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Glossary of Energy Terms

Automatic Payment Plan
A plan where the customer authorizes Duke Energy to automatically debit (draft) checking or savings accounts for payment of electric bills.

Basic Facilities Charge
A monthly charge based on costs associated with such things as metering, meter reading, billing, etc. exclusive of demand or energy consumption

Business Entity
Single corporation, partnership or individual as determined by Duke Energy.

Contribution in Aid of Construction
Contribution In Aid of Construction is charged when Duke Energy is requested to provide service that is deemed economically infeasible.

(expressed as "kW" or "kilowatts")
The rate at which electric energy is delivered to or by a system or piece of equipment at a given instant or averaged over any designated period of time. When you become a Duke Energy customer, we plan our facilities based on the maximum demand expected at any time from your business or home. The demand portion of a bill is designed to cover the costs of having capacity available for your use and is measured by the rate at which a customer uses electricity.

Actual Demand
Maximum integrated (average) demand used by a customer during a given period during a month. Under Duke Energy's rate schedules, the demand is averaged over a 30-minute period.

Billing Demand
The billing demand is the demand value used for billing purposes on the customer's monthly bill.

Contract Demand
The maximum demand Duke Energy is expected to deliver to the customer at any time.

Demand Ratchet
A demand ratchet is a feature often incorporated into utility rate designs to minimize the risk of providing service to customers whose loads vary throughout the year. The ratchet can spread out the costs on an annual basis which benefits the customer and the utility.

Economy Demand
On a time of use rate, the amount by which the maximum demand for the month exceeds the on-peak demand.

Demand Rate
Any method of charge for electric service which is based upon, or is a function of the rate of use, or size, of the customer's installation or maximum demand during a given period of time.

The characteristics of a variety of electric load whereby individual maximum demands usually occur at different times for one customer's equipment or among a group of customers.

A program that allows customers to receive and pay Duke Energy bills on the Internet.

(expressed as "kWh" or "kilowatt-hours")
The amount of electricity a customer uses during the billing period. In some cases, an electric meter registers only a portion of the kilowatt-hours used, and a meter multiplier must be used to determine the customer's actual kilowatt-hour usage. Any multiplier, if applicable, is shown on the customer's bill.

Off Peak Energy
Energy consumed during designated off-peak periods of a particular rate schedule. See individual rate schedule for specific off-peak hours, days and months.

On Peak Energy
Energy consumed during designated on-peak periods of a particular rate schedule. See individual rate schedule for specific on-peak hours days and months.

Energy Costs
The variable costs associated with providing electric service (e.g. fuel, etc.). These costs can vary based on the rate the customer is being charged under.

Equalized Payment Plan (EPP)
A program which levelizes a customer's monthly electric bills for 11 months but requires during the 12th month a settle up between what you were billed and what actually occurred.

Extra Facilities
Extra Facilities is charged when customers request facilities that are above standard service. This monthly charge allows Duke Energy to provide non-standard equipment or service to meet specific customer needs without passing these costs onto other customers who do not request non-standard service.

Fixed Payment Plan (FPP)
A program that allows customers to pay a fixed monthly dollar amount for electric bills which is adjusted annually, but there is no settle up due to deviations of actual usage versus the fixed FPP monthly amount.

Fuel Adjustment Clause
An adjustment to a customer's bill used to recover Duke Energy's cost of fuel used to generate electricity. NC and SC Commissions have annual proceedings to evaluate fuel costs. After the review, the state Commissions may order that rates increase or decrease to reflect changes to the cost of fuel only.

General Service Rates
rate available for customers that do not qualify for residential or industrial schedules.

Industrial Service Rate
Rate available to customers classified as a manufacturing industry by the US Government as published in the standard Industrial Classification (SIC) Manual. At least 50% of the process must be for manufacturing purposes.

Interruptible Service
A program under Rider IS where Duke Energy may interrupt service to a customer during times when system capacity is needed. A customer who participates in this program is given a monthly credit for making a specific amount of capacity available when the system experiences capacity problems. No new customers are being added to Rider IS at this time.

Kilowatt (kW)
a unit of electric demand or capability.

Kilowatt hour (kWH)
A unit of electric energy. kW x hours= kWh

Load Factor
The ratio of the average load in kilowatts supplied during a designated period to the peak or maximum load in kilowatts occurring in that period. Amount of electricity the customer uses compared to how much he could have used considering the capacity installed to serve.

Load Factor Rates
This rate design spreads the fixed costs over the energy charges based on load factor. With this design, improvement in load factor automatically results in a lower per unit cost, i.e. customers can reduce their average cost per kWh by reducing their demand. G, GA and I are load factor rates (see also, Declining Block Rates).

Used to calculate actual usage for meters that register only a portion of kilowatts or kilowatt-hours used. The meter multiplier is normally shown on face of meter and is shown on the bill.

Minimum Bill
The minimum amount that a customer is required to pay under the contract and applicable rate schedule.

Off Peak Hours
The hours of the day when electricity is typically used less.

On Peak Hours
The hours of the day when electricity is typically used more.

Power Factor
Power factor is the ratio of real power (kW) to apparent power (kVa) at any given point in time and in an electrical circuit.

Power Factor Correction
Power factor correction occurs on customers that operate in parallel who have power factors less than 85%. This adjustment is required because a power factor less than 85% means Duke Energy has to operate its generators more (thus, incurring more cost) in order to get power to customers. When power delivered to Duke Energy, adjustments are made when the power factor is less than 90 % or greater than 97%.

The land and buildings or other facilities on the land that require the use of electricity.

Price Response
Shifting consumption from high to low price hours in order to save on their energy costs.

A company contracted by Duke to process customer payment by telephone. A convenience fee for this service is charged by the third party.

Termination Fee
An amount specified by the service regulations, rate schedule or rider, required to be paid to Duke Energy for customers who request alteration or termination of a contract before the end of the initial term.

Tariff Lighting
An all-night lighting service provided for a monthly charge that includes the cost of equipment, maintenance and energy.

Time of Use Rates
Time of use rates provide different price signals that can vary seasonally, by day and by hour. Seasonal price differentials and time of day price differentials encourage customers to move load to off-peak periods or add incremental load during off-peak periods. OPT is a time of use rate.

If a customer wishes to have the consumption that is recorded by multiple meters aggregated under a single contract, they may request totalization provided that the deliveries are on contiguous premises. The costs associated with totalization will be charged under the Extra Facilities provision of Duke Energy Service Regulations.