Texas 4CP Season Is Live: Peak Hours in June Are Already Setting Your 2027 Transmission Charges

ERCOT's Four Coincident Peak (4CP) season opened June 1, 2026, and the four 15-minute intervals that hit between now and September 30 will lock in every Texas commercial buyer's transmission charges for calendar year 2027. ERCOT projects a 95 gigawatt summer peak this year, up from the 83.9 GW record set in 2025, which means the demand hours setting 2027 charges are on track to be the most expensive on record.

What Happened

The 4CP window officially opened June 1, 2026 and runs through September 30. ERCOT will designate the single highest 15-minute grid-wide demand interval from each of the four summer months. The arithmetic average of a customer's kilowatt load across those four intervals sets its 2027 transmission charge. ERCOT's 2026 load forecast anticipates a 95 GW summer peak, an 11.1 GW jump over the 2025 record of 83.9 GW. Texas Senate Bill 6, signed in 2025, also directs the Public Utility Commission of Texas to amend the 4CP methodology no later than December 31, 2026, which means this summer's peaks land inside a rulebook that is scheduled to change.

Primary sources: the grid operator at ercot.com, the commission docket at puc.texas.gov, and the federal demand outlook at eia.gov.

Impact on Commercial Electricity Buyers in Texas

A record-setting 4CP season converts to real dollars on demand-metered commercial accounts because transmission charges scale with the four-interval peak, not average consumption. In the plans we track across all five Texas TDU territories, we see three channels where this year's peaks reach your bill.

Transmission cost recovery factor (TCRF). The TCRF rider is how each TDU recovers transmission investment from customers. Oncor's transmission class rate is approximately $40,742.58 per MW-year based on 2025 filings, which puts a 500 kW commercial customer at roughly $20,371 annually in 4CP-driven transmission charges. CenterPoint and AEP Texas territories run comparable ranges of $20,000 to $38,000 per year for the same peak. Demand-related charges can account for 30 to 70 percent of a large Texas commercial electricity bill.

Forward pricing. Retail electric providers embed 4CP risk into fixed offers. In our commercial plan catalog, 386 short-term plans (12 months or fewer) price at an average of 11.43 cents/kWh, while 40 long-term plans (24 months or more) price at 7.87 cents/kWh. The 45 percent premium in short-term pricing reflects, among other things, providers' cost of the unknown 4CP transmission exposure they absorb on shorter contracts.

Contract timing. A customer signing a fixed rate in June or July is contracting inside the current 4CP methodology, but that methodology is scheduled to change by December 31, 2026 under SB6. Term length and non-bypassable charge provisions become the negotiating points that matter most in any offer signed during peak season.

The Four-Quarter 4CP Response Playbook: Four Questions Before Peak Season Ends

Most 4CP guidance stops at "reduce load between 3 and 6 PM", which is technically correct and operationally useless without a year-round program. The framework below organizes 4CP defense into four phases, one for each of the four peaks, so a commercial buyer can run the same checklist through every quarter of the calendar year.

1. Q1 Monitor: did we reconcile last year's 4CP against our interval data?

January through March, confirm the prior-year 4CP result with your TDU and retail provider, verify billing against your interval data recorder, and subscribe to ERCOT TXANS demand alerts plus a storage-adjusted 4CP tracker if your account is large enough to justify one.

2. Q2 Model: which top 20 intervals last summer are we defending against?

April through May, pull last summer's 15-minute interval data from SmartMeterTexas or your provider's portal, identify the top 20 highest demand intervals, map equipment or processes running in each, and rank curtailment options by megawatt-shift capacity per hour of production loss.

3. Q3 Mitigate: are our peak-day levers ready before 3 PM?

June through September, execute during peak-risk days by pre-cooling buildings before 3 PM, raising HVAC set points 4 to 5 degrees during the 3 to 6 PM window, staggering heavy-equipment start-ups, and deferring non-essential process load, backed by curtailment software that consumes ERCOT operational data plus a battery-adjusted estimate.

4. Q4 Measure: what did we actually save, and does it change our next contract?

October through December, wait for ERCOT to publish settlement 4CP intervals (typically 60 days after month-end), calculate the megawatt reduction achieved versus baseline, convert to dollar savings using your TDU's applicable transmission rate, and feed the result into your next contract decision.

What You Should Do

Turn 4CP season into three moves you can make in the next 30 days, whether your contract renews soon or you are just watching the market. These steps work whether June's peak has already landed or not, because three of the four intervals remain in play.

Pull your monthly bills and confirm whether your account is demand-metered and subject to 4CP allocation, which generally means monthly peaks above 700 kW.
Request your interval data from your TDU (SmartMeterTexas) and identify your top 20 demand intervals during last summer's 3 to 6 PM window as the curtailment target list.
Compare current published commercial offers for your TDU territory against your existing rate, focusing on how each provider handles pass-through demand charges versus fixed transmission recovery.

Questions to Ask Your REP or Broker

Before signing any new commercial contract during peak season, use these questions to separate a good rate from one that quietly assumes a low-4CP customer profile you may not fit.

Does this quoted rate include 4CP-driven transmission recovery, or is it pass-through on demand-metered accounts?
How does the contract handle changes to PUCT 4CP methodology under SB6, which must be finalized by December 31, 2026?
What is the early termination fee if I sign a 24 or 36 month term now and the market moves after the new 4CP rules take effect?
Can you show me your assumed 4CP demand for my account, and how it compares to my actual last-year 4CP result?

Frequently Asked Questions

When is the 2026 Texas 4CP season?

The 4CP season runs June 1, 2026 through September 30, 2026. ERCOT confirms each month's coincident peak interval after settlement, typically 60 days after month-end. The four monthly peaks combine into a single average kilowatt demand that sets each demand-metered customer's transmission charge for calendar year 2027.

How much do 4CP transmission charges cost a Texas business?

For a 500 kW commercial customer, 4CP-driven transmission charges run roughly $20,000 to $38,000 per year depending on TDU territory. Oncor's transmission class rate was approximately $40,742.58 per MW-year in 2025 filings. On a large demand-metered account over 700 kW, transmission is frequently the single largest line on the invoice.

Does 4CP apply to small businesses in Texas?

Direct 4CP billing applies to demand-metered accounts, generally those with monthly peaks above 700 kW. Small businesses do not see 4CP as a distinct line item on their bill but do absorb it indirectly through the retail commercial rates their electric providers charge, since providers embed forward transmission cost recovery into fixed-rate offers.

How does Senate Bill 6 change the 4CP program?

Texas SB6 requires the Public Utility Commission of Texas to amend the 4CP methodology no later than December 31, 2026. Expected changes include some level of non-bypassable transmission recovery, potentially new peak seasons or interval definitions, and adjustments to how highly flexible loads (including large batteries and cryptocurrency operations) contribute to transmission cost recovery.