Industry Terms

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FERC
Federal Energy Regulatory Commission. A federal agency that regulates interstate electricity transactions.

FERC Gas Tariff
A published statement filed by an interstate pipeline with the FERC that describes the rates, terms and conditions under which service will be provided.

FERC- Out
A clause in a contract which allows the pipeline to adjust the rates and terms to reflect regulatory action.

Firm Customer
A customer for whom contract demand is reserved and to whom the supplier is obligated to provide service.

Firm Demand
The capacity that a supplier is required by contract to provide (except during extreme emergencies).

Firm Energy
Energy sales which, although not subject to interruption for economic purposes, may be interrupted under force majeure conditions.

Firm Gas
Gas sold on a continuous basis for a defined contract term.

Firm Power
Electric power or power-producing capacity intended to be available at all times during the period covered by a guaranteed commitment to deliver, even under adverse conditions, but subject to force majeure interruptions. Firm power consists of either firm energy, firm capacity or both.

Fixed Charge
The charge calculated in rate design to recover all or a portion of the fixed costs of a utility plant, including the generation facility and transmission lines, meters and some taxes.

Fixed Price
A contract in which a named, exact price is specified for commodities. A fixed price contract usually has variations to the fixed price such as escalators or predeterminations for increased costs or incentives for meeting various goals.

Fixed Price Tariff
A standard energy charge that remains fixed for a specified period of time except for adjustments to reflect changes in fuel costs.

Force Majeure
Superior or irresistible force that excuses a failure to perform. It has been defined by the United States Supreme Court as a cause that is "beyond the control and without the fault of negligence" of the party excused.

Forward Buying
Providing commodities (such as power) for future needs assuring that it will be on hand when needed and that there will be no disruption of service.

Forward Contract
A commitment to buy (long) or sell (short) an underlying asset at a specified date at a price (known as the exercise or forward price) specified at the origination of the contract.

Forward Swap
Swaps that begin more than one year in the future. The terms are fixed before the start date. Also known as a deferred-start swap.

Forwards
A commodity bought and sold for delivery at some specific time in the future. It is differentiated from futures markets by the fact that a forward contract is customized, non-exchange traded and non-regulated hedging mechanism.

Fossil Fuel
Fuel such as coal, crude oil or natural gas, formed from the fossil remains of organic material.

Fossil-Fuel Plant
A plant using coal, liquid fuel (e.g. oil) or natural gas as its source of energy.

Fractionation
The process of separating liquid hydrocarbons from natural gas into propane, butane, ethane, etc.

Fuel
Any substance that can be burned to produce heat; also, materials that can be fissioned in a chain reaction to produce heat.

Fuel Expenses
These costs include the fuel used in the production of steam or driving another prime mover for the generation of electricity.

Fuel-Switching
Substituting one fuel for another based on price and availability. Large industries often have the capability of using either oil or natural gas to fuel their operation and of making the switch on short notice.

Futures
A standardized contract for the purchase or sale of a commodity which is traded for delivery in the future.

Futures Contract
An exchange-traded contract promising to buy or sell standard commodities or securities at a future date at a set price. Futures are paper deals and involve profit and loss on promises to deliver, not possession of the actual commodity.

Futures Market
Arrangement through a contract for the delivery of a commodity at a future time and at a price specified at the time of purchase. This price is based on an auction or market basis. Standardized, exchange traded, and government regulated hedging mechanism.

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