Texas TCUP Cultivation Facility Energy: Low-THC Grows, ERCOT Supply, and Oncor 4CP Demand

A restricted program, not an open cultivation market

HB 46 replaced the 1% THC-by-weight cap with 10 mg THC per serving and one gram per package, added chronic pain and other conditions, and permitted satellite storefronts [tlo-hb46]. Conditional licensees from DPS Phase I and Phase II selections have 24 months to become operational after final approval [dps-tcup-phase-2]. New campuses under construction in 2026 and 2027 will add load in Oncor and CenterPoint territories, not across a broad license base.

Load profile in a hot, humid climate

Statewide normals average 2,809 cooling degree days and 1,818 heating degree days [noaa-cag-texas]. Houston-area TCUP sites face dew points in the 70s F from May through September, making dehumidification a primary HVAC design problem [noaa-cag-texas]. Dallas is humid but less extreme; west Texas is dry [noaa-cag-texas]. Cooling dominates indoor grow energy nearly year-round; winter heating is minor except in the Panhandle [noaa-cag-texas].

Assume a purpose-built 30,000 sq ft TCUP cultivation facility with LED at 35 W per sq ft:

Load component	Connected kW	Notes
Lighting	1,050	Flat 18-hour photoperiod
HVAC and dehumidification	500	Year-round cooling; latent load on Gulf Coast
CO2 enrichment	30	Minor but continuous during photoperiod
Irrigation and controls	40	Minor
Total connected	1,620	Staged HVAC reduces coincidence

Realistic summer peak: 600 to 750 kW on Oncor Secondary Service Greater Than 10 kW [oncor-tariff]. A CenterPoint Houston site with the same canopy may run 10 to 20 percent higher HVAC kWh because of latent load [noaa-cag-texas].

Oncor delivery class and ratchet

Oncor Tariff for Retail Delivery Service effective June 1, 2026 [oncor-tariff]:

Schedule	Threshold	Billing demand
Secondary Service ≤ 10 kW	Small load	Energy-only
Secondary Service > 10 kW	Cultivation typical	Greater of current NCP or 80% of highest prior 11-month NCP
Primary Service > 10 kW	Larger campuses	Same ratchet; lower $/kW at primary voltage
Transmission Service	4CP-billed classes	4CP kW updated January 1

Transmission bills on 4CP kW updated each January 1 [oncor-tariff]. A premise stays on the greater-than-10 kW schedule until it has 12 consecutive months below 10 kW [oncor-tariff]. Seasonal agricultural customers are exempt from the ratchet [oncor-tariff]; TCUP grows do not qualify for that exemption.

CenterPoint Houston Electric uses a similar secondary and primary structure with NCP billing demand, an 80% ratchet, and 4CP transmission allocation [ercot-retail-market].

Worked monthly cost example (summer)

Assume 650 kW billing demand (after ratchet), 250,000 kWh monthly, Oncor delivery plus REP energy at Texas commercial average 8.66 cents/kWh [eia-epm-5-6-a] [oncor-tariff]:

Line item	Calculation	Monthly cost
REP energy (assume 8.66 cents)	250,000 x $0.0866	$21,650
Oncor distribution demand (estimate)	650 kW x ~$4/kW	~$2,600
TDU energy pass-through (estimate)	250,000 x ~$0.025	~$6,250
4CP transmission (estimate)	650 kW x ~$5/kW	~$3,250
Total estimate		~$33,750

Actual TDU $/kW varies by schedule section. Pull current Oncor tariff Section 6.1.1.1 before quoting [oncor-tariff]. At 8.66 cents/kWh energy only, the same facility would bill about $21,650 for supply; delivery and transmission add roughly 56 percent on top in this example.

A block-and-index REP contract can cap energy exposure during ERCOT price spikes [ercot-retail-market]. See fixed vs. index vs. block-and-index contracts.

4CP management for TCUP grows

ERCOT allocates transmission based on average demand at four system-peak 15-minute intervals (one each in June, July, August, September) [oncor-tariff]. A grow that curtails or shifts lighting during ERCOT peak alerts avoids a full year of elevated transmission cost.

Practical tactics for a TCUP campus:

1. Monitor ERCOT peak forecasts during summer afternoons.
2. Dim or shift non-critical lighting 15 to 30 minutes during predicted system peaks.
3. Pre-cool rooms before peak windows so HVAC compressors idle during the interval.
4. Track 4CP kW on the January TDU bill reset to measure last season's exposure.

Even a partial 50 kW reduction across four events can change the following year's 4CP kW assignment [oncor-tariff].

