contact the utility and review its response; it is faster than a formal complaint and is the usual escalation when a utility rejects a well-documented claim.

Interval dataDemand & metering

Meter readings recorded at fixed intervals, usually every 15 minutes or hourly. Interval data is the basis for checking demand, ratchets, power factor and time-of-use period splits against the bill.

K

Kilovolt-ampere (kVA)Demand & metering

Apparent power, the combination of real power (kW) and reactive power (kVAR). Some tariffs bill demand in kVA instead of kW, which builds a power factor charge directly into the demand charge.

Kilovolt-ampere reactive (kVAR)Demand & metering

Reactive power, drawn by motors, compressors and other inductive equipment to sustain magnetic fields. It does no useful work but loads utility lines and transformers, so tariffs may bill kVAR or kVARh above an allowance or adjust demand for low power factor.

Kilowatt (kW)Demand & metering

A unit of power, the rate at which electricity is used at a moment. Demand charges are billed on kW, usually the highest average over a 15-minute or 30-minute interval in the billing period.

Kilowatt-hour (kWh)Demand & metering

A unit of energy, equal to using one kilowatt for one hour. Energy charges, fuel adjustments and most riders are billed per kWh.

L

Late payment chargeBilling & AP

A fee, usually a percentage of the past-due balance, that a tariff allows when payment is not received by the due date. In multi-site portfolios it is frequently billed in error because of lockbox posting delays or misapplied payments.

Letter of authorization (LOA)Billing & AP

A signed document in which a customer authorizes a third party to request account records, usage data and billing history from a utility, and, where stated, to file disputes and claims on the customer's behalf. Trace Global works under an LOA and never takes ownership of the account.

Load factorDemand & metering

Average demand divided by peak demand over a period, or equivalently kWh divided by peak kW times hours in the period. A low load factor means a short, sharp peak drives demand charges, and it often signals that a different rate schedule or load management would lower cost.

M

Meter multiplierDemand & metering

The constant a billing system applies to a meter's register reading to get actual usage, equal to the CT ratio times any potential transformer ratio. Multipliers are kept in the utility's billing record and are a common source of error after meter or CT exchanges.

Minimum billRates & tariffs

A tariff provision that sets the lowest amount an account can be billed in a period, often tied to contracted or ratcheted demand. It keeps charges flowing on idle or closed sites until the account is formally stopped.

N

Net meteringEnergy & sustainability

A billing arrangement that credits a customer for electricity exported to the grid from on-site generation, usually solar, against electricity drawn from it. Program terms, credit values and true-up periods are set by state policy and each utility's tariff.

Non-coincident demandDemand & metering

A customer's own highest demand in the billing period, whenever it occurs, regardless of when the system peaked. Most commercial demand charges are billed on non-coincident demand, sometimes alongside an on-peak demand charge.

P

Power factorDemand & metering

The ratio of real power (kW) to apparent power (kVA), between 0 and 1. A low lagging power factor, caused by inductive loads such as motors, means the utility must deliver more current for the same useful work.

Power factor adjustmentRates & tariffs

A tariff charge applied when an account's power factor falls below a stated threshold, typically between 0.85 and 0.90 lagging depending on the tariff. It may scale up billed demand, bill excess kVAR, or bill demand in kVA.

Predominant use studyBilling & AP

An engineering analysis of the equipment on a meter and its share of consumption, used to show that most of the utility service is used in an activity a state exempts from sales or utility tax, such as manufacturing. It supports the exemption certificate filed with the utility and any refund claim.

Provider of last resort (POLR)Regulatory

In competitive retail electricity markets such as Texas, the supplier designated to serve customers whose retail provider leaves the market or who are otherwise without a supplier. POLR prices are often well above market, so accounts that land there need prompt attention.

Public utility commission (PUC/PSC)Regulatory

The state agency that regulates investor-owned utilities, called a public utility commission, public service commission or similar name depending on the state. It approves tariffs and rates, sets billing and back-billing rules, and hears customer complaints.

R

Rate caseRegulatory

A formal proceeding in which a utility asks its state commission to change its rates, tariffs or rate design. Rate cases can close or replace schedules, move time-of-use periods and change ratchet terms, all of which must then be reflected correctly in billing.

Rate scheduleRates & tariffs

A section of a utility tariff that defines the prices, charges and eligibility rules for a class of service, identified by a code such as a letter and number. Each account is assigned one, and the assignment determines how every billing determinant is priced.

Renewable energy certificate (REC)Energy & sustainability

A tradable instrument representing the environmental attributes of one megawatt-hour of renewable generation. Companies use RECs to support renewable electricity claims and market-based Scope 2 reporting.

Retail electric provider (REP)Regulatory

In Texas's competitive market, the company that sells electricity to the end customer and issues the bill, while the transmission and distribution utility owns the wires and meters. Delivery charges from the TDU are passed through on the REP's bill.

RiderRates & tariffs

A tariff provision that adds a charge or credit on top of the base rate schedule, such as fuel cost recovery, energy efficiency programs, storm recovery or transmission costs. Riders change on their own schedules, so the rate on a bill must be checked against the rider in effect for each service period.

S

Sales tax exemption certificateBilling & AP

A state form filed with a utility to stop sales or utility tax on service that qualifies for an exemption, such as usage in manufacturing. Utilities generally keep charging tax until the certificate is on file, and refunds for earlier periods follow state rules.

Scope 2 emissionsEnergy & sustainability

Indirect greenhouse gas emissions from purchased electricity, steam, heat and cooling, as defined by the GHG Protocol. Its Scope 2 Guidance calls for reporting both a location-based figure from grid averages and a market-based figure that reflects contracts and certificates.

Security depositBilling & AP

Cash or a financial guarantee a utility may require when a commercial account is opened or after payment problems. Tariffs and commission rules usually require its return, often with interest, after a period of on-time payment, yet many deposits are held for years.

Sewer deduct meterDemand & metering

A separate meter on water that does not return to the sewer, such as cooling tower makeup or irrigation, whose volume the utility subtracts from the sewer bill. Most utilities require the meter to be approved and its reads reported on a schedule before credits apply.

Summary billingBilling & AP

A utility service that groups many accounts onto one consolidated invoice with a single due date, while still issuing account-level detail. It simplifies payment but can lead to duplicate payments when both the summary and the detail statements are entered in AP.

T

TariffRates & tariffs

The complete set of rate schedules, riders, rules and service terms a regulated utility files with and has approved by its commission. The tariff is the legal basis for every charge on a bill, and every billing claim is argued against it.

Time-of-use (TOU)Rates & tariffs

A rate design that prices energy, and sometimes demand, differently by time of day, day type and season, such as on-peak, mid-peak and off-peak. Periods are defined in local time in the tariff, so meter programming, daylight saving time and holidays all affect billing accuracy.

Transmission and distribution utility (TDU)Regulatory

In Texas's competitive market, the regulated company that owns and operates the poles, wires and meters in an area, also called a TDSP. It bills delivery charges to the retail electric provider, which passes them through to the customer.

Transmission tagRates & tariffs

A customer's share of transmission costs in an organized market, set from its load at the system or zone peak. In PJM it is the network service peak load (NSPL); suppliers use it to price or pass through transmission charges for the following year.

True-upBilling & AP

A reconciliation that settles the difference between estimated or provisional charges and actual ones, such as an actual meter read after estimated bills or an annual net metering settlement. A missing or misapplied true-up leaves the account over or under billed.

U

Utility users taxBilling & AP

A local tax that some cities and counties, notably in California, levy on utility services as a percentage of charges. It follows its own exemption rules, separate from state sales tax, so both must be checked on each bill.