GLOSSARY OF TERMS
Average weather: equal to the 25-year average degree days based on temperatures established in our 2003 Oregon general rate case.
Interruptible service: natural gas service offered to customers (usually large commercial or industrial users) under contracts or rate schedules that allow for interruptions when necessary to meet the needs of firm service customers.
Bcf: one billion cubic feet, a volumetric measure of natural gas, roughly equal to 10 million therms.
Liquefied natural gas (LNG): the cryogenic liquid form of natural gas. To reach a liquid form at atmospheric pressure, natural gas must be cooled to approximately -260 degrees Fahrenheit.
Btu: British thermal unit, a basic unit of thermal energy measurement. One Btu equals the energy required to raise one pound of water one degree Fahrenheit at atmospheric pressure and 60 degrees Fahrenheit. One hundred thousand Btu’s equal one therm.
Purchased gas adjustment (PGA): a regulatory mechanism for adjusting customer rates due to changes in the cost to acquire and deliver natural gas supplies.
Core utility customers: residential, commercial and industrial customers on firm service from the utility.
Return on equity (ROE): a measure of corporate profitability, calculated as net income divided by average common stock equity. Authorized ROE refers to the equity rate approved by a regulatory agency for utility investments funded by common stock equity.
Cost of gas sold: the delivered cost of natural gas sold to customers, including the cost of gas purchased or withdrawn from storage inventory, gains and losses from gas commodity hedges, pipeline demand costs, seasonal demand cost balancing adjustments, regulatory gas cost deferrals and company gas use.
Sales service: service provided whereby a customer purchases both natural gas commodity supply and transportation from the utility.
Decoupling: a rate mechanism, also referred to as our conservation tariff, which is designed to break the link between earnings and the quantity of natural gas consumed by customers. The design is intended to allow the utility to encourage customers to conserve energy while not adversely affecting its earnings due to reductions in sales volumes.
Therm: the basic unit of natural gas measurement, equal to 100,000 Btu’s. An average residential customer in our service area uses about 700 therms annually in average weather conditions.
Degree days: units of measure that reflect temperature-sensitive consumption of natural gas, calculated by subtracting the average of a day’s high and low temperatures from 65 degrees Fahrenheit.
Transportation service: service provided whereby a customer directly purchases natural gas commodity from a supplier but pays the utility to transport the gas over its distribution system to the customer’s facility.
Demand cost: a component in all core utility customer rates that covers the cost of securing firm pipeline capacity to meet peak demand, whether that capacity is used or not.
Utility margin: utility gross revenues less the associated cost of gas sold and applicable revenue taxes. Also referred to as utility net operating revenues.
Firm service: natural gas service offered to customers under contracts or rate schedules that will not be disrupted to meet the needs of other customers, particularly during cold weather.
Weather normalization: a rate mechanism that allows the utility to adjust customers’ bills during the winter heating season to reduce variations in margin recovery due to fluctuations from average temperatures.
General rate case: a periodic filing with state or federal regulators to establish equitable rates and balance the interests of all classes of customers and our shareholders.