Glossary: Cannabis Energy & Utility Terms A to Z

A

Aggregation. Combining several accounts, meters, or facilities into one purchasing group so a supplier prices them together. Multi-site operators use it to get one contract and better terms across a portfolio. See multi-state operator energy procurement.

Alternative retail electric supplier (ARES). Illinois' legal name for a competitive supplier licensed by the Illinois Commerce Commission to sell electricity to retail customers. Other states use electric generation supplier, third-party supplier, or retail electric provider for the same role.

AMI meter. Advanced metering infrastructure. A meter that records usage in 15-, 30-, or 60-minute intervals and reports it to the utility, so you can see which interval set your peak. See interval data and AMI meters.

Ancillary services. Services that keep the grid balanced as electricity moves from generators to customers. PJM describes them as helping balance the transmission system and runs markets for synchronized reserve, non-synchronized reserve, day-ahead scheduling reserve, and regulation [pjm-glossary]. On a supply contract they are usually a small pass-through line.

B

Bandwidth. The percentage band around your contracted volume within which a fixed price applies. Usage outside the band is priced at market or at a penalty. Also called swing. See contract terms to watch.

Basic generation service (BGS). New Jersey's name for the utility's default supply service for customers who have not chosen a competitive supplier. Other states call it default service, standard offer service, price to compare, or provider of last resort.

Billing demand. The kW figure the utility actually bills you for, which may be higher than your measured peak because of a ratchet or a minimum demand clause.

Block-and-index. A supply contract structure that fixes a price for a block of volume and buys the rest at the hourly market index. See fixed vs. index vs. block-and-index contracts.

Broker. An intermediary that collects your usage, solicits supplier quotes, and helps you choose, paid by an adder embedded in the supplier's price. Licensed or registered in most deregulated states. See how energy brokers get paid and broker vs. going direct.

C

Canopy. The area of plant surface under cultivation, usually measured in square feet, that a license authorizes. Energy benchmarks per square foot are normally per square foot of canopy, not building. See kWh per square foot benchmarks.

Capacity. Generating or demand-side resources committed to be available when the grid operator needs them. PJM defines a capacity resource as a generating unit, demand resource, energy efficiency resource, or aggregate resource obligated to deliver electricity or reduce load whenever PJM determines it is needed to meet system emergencies [pjm-glossary]. Customers in PJM, NYISO, ISO-NE, and MISO pay for capacity through their supply price or as a pass-through.

Change in law. A contract clause allowing the supplier to change the price if a law or regulation changes its cost of serving you. See contract terms to watch.

CO2 enrichment. Raising room carbon dioxide above ambient to increase photosynthesis, using compressed CO2 or a burner. Burners add heat and moisture the HVAC must remove. See CO2 supplementation energy cost.

Coincident peak. Your facility's demand at the moment the grid or utility system peaked, as opposed to your own highest interval. Capacity and transmission charges are often allocated on coincident peaks.

Community solar. A shared solar project whose output is credited to subscribers' bills, letting a facility buy solar credits without installing panels. See community solar for cannabis operators.

Curtailment service provider (CSP). In PJM, the member company that enrolls customers in demand response and pays them for reducing load when asked [pjm-glossary].

D

Default service. The supply the utility provides to customers who have not chosen a competitive supplier. Priced by regulated procurement, and the benchmark any supplier quote should be compared against.

Dehumidification. Removing water vapor from room air. In a sealed grow, most of the irrigation water ends up transpired into the air, and removing it is a major load. See dehumidification load for indoor cannabis.

Delivery charges. The regulated portion of the bill for the wires, transformers, and meters, billed by the utility regardless of who supplies the energy. See understanding your commercial utility bill.

Demand. The rate at which you draw power, in kW, averaged over a metering interval. The highest interval of the month is your peak demand.

Demand charge. EIA defines it as the portion of the consumer's bill for electric service based on the consumer's maximum electric capacity usage [eia-glossary-d]. Billed per kW of your highest interval. See demand charges explained.

Demand response. EIA describes demand response as incentive-based programs that encourage customers to temporarily reduce demand at certain times in exchange for a reduction in their bills [eia-glossary-d]. PJM's program pays customers, through a CSP, for reducing use when requested [pjm-glossary]. See demand response programs for cannabis facilities.

Demand-side management. EIA's term for utility actions that reduce or curtail end-use equipment or processes, generally to reduce load during peak periods [eia-glossary-d]. Efficiency rebates and demand response both fall under it.

