PUCT 4CP to 12CP Proposal: Why Texas Growers Should Rethink Peak Management

From four peaks to twelve

ERCOT currently allocates transmission costs using Four Coincident Peak (4CP) methodology [ercot-4cp-mechanics]. Each customer's share is based on demand during the four highest 15-minute system peak intervals during June through September [ercot-4cp-mechanics].

The Public Utility Commission of Texas proposed moving to Twelve Coincident Peak (12CP) by December 31, 2026 [puct-12cp-proposal]. Under 12CP, twelve system peak intervals would determine transmission cost allocation instead of four [puct-12cp-proposal].

For Texas cannabis cultivators, this widens the peak management window from four critical events to twelve.

How 4CP works today

Element	Detail
Season	June through September [ercot-4cp-mechanics]
Intervals counted	4 highest ERCOT system peaks
Billing impact	TDU transmission charges following year
Cultivator risk	Peak during one of four intervals = higher share

Operators who successfully curtailed load during the four known peak days minimized transmission allocation [ercot-4cp-mechanics]. Facilities that peaked during those intervals paid more the following year regardless of REP supply rate.

ERCOT set a record peak of 91,308 MW on July 22, 2026 [ercot-peak-2026], increasing the number of high-demand days that could qualify as coincident peaks.

What 12CP would change

12CP triples the number of peak intervals that matter [puct-12cp-proposal]. Instead of optimizing for four days, operators must manage load across a broader set of summer peak events.

Method	Peak intervals	Strategy focus
4CP (current)	4 [ercot-4cp-mechanics]	Hit four days hard, curtail sharply
12CP (proposed)	12 [puct-12cp-proposal]	Consistent management all summer

A grow that reduced load on four peak days but ran flat out on eight other near-peak days might pay less under 4CP than under 12CP [puct-12cp-proposal].

Why cultivators are exposed

Indoor cannabis facilities maintain high baseload from lighting schedules. HVAC adds variable demand on hot afternoons. The combination peaks during the same 3 to 6 PM window when ERCOT system demand often maxes out [ercot-4cp-mechanics].

Under 4CP, an operator might:

• Stagger one room's lights off during suspected peak hours
• Pre-cool rooms before 3 PM
• Curtail non-essential load on hot days when ERCOT issues advisories

Under 12CP, that strategy must extend across more days because near-peak intervals count toward the twelve [puct-12cp-proposal].

Worked example: transmission cost share

Assume a 400 kW cultivation facility in Oncor territory. Illustration only.

4CP scenario: Facility peaks at 400 kW during 2 of 4 system peaks and 350 kW during the other 2. Average contribution: 375 kW across 4 intervals [ercot-4cp-mechanics].

12CP scenario: Same facility peaks at 400 kW during 4 intervals, 380 kW during 4 more, and 360 kW during 4 others. Average contribution: 380 kW across 12 intervals [puct-12cp-proposal].

If transmission costs allocate proportionally, the 12CP average could be higher because more high-demand intervals are included. Actual tariff formulas will be defined in the final PUCT rule [puct-12cp-proposal].

Annual transmission pass-through on a large Oncor account might run $30,000 to $80,000 depending on load size. A 10% change in 4CP/12CP allocation share moves $3,000 to $8,000 per year.

Interaction with Oncor rate changes

Oncor's April 2026 base rate order and October TCRF update changed delivery charges separately from 4CP/12CP methodology [ercot-4cp-mechanics]. See Oncor rate order analysis.

4CP/12CP affects transmission allocation. Base rate and TCRF affect delivery tariff rates. Both stack on the TDU portion of the bill.

Preparing for the transition

1. Pull interval data for June through September 2026 from your REP or TDU.
2. Identify all days when your facility peaked above 90% of maximum, not just the four highest.
3. Model 12CP contribution using twelve highest intervals instead of four [puct-12cp-proposal].
4. Adjust lighting schedules before the 2027 4CP/12CP season if the rule takes effect December 31, 2026 [puct-12cp-proposal].
5. Review battery or DR options that curtail automatically during ERCOT peak advisories.

See ERCOT 4CP season lighting scheduling for current-season tactics.

REP supply is separate

Switching Retail Electric Providers does not change 4CP or 12CP transmission allocation [ercot-4cp-mechanics]. REP contracts cover energy supply. TDU charges cover delivery and transmission pass-through.

Shop REP rates for supply savings. Manage peaks for transmission allocation. Both matter for total cost.

Texas low-THC program growth

Texas expanded dispensing organization licenses under HB 46. New facilities in ERCOT should design load management for 12CP from commissioning, not retrofit after the rule change [puct-12cp-proposal].

See Texas cultivation facility energy and peak demand vs peak usage.

Practical light-scheduling tactics for 12CP

Under 4CP, some operators ran aggressive curtailment on days when ERCOT issued conservation appeals [ercot-4cp-mechanics]. Under 12CP, near-peak days that never triggered alerts still count [puct-12cp-proposal].

