Capstone Energy Services

Energy Basics

Terms A-Z


A transaction that results in the transportation of gas in a direction opposite of the aggregate or normal physical flow of gas in the pipeline.


Making receipts and deliveries of gas into or withdrawals from a company equal. Balancing may be accomplished daily, monthly or seasonally, with penalties generally assessed for excessive imbalance.

Balancing Agreement

A contractual agreement between two or more entities to account for differences between chart measured quantities and the total confirmed nominated quantities at a specific point.

Balancing Penalty

A daily or monthly penalty assessed on the difference between volumes tendered and volumes received by the shipper. The purpose of balancing penalties is to prevent a shipper from tying up storage and line pack with excess deliveries of transportation gas, or from depleting storage and line pack by taking more gas off the system than it delivers, both of which disrupt other sales and transportation services.

Base Conditions

The ANSI Z132 has established 60oF and 14.73 psia as the base temperature and pressure to which all volumes are commonly referred.

Base Contract Price

The stated per unit price for natural gas in a contract between a producer and a purchaser.

Base Cost of Gas

The component in a utility tariff rate which represents the average expected cost of purchased gas.


The minimum amount of electric power delivered or required over a given period of time at a steady rate. As applied to gas, a given consumption of gas remaining fairly constant over a period of time, usually not temperature-sensitive.

Base Tariff Rate

The effective rate on file with the Commission, excluding adjustments.


one billion cubic feet.

Best Efforts

An agreement by a contracting party to do its best to complete some specified result. In a gas transportation contract, it might represent a pledge by the transporter to use best efforts to transport the shipper's gas. BESS is the acronym for best efforts storage service.

Billing Cycle

The regular, periodic interval used by a utility for reading the meters of customers for billing purposes; typically monthly or bi-monthly.

British Thermal Unit (Btu)

The quantity of heat necessary to raise the temperature of one pound of water from 58.5 to 59.5 degrees Fahrenheit under standard pressure of 30 inches of mercury at or near its point of maximum density. One Btu equals 252 calories, 1,055 joules or 0.293 watt hours.


An entity that arranges the sale and purchase of electricity, natural gas and other services between buyers and sellers, but does not take title to any of the power sold.

Btu Adjustment Clause

A clause in a gas purchase contract that may adjust the contract price if the heat content of the gas delivered does not fall within a specified range.

Bundled Sales Service

Natural gas sold on an as-needed basis, without prior scheduling and without any pricing component itemization.

Bundled Utility Service

An energy supplier, usually a utility, that combines generation, transmission, and distribution services for a single charge. This charge would include ancillary services and retail services. Some non-utility supplier bill combine (or bundle) various components of generation and delivery charges.

Burner Tip

A generic term that refers to the ultimate point of consumption for natural gas.

Buy-Out Costs (Buy-Down Costs)

Payments made by pipelines to producers to extinguish (buy-out) outstanding take-or-pay liabilities under existing contracts, or to reform (buy-down) the contracts.

Buyer's Right of First Refusal

In negotiating situations where the seller of gas has the right to solicit third-party bids for his gas, a right of first refusal provision gives the buyer of the gas the option of meeting the third party bid price and continuing the contract on such terms.


1) An auxiliary piping arrangement, generally to carry gas around specific equipment or an integral section of a piping system. A by-pass is usually installed to permit passage through the line while adjustments or repairs are made on the section which is by-passed. 2) Obtaining natural gas service from a new supplier without utilizing the facility of the former supplier or utility by installing a line to an alternative pipeline system.

Energy Facts

Energy Facts

Natural gas can be used as a raw material in a variety of products, including paint, fertilizer, plastics and medicines.

Natural gas produces fewer emissions than other fossil fuels, with less nitrogen, sulfur, carbon and fine particulates.

Texas produces the largest amount of natural gas in the USA.

The biggest consumer of coal in the US is the electric power sector.

There are 17,658 electric utility generators in the USA.

Energy Delivery Chains

Energy Delivery Chains

Find out more about how your energy is produced and delivered to your business.

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Energy & the Environment

Energy & the Environment

How we assist clients in responding to national environmental concerns.

  • Initiate and manage a "Green" energy procurement program
  • Evaluate national legislative and regulatory initiatives
  • Research state and local energy efficiency programs and incentives
  • Track energy use and related emissions estimate