You must understand the structure and three main functions involved in providing electricity in order to understand deregulation in the utility industry. These three utility components include (1) the process of generating the electricity (power plants); (2) transporting the power over high voltage transmission lines to the utility substation; (3) distributing the electricity to each home, farm or business (poles and power lines). Of these three segments, the first one - generation of electricity - is the only component that is deregulated.

Virginia customers are currently allowed to choose the company that will provide the actual electricity flowing across the power lines (the generation component). The delivery of the electricity to your home or business will continue to be regulated and monitored by the Virginia State Corporation Commission. No duplicate power lines will be built. The electric company or cooperative that has always maintained the poles, transformers and lines connected to your home or business will continue to provide that function (restoring power outages, upgrading service, constructing lines to new homes and businesses, etc.).

Each of the costs of providing power to you is listed separately on your bill. Your bill shows the charge for generating the amount of electicity that you use, the charge for delivering the power to your meter, and any other billing or miscellanious charges.

The 2007 General Assembly passed legislation re-establishing retail rate regulation, as of January 1, 2009, for most of the electricity customers in the Commonwealth.

Electricity customers with annual demands greater than 5 megawatts will continue to have the option to shop for competitive electricity supply. In addition, retail customers may purchase electricity supply from 100 percent renewable sources from competitive suppliers if their local utility company does not include renewable energy as a source of generation.

Northern Neck Electric Cooperative expects to maintain the service reliability that its customers have experienced for over 63 years. More information regarding deregulation of the electric utility industry can be obtained by visiting the Virginia Energy Choice web site, maintained by the State Corporation Commission.

Listed below is a 'Glossary of Electric Utility Terms" which we hope will be helpful as you read and hear more about deregulation of the electric utility industry.

Glossary Of Electric Utility Terms

Aggregator

A person or organization such as AARP who puts together a buying group for the purchase of electricity in order to get the best rates from an energy service supplier.

Electric current that reverses it's direction regularly.

Unit of measure used in the oil industry and equal to 42 gallons.

The minimum load over a given period of time.

A temporary loss of electricity in an area because of failure of generation or transmission equipment.

A voltage reduction during an electrical shortage that causes conditions such as dim lights.

Large amounts of electricity that is transported over high voltage transmission lines.

The load for which a generating unit, generating station, or other electrical apparatus is rated by the user or the manufacturer.

Any payments made by cooperative members in excess of the cost of service are essentially capital investments by the members and are assigned to each member's account.

One who sells energy or related services to a retail customer.

The opportunity for a retail customer to buy energy or energy related services from the provider of their choice.

Customers are categorized and charged by type of electricity used. These include: Residential, Commercial, Industrial, Public Street and Highway Lighting, Public Authorities, Railroads, and Railways.

The rate at which electric energy is delivered to a system. The primary source of demand is the power-consuming equipment of the customers.

Lines or pipes that deliver electricity or natural gas to your home or business. Your current local distribution utility maintains these lines.

As commonly used in the electric utility industry, electric energy is measured in kilowatt-hours.

One who provides electricity or natural gas at unregulated prices.

The production of electricity. This is the portion you will be able to choose.

A conducting body (the earth or object connected to the earth) whose potential is zero and to which an electric circuit can be connected.

A system that supplies both heating and cooling. In the heating cycle, the heat pump removes heat from the outside air and pumps it indoors. When cooling, the heat pump functions just like an air conditioner, absorbing heat from indoors and rejecting it to the outdoors.

Producing electricity by water power, usually falling water that turns a turbine.

A nonconductor, usually of glass or porcelain, for insulating and supporting electric wires.

Lower rate offered to customers willing to have electric service interrupted, saving the utility from providing more expensive power.

Profit oriented business usually financed by the sales of securities. Shareholders who may or may not be customers benefit from the profits of IOU.

A unit of electrical power equal to 1,000 watts.

The amount of electric power delivered or required at any specified point on a system. Load originates at the power-consuming equipment of the customers.

A company that owns or controls the distribution lines and equipment necessary to deliver energy to the customer.

Electric service prices determined in an open market system of supply and demand under which the price is set solely by agreement as to what a buyer will pay and a seller will accept.

1,000 kilowatts or 1,000,000 watts.

1,000 kilowatt-hours.

Device that measures the amount of electricity used.

Excess revenue after expenses have been paid. It is treated as advances of capital by the consumer-owned members and credits to them on the basis of their contributions to revenues. (See "Capital Credits")

The maximum rate at which electric energy is delivered to or by a system during a specific period of time.

A test program held for a limited time.

A network of generation, transmission and distribution systems that are interconnected.

Sales agents for wholesale electric power, typically not a part of a utility. Such entities contract with sellers as the middleman in selling bulk power in return for a margin or fee on the transaction.

The changes in the electric utility industry being considered through regulatory and statutory policies that govern production, transmission and distribution.

See Customer Choice

Delivering electricity from a remote power supplier through the transmission system of another party.

Member owned, non-profit business enterprise, incorporated under the laws of the state in which it operates. Any "margins" made by the cooperative are returned to the members in the form of capital credits.

An assemblage of equipment that enables switching and/or changing or regulating the voltage of electricity.

A device to change the voltage of alternating current electricity.

Lines or pipes that carry energy from it's source to the local distribution system.

Dividing energy service into parts - such as generation, transmission and distribution.

One horsepower is equivalent to approximately 746 watts.

Instrument used to measure and record kilowatt-hour consumption. (See "Meter")

The use of the transmission facilities of one system to transmit power for another system.