Tactics that spread more evenly across the summer:

• Offset flower-room light-on times by 30 to 60 minutes between rooms
• Run dehumidification banks in rotation rather than all at once
• Pre-cool rooms before 2 PM and raise setpoint slightly during 3 to 6 PM
• Schedule irrigation pumps and fertigation outside peak hours

Each tactic reduces daily peak contribution without shutting down production entirely [puct-12cp-proposal].

Monitoring ERCOT system load during 4CP season

ERCOT publishes real-time system load data publicly [ercot-peak-2026]. Facilities with operations staff can watch load trends on high-temperature days and trigger curtailment protocols when system demand approaches prior peak records [ercot-4cp-mechanics].

Record July 22, 2026 peak of 91,308 MW as a reference [ercot-peak-2026]. Days approaching that level are high risk for coincident peak inclusion under either 4CP or 12CP methodology.

Low-THC operators in ERCOT

Texas HB 46 expanded dispensing organization licenses [puct-12cp-proposal]. New low-THC facilities energizing in Oncor or other TDU territories should design load management for 12CP from commissioning rather than retrofitting after the rule change [puct-12cp-proposal].

Budget REP supply separately from TDU delivery and transmission. Both change on different schedules [ercot-4cp-mechanics].

Preparing for twelve coincident peaks

If the PUCT moves from four to twelve CP measurements, spreading load across more intervals helps but does not eliminate transmission exposure [puct-12cp-proposal]. Document your current 4CP history and simulate twelve monthly peaks using interval data to see how charges would have differed last year.

Building a 12CP simulation from 2026 interval data

Pull June through September 2026 interval data from your REP or TDU portal [ercot-4cp-mechanics]. Identify the twelve highest fifteen-minute facility demand intervals, not just the four highest [puct-12cp-proposal]. Sum your kW contribution on those twelve intervals and compare to the sum on the top four only.

If the twelve-interval average exceeds the four-interval average by more than five percent, 12CP likely costs you more than 4CP would have under the same total transmission budget [puct-12cp-proposal]. Use that gap to justify load scheduling capital or battery sizing.

EMS automation for summer curtailment

Manual curtailment on four peak days is manageable. Twelve peak intervals spread across twelve or more days requires automation [puct-12cp-proposal]. Energy management systems can shed non-critical HVAC stages, delay irrigation pumps, or rotate dehumidifier banks when facility demand exceeds a setpoint [ercot-4cp-mechanics].

ERCOT publishes real-time system load publicly [ercot-peak-2026]. Pair system load triggers with facility demand limits so curtailment runs on high-risk days even when no conservation appeal is issued [puct-12cp-proposal]. Under 12CP, near-peak days that never trigger alerts still count toward transmission allocation.

Battery economics under wider peak windows

A battery sized to shave 100 kW from daily peaks for thirty summer days delivers more value under 12CP than under 4CP because more days benefit [puct-12cp-proposal]. Size power capacity in kW to the gap between lighting baseline and peak HVAC load [ercot-4cp-mechanics].

Repay period equals battery cost divided by annual transmission savings plus any demand charge reduction on the TDU bill [ercot-4cp-mechanics]. Run the math separately for 4CP and 12CP scenarios if the PUCT rule takes effect December 31, 2026 [puct-12cp-proposal].

Low-THC dispensary vs indoor cultivation exposure

Texas low-THC dispensaries draw lower peak demand than indoor cultivation but still peak during afternoon retail HVAC hours [puct-12cp-proposal]. Dispensaries at 80 kW contribute less absolute kW to coincident peaks than 400 kW grows but face the same transmission allocation methodology [ercot-4cp-mechanics]. Small loads still pay a share proportional to their contribution on peak intervals [puct-12cp-proposal].

Documenting curtailment for internal ROI tracking

Log every curtailment event with timestamp, kW before, kW after, and room affected [ercot-4cp-mechanics]. If 12CP takes effect, this log proves which intervals you successfully shaved and guides next year's protocol [puct-12cp-proposal]. Operations teams that curtail without measuring results cannot improve scheduling year over year [ercot-peak-2026].

The PUCT proposal targets implementation by December 31, 2026 [puct-12cp-proposal]. Facilities should run 2026 summer operations under 4CP rules while modeling 12CP exposure from the same interval data [ercot-4cp-mechanics]. If the rule change is delayed, the 12CP simulation still identifies high-demand days worth managing under current 4CP methodology [puct-12cp-proposal].

Share interval analysis with your REP account manager. Some REPs offer advisory alerts on high system load days that help operations teams trigger curtailment protocols [ercot-peak-2026]. See Texas cultivation facility energy for ERCOT load benchmarks used in 4CP planning [ercot-4cp-mechanics].