Deregulation. The separation of energy supply from delivery so that customers can buy supply from competitors while the utility keeps the wires. See what is energy deregulation.

Distribution. EIA defines it as the delivery of energy to retail customers [eia-glossary-d]. The local wires and transformers between the transmission system and your meter.

DLI (daily light integral). The total photosynthetic light a canopy receives in a day, in moles per square meter per day. It is the product of PPFD and photoperiod length, and it links your lighting choice to your kWh.

E

Early termination fee (ETF). What you owe if you end a supply contract before its term. Can be a flat fee, a per-month charge, or a mark-to-market formula. See contract terms to watch.

Electric generation supplier (EGS). Pennsylvania's licensed competitive supplier category, which also covers brokers and marketers as a sub-type.

Energy charge. The per-kWh portion of the bill, on both the supply and delivery sides.

Energy efficiency resource. In PJM, a permanent reduction in load that can be offered into the capacity market as a resource [pjm-glossary]. LED retrofits sometimes qualify through an aggregator.

Evergreen clause. A renewal clause that keeps a supply contract alive after its term, usually month to month at a supplier-set rate, until cancelled. See contract terms to watch.

F

Fixed price. A supply contract with a constant price per kWh for the term, usually for energy only, with other components fixed or passed through as the contract defines. See fixed vs. index vs. block-and-index.

Full requirements. A supply contract with no bandwidth: the supplier serves whatever you use at the contract price.

G

Generation. The production of electricity. On a bill, the generation or supply charge is the cost of the energy itself as opposed to delivering it.

H

HPS (high-pressure sodium). The older standard for flower-room lighting, typically 1,000 W fixtures. Compared with LED, HPS puts more of its energy into heat that the HVAC must remove. See LED vs. HPS grow lighting.

I

Index price. A supply price that follows the hourly or monthly wholesale market, usually the ISO's LMP, plus an adder.

Interval data. Usage recorded in 15-, 30-, or 60-minute intervals by an AMI meter. The raw material for demand analysis and supplier pricing. See interval data and AMI meters.

Interconnection. The agreement and technical review a utility requires before a customer's generator, solar array, or battery can operate in parallel with the grid.

ISO / RTO. Independent system operator or regional transmission organization. The entity that runs the wholesale market and the transmission grid in a region: PJM, MISO, NYISO, ISO-NE, CAISO, SPP, and ERCOT are the U.S. examples. The ISO you are in decides whether you pay capacity charges and how.

K

kVA. Kilovolt-amperes. The unit of apparent power. Some utilities bill demand in kVA rather than kW, which penalizes poor power factor directly.

kW (kilowatt). A rate of power. 1,000 watts.

kWh (kilowatt-hour). A quantity of energy: 1 kW sustained for one hour. The unit in which energy charges are billed.

kWh per square foot. The standard benchmark for grow facility energy intensity, usually annual kWh per square foot of canopy. See kWh per square foot benchmarks.

L

Latent load. The part of a cooling or dehumidification load that comes from removing moisture rather than lowering temperature. In a grow, the latent load is unusually large because of transpiration.

LED (light-emitting diode). Solid-state lighting that delivers more photosynthetic light per watt than HPS and puts less heat into the room. See LED vs. HPS grow lighting.

Lighting power density (LPD). Installed lighting watts per square foot of canopy. A design input that drives both energy use and HVAC size.

Load. EIA defines an electric load as an end-use device or customer that receives power from the electric system [eia-glossary-l]. In conversation it means the amount of power a facility draws.

Load factor. EIA defines it as the ratio of average load to peak load during a specified time interval [eia-glossary-l]. A flat, round-the-clock facility has a high load factor; a grow whose flower rooms all switch together has a low one, and pays more in demand charges per kWh as a result.

Load serving entity (LSE). PJM's term for any entity, including a load aggregator or power marketer, that serves end users in the PJM area and has the authority or obligation under state or local law to sell electricity to them [pjm-glossary]. Utilities and competitive suppliers are both LSEs.

LMP (locational marginal price). The wholesale price of energy at a specific location and time. EIA describes it as the price reflecting the incremental cost to increase generation to meet demand at a specific location [eia-glossary-l]; PJM adds that it accounts for transmission congestion and losses as well as energy cost [pjm-glossary]. Index contracts settle against it.

M

Mark-to-market. The method of calculating an early termination fee as the difference between the contract price and the current market price for the remaining term, multiplied by the remaining volume.

