Spark Spread

Think of those old monster movies, where the mad scientist is bringing the dead guy to life, or perfecting his invisibility potion, or whatever. The set design invariably includes a machine that has electricity arcing between two giant metal balls. One kind of spark spread.

The other involves the electricity generation business (which might involve a machine where electricity arcs between two metal balls...it probably depends on state regulations).

The term "spark spread" refers to the difference between the wholesale price of electricity and the cost of producing that electricity. The "spread" in question equates to the gross margin for a unit of electricity. After all, providing electricity doesn't involve catching lightning with a giant apparatus (despite what monster movies say). It usually involves buying some kind of fuel (coal, natural gas, etc.) and then using that fuel to run big machines that generate electricity.

The cost of production (including the fuel) provides one side of the spark spread. The other component involves the market price for the electricity. That figure represents the amount the electricity-generating firm can get for the product. Comparing those figures provides the spark spread.