Wind Energy Glossary
Glossary Term | Definition |
|---|---|
| Net Present Value | A common financial concept (and a critical component of Minnesota’s C-BED tariff), reflecting the idea that having a given amount of money today is more valuable than receiving the same amount of money in the future. C-BED requires utilities to determine the net present value of their rate schedule using the standard discount factor that they apply to their other business decisions. |
| Network Resource | An electrical generator that can provide support to the system in terms of real or reactive power supply, spinning reserve, or other services that the system operator requires to keep the system operating in a safe and reliable manner. Generally wind projects can only qualify as an energy resource because of their non-dispatchable nature, i.e. |
| Non-Utility Generator (NUG) | A generator that is owned and operated by an entity which is not a regulated electric utility. |
| O&M (Operations and Maintenance) Agreement | The contract for operating and maintaining a project which defined terms, fees, schedules, and other details. |
| Off-Peak Power | Electricity supplied during periods of low system demand. |
| Off-Taker | The purchaser of the electricity from a wind project, for example: a utility company. |
| Pad Mount Transformer | A electric transformer that is mounted on the ground as opposed to a pole mounted transformer. A pole mounted transformer is mounted on a pole that holds electric power lines. |
| Pass-Through Entity | A business structure that allows tax credits and operating gains and losses to be allocated to the owners of the business rather than the business itself, which prevents the income of the business from being taxed twice. |
| Passive Income | Certain types of income, as defined by the IRS, such as rental income or income from businesses, in which the earner serves only as an investor and is not actively engaged in running the investment as defined by the IRS. See Passive Tax Appetite. |
| Passive Tax Appetite | Income from certain types of investments qualifies as passive income. Tax paid on this income is considered passive tax. To take advantage of the Federal Production Tax Credit (the PTC) and Modified Accelerated Cost Recovery System (MACRS), you or a project partner must be paying taxes that fit into this category of tax liability. |
| Payments-In-Lieu-of-Taxes (PILOT) | Negotiated payments between the local taxing authority and a wind project. These payments compensate for excessive use of infrastructure in the area while developing the project and allow the local community to benefit from wind energy development. |
| Peak Demand | The greatest demand placed on an electric system; measured in kilowatts or megawatts; also, the time of day or season of the year when that demand occurs. |
| Peak Load | The amount of electric power required by a consumer or a system during peak demand; measured in kilowatts or megawatts. |
| Plat Drawings | A map showing politically defined sections and townships that shows who holds the deed to the parcels of land contained within. |
| Power Curve | The instantaneous power output of a specific turbine design at various wind speeds. Used with wind resource data to determine the potential for electricity generation at a project site. |
| Power Purchase Agreement | The contract to buy the electricity generated by a power plant. Securing a good PPA is often one of the most challenging elements of wind project development. |
| Pro forma | Comprehensive financial analysis of a business or project. |
| Pro rata | In proportion to, as determined by a specific factor. Example: tax credits are allocated to project owners in direct proportion to the percentage of the project they own. |
| Production Tax Credit (PTC) | Provides the owner of a qualifying facility with an annual tax credit based on the amount of electricity that is generated. By focusing on the energy produced instead of capital invested, this type of tax incentive encourages projects that perform adequately. In 2007, the rate for the PTC is 1.9¢/kWh. The PTC increases from year to year based on the consumer price index. |
| Public Utility Commission (PUC), Public Services Commission (PSC) or Utility Board | A state government agency responsible for the regulation of public utilities within a state or region. A state legislature oversees the PUC by reviewing changes to utility laws, rules, and regulations and approving the PUC's budget. The commission is usually made up of Commissioners appointed by the governor or legislature for a specific term which varies from state to state. |
| Public Utility Regulatory Policy Act (PURPA) | A federal law passed in 1978 that requires electric utilities to purchase electricity produced from certain efficient power producers (frequently using renewable or natural gas resources). Utilities purchase power at a rate equal to the costs they avoid by not needing to generate the power themselves. |
| Reactive Power Support | This is the production of reactive power to maintain stability on the transmission system. Power on the system comes in two main types: the first is the power that is actually delivered to end users, and the second is reactive power, which is power provided to the system to maintain the system, rather than for end-use consumption. |
| Renewable Energy Credits (RECs) | The “green” or renewable attribute of electricity that is generated utilizing a renewable energy resource. A wind turbine that produces 1 MWh of electricity has produced 1 REC which, in some electricity markets, can be sold separately from the electrical power. |
| Renewable Energy Production Incentive (REPI) | A federal production payment of 1.5¢ per kWh that is made available to new qualifying renewable energy generation facilities. However, since the REPI involves spending of federal funds, money must be appropriated annually by Congress. |
| Renewable Portfolio Standard (RPS)/Renewable Electricity Standard (RES) | A minimum renewable energy requirement for a region's electricity mix. Under an RES, electricity suppliers are required to provide some percentage of its supply from renewable energy sources. RPS proposals frequently ease that requirement by including a tradable credit system under which electricity suppliers can meet the requirement by buying and selling renewable energy credits (RECs). |