REP contract choice

Every ERCOT choice-area customer must select a REP [ercot-retail-market]. There is no default supply to fall back on. Options include fixed, index, and block-and-index structures. A TCUP facility with predictable baseload suits a block-and-index contract: fixed block for lighting load, index for variable HVAC.

Industrial customers averaged 6.58 cents per kWh in June 2026 against 8.66 cents commercial [eia-epm-5-6-a]. A large campus with high load factor and primary voltage may negotiate REP supply closer to the industrial line even when TDU class keeps the account on secondary service [oncor-tariff].

Primary voltage for large TCUP campuses

Purpose-built TCUP cultivation sites approaching 1 MW may qualify for Oncor Primary Service Greater Than 10 kW at distribution line or substation voltage with lower per-kW delivery charges than secondary service [oncor-tariff]. Primary service requires utility engineering review and higher interconnection cost upfront. Model twenty-year total cost of ownership before choosing secondary vs. primary at the same campus [oncor-tariff].

Oncor efficiency incentives for new builds

Oncor's Commercial Standard Offer Program pays deemed LED incentives at $209.21 per kW plus $0.057 per kWh of verified summer peak savings, with M&V tracks for horticultural lighting outside the PUCT Technical Reference Manual [oncor-csop-2026]. Engage an approved service provider during design for conditional TCUP campuses building under HB 46 [tlo-hb46]. CenterPoint runs a parallel Commercial SOP in Houston territory [cnp-csop].

HB 46 conditional campus energization timeline

HB 46 raised TCUP dispensing organization licenses from 3 to 15 with nine conditional licensees announced December 1, 2025 and three on April 1, 2026 [dps-tcup-phase-2] [tlo-hb46]. Conditional licenses do not permit cultivating until final DPS approval, but buildouts underway in 2026 will energize Oncor and CenterPoint load in phases [dps-tcup-phase-2].

Each new licensee has 24 months to become operational after final approval [dps-tcup-phase-2]. Electrical service applications should align with DPS inspection milestones so ratchet-setting peaks do not occur during empty-facility HVAC test runs [oncor-tariff].

Block-and-index supply for predictable lighting baseload

TCUP campuses with flat 18-hour lighting load suit block-and-index REP contracts: a fixed block for lighting kWh and index pricing for variable HVAC [ercot-retail-market]. Compare fixed vs index vs block-and-index contracts with TDU pass-through language spelled out. Industrial customers averaged 6.58 cents per kWh in June 2026 against 8.66 cents commercial [eia-epm-5-6-a]; large high load-factor sites may negotiate REP supply closer to the industrial line [oncor-tariff].

Annual kWh and cost stack for the TCUP example

Using the 30,000 sq ft purpose-built TCUP facility assumptions above [noaa-cag-texas] [eia-epm-5-6-a]:

Load	Connected kW	Annual kWh (assume)
Lighting	1,050	6,897,000
HVAC	500 avg	4,380,000
Other	70 avg	613,200
Total		11,890,200

At 8.66 cents/kWh REP energy only, annual supply is about $1,029,700 [eia-epm-5-6-a]. Add Oncor delivery energy, distribution demand on 650 kW ratchet billing demand, and 4CP transmission from the worked monthly example scaled to twelve months [oncor-tariff]. All-in cost often lands 40 to 60 percent above the EIA commercial average for peaky cultivation [eia-epm-5-6-a] [oncor-tariff].

CenterPoint dehumidification premium on Gulf Coast TCUP sites

Houston TCUP campuses on CenterPoint wires face dew points in the 70s F from May through September, adding latent load versus Dallas Oncor sites at the same canopy [noaa-cag-texas] [ercot-retail-market]. Expect 10 to 20 percent higher HVAC kWh and slightly higher peak kW on identical lighting schedules [noaa-cag-texas]. REP contract structure is the same; TDU territory drives HVAC capital and operating cost [ercot-retail-market] [oncor-tariff].

Witness test and primary service study timing

Purpose-built TCUP campuses approaching 1 MW should request Oncor primary service studies during design, not after equipment is ordered [oncor-tariff]. Witness tests require one-line diagrams showing lighting, HVAC, and dehumidifier circuits before energization [oncor-tariff]. Primary voltage lowers per-kW delivery but adds transformer capital; model twenty-year total cost before choosing secondary service at the same site [oncor-tariff] [dps-tcup-phase-2].

Where to go next

• Texas hub for TCUP and ERCOT overview.
• Commercial electricity rates.
• How to switch REPs.
• Dehumidification load in indoor cannabis.
• HVAC sizing for grow rooms.

Confirm current Oncor tariff $/kW and TCUP licensing with DPS before capital planning.