Load serving entity (LSE) in a deregulated electricity market is a company or government agency that is obligated by law or via a long-term contract to provide electrical power to end-users.
[2] FERC defines the LSE as "any entity, including a load aggregator or power marketer, that serves end-users within a control area and has been granted the authority or has an obligation pursuant to state or local law, regulation, or franchise to sell electric energy to end-users located within the control area".
[1] An LSE can be considered to be a demand aggregator for the end-users or a middleman capable of setting its own prices to extract profit.
[3] Opgrand suggests to classify the LSEs into two distinct types, regulated utilities and unregulated LSEs that have very different incentives with regard to the auction revenue rights (an instrument commonly used in many competitive electricity markets).
[5] Wholesale electricity markets in their current state cannot rely on energy-only pricing to provide the expected grid reliability, thus regulators through the regional transmission organization also obligate the LSEs to pay for the capacity so that there is enough electricity supply available to support the peak demand.