Minimum demand. A tariff floor on billing demand, often tied to the service size or to a ratchet.

N

Net metering. A billing arrangement that credits a customer's on-site generation against usage, usually at or near the retail rate. Rules and caps vary by state and utility. See on-site solar and battery storage.

NSPL (network service peak load). PJM defines it as a load's contribution to the zone's metered annual peak load [pjm-glossary]. It allocates transmission charges the way PLC allocates capacity charges.

P

Pass-through. A contract clause allowing the supplier to bill certain costs (capacity, transmission, regulatory charges) at whatever they turn out to be rather than fixing them. See contract terms to watch.

Peak demand / peak load. EIA defines peak load as the maximum load during a specified period of time [eia-glossary-p]. On a bill, the highest metered interval in the billing month. See peak demand vs. peak usage.

Photoperiod. The hours of light per day a room runs: 18 hours for vegetative growth and 12 for flowering are the common settings. The lights-on transition sets most grows' demand peak.

PLC (peak load contribution). PJM defines it as an end-use customer's contribution to the zone's weather-normalized summer peak load, as determined by the electric distribution company [pjm-glossary]. Your PLC multiplied by the capacity price is your capacity cost for the year. Lowering your draw during the handful of summer peak hours lowers next year's PLC.

Power factor. EIA defines it as the ratio of real power in kilowatts to apparent power in kilovolt-amperes for a given load and time [eia-glossary-p]. Magnetic ballasts, motors, and some LED drivers lower it, and many tariffs penalize a low reading. See power factor penalties.

Power marketer. EIA describes power marketers as business entities engaged in buying and selling electricity that do not usually own generation or transmission [eia-glossary-p]. Most competitive retail suppliers fit the description.

PPFD. Photosynthetic photon flux density, in micromoles per square meter per second. The light intensity that reaches the canopy, and the number a lighting design targets.

Price to compare. The utility's default supply price expressed per kWh so it can be compared with supplier offers. Used by name in Illinois, Pennsylvania, and Ohio, among others. See what is energy deregulation.

R

Rate class. The tariff category a customer is assigned to based on service size, voltage, and demand. It sets the demand and energy rates you pay. See utility rate classes explained.

Ratchet. A tariff clause that sets billing demand at no less than a percentage of the highest peak in the prior 11 or 12 months. See demand charges explained.

REC (renewable energy certificate). The tradable record that one MWh of renewable electricity was generated. Buying RECs lets a facility claim renewable supply without changing its physical power. See renewable energy certificates for cannabis brands.

Rider. A tariff add-on that recovers a specific cost, such as energy efficiency programs, storm recovery, or capacity, as a separate line on the bill.

RPM (Reliability Pricing Model). PJM's capacity market design, a series of auctions that procure capacity to meet the region's reliability requirement for a delivery year [pjm-glossary]. RPM auction results set the capacity price that flows into your PLC-based capacity charge.

S

Sensible load. The part of a cooling load that lowers temperature, as opposed to the latent part that removes moisture. In a grow, the lights are almost entirely sensible load.

Standby power. Generation or storage that carries selected loads during a utility outage. See backup generators and standby power.

Submetering. Installing meters behind the utility meter to measure individual tenants, rooms, or systems. Required for fair cost allocation in shared buildings. See submetering multi-tenant cannabis buildings.

Supply charges. The portion of the bill for the energy itself, from the utility's default service or a competitive supplier.

Swing. See bandwidth.

T

Tariff. The regulator-approved document that sets a utility's rates, rules, and rate classes. Your delivery charges, demand charges, and ratchet all come from it.

Time-of-use (TOU). A rate that prices energy differently by hour of day and season. Distinct from a demand charge, though the two often appear together.

Transmission. Moving electricity at high voltage from generators to the distribution system. Billed as a delivery component or passed through in a supply contract, and allocated by NSPL in PJM.

U

Utility. The regulated company that owns the wires and meters in a territory and delivers power. In a deregulated state it may or may not also supply the energy.

V

Variable rate. A supply price that changes month to month at the supplier's discretion. Common as the holdover rate after a fixed contract ends, and usually expensive. See fixed vs. variable rate questions.

VPD (vapor pressure deficit). The difference between how much moisture the air holds and how much it could hold at saturation, in kilopascals. The setpoint growers use to manage transpiration, and therefore the number that drives dehumidification load.

W