Texas Cannabis and Hemp Extraction Energy: TCUP Labs, Hemp Processors, and ERCOT REP Pricing

Two extraction segments in Texas

TCUP processing is vertically integrated: each licensed dispensing organization cultivates, processes, and dispenses at its registered site [dps-tcup]. HB 46 expanded permitted product forms to include inhalation devices, patches, and suppositories, which may add packaging and formulation equipment at co-located processing wings [tlo-hb46].

Hemp extraction labs may operate independently with a different regulatory profile [tx-tribune-hemp-impasse]. Executive Order GA-56 (September 10, 2025) imposed age and labeling enforcement on hemp THC retail, but did not shut down processing [tx-tribune-hemp-impasse]. Hemp labs in Houston, Dallas, and Austin metro areas represent a larger and less license-constrained energy segment than TCUP.

Equipment load stack

Equipment	Connected kW	Peak behavior
Chiller plant	100 to 200	Batch initiation
Vacuum ovens	50 to 100	Multi-hour ramp
Solvent recovery	40 to 60	Runs with chiller
C1D1 ventilation	40 to 70	Continuous during runs
Lab HVAC	50 to 80	Summer cooling dominant
Packaging and formulation	20 to 40	Post-HB 46 product forms [tlo-hb46]

Assume a mid-size processing wing with 320 kW connected load. Staggered batches hold peak at 160 to 190 kW. Overlapping runs push peak above 220 kW [oncor-tariff].

Texas averages 2,809 cooling degree days statewide [noaa-cag-texas]. Chiller condensing temperatures stay elevated from May through September, reducing batch throughput unless the plant is oversized [noaa-cag-texas]. CenterPoint Houston-area labs face higher latent load from Gulf Coast humidity than Dallas Oncor sites with the same equipment [noaa-cag-texas].

Oncor ratchet impact

Secondary Service Greater Than 10 kW bills billing kW as the greater of current-month 15-minute NCP or 80% of the highest NCP in the prior 11 months [oncor-tariff].

Assume 200 kW peak, 70,000 kWh monthly, REP energy at 8.66 cents/kWh [eia-epm-5-6-a]:

Line item	Monthly cost (estimate)
REP energy (70,000 x $0.0866)	$6,062
Oncor delivery demand + energy (estimate)	~$2,500
4CP transmission (estimate)	~$800
Total estimate	~$9,362

If one batch cycle sets a 250 kW peak in July, the 80% ratchet floor becomes 200 kW for the next 11 months even if subsequent peaks drop to 170 kW [oncor-tariff]. Stagger chiller and oven starts to keep NCP below the prior peak.

REP contract for batch loads

Process loads are spikier than cultivation lighting blocks. A block-and-index contract fixes price on a baseload block (HVAC, standby equipment, C1D1 ventilation) and indexes the variable batch portion [ercot-retail-market]. Avoid a pure real-time index contract if batch scheduling is unpredictable.

Every ERCOT choice-area customer must be with a REP [ercot-retail-market]. There is no utility default supply or price to compare. Use your current all-in cost as the baseline when evaluating new offers.

See fixed vs. index vs. block-and-index contracts and extraction processing facility energy loads.

Scheduling batch loads around ERCOT peaks

Extraction peaks are shorter than cultivation lighting blocks but can still land during ERCOT system-peak intervals that feed 4CP transmission allocation [oncor-tariff]. Practical scheduling rules:

• Start chiller banks sequentially, not in parallel, during June through September afternoons.
• Run vacuum oven preheat during early-morning off-peak hours when the REP contract allows.
• Keep C1D1 ventilation on continuous baseload rather than cycling fans, which reduces spike magnitude but raises kWh.
• Avoid solvent recovery startup during ERCOT peak alerts when possible.

Hemp processors outside TCUP face the same TDU rules as licensed operators [tx-tribune-hemp-impasse]. Regulatory uncertainty does not change the meter.

Metering co-located TCUP processing

Vertically integrated TCUP sites often place processing on the same service entrance as cultivation [dps-tcup]. That merges batch spikes with flat lighting load and makes class placement follow the grow peak, not the lab average. Separate meters for process wings let each building land in an appropriate secondary or primary class if DPS security rules allow the split.

If processing shares a meter with a 650 kW cultivation peak, a 200 kW batch spike does not change billing kW. The grow peak already set the ratchet floor [oncor-tariff]. Separate metering matters most when the processing wing is in a standalone building with lower connected load.

Efficiency and power factor

Large chiller motors and vacuum pump VFDs can drag power factor below unity if uncorrected. Check the REP bill for power factor adjustment clauses. Oncor and CenterPoint Commercial Standard Offer Programs may fund custom M&V measures on HVAC and motor upgrades, though extraction skids rarely qualify under deemed schedules [ercot-retail-market].

Austin, San Antonio, and non-choice labs

Hemp extraction labs in Austin (Austin Energy) or San Antonio (CPS Energy) cannot shop REPs [ercot-retail-market]. Those municipally owned utilities provide bundled generation and delivery. Rate review follows municipal tariff schedules, not PowerToChoose.org. Confirm territory before signing a lease.

Entergy Texas, Southwestern Public Service, El Paso Electric, and SWEPCO serve non-ERCOT areas with bundled IOU rates and no REP choice [ercot-retail-market].

Hemp extraction vs TCUP processing load scale

Governor Abbott vetoed SB 3 on June 22, 2025, and Executive Order GA-56 (September 10, 2025) imposed age and labeling enforcement instead of a hemp THC ban [gov-sb3-veto] [tx-tribune-ga56]. Hemp processors form a larger, less restricted energy customer segment than TCUP with the same ERCOT REP rules [tx-tribune-hemp-impasse] [ercot-retail-market].

Hemp labs may run continuous solvent recovery where TCUP facilities batch to low-THC product limits under HB 46 serving caps [tlo-hb46] [dps-tcup]. Both face Oncor's 80% ratchet and 4CP transmission if on Secondary Service Greater Than 10 kW [oncor-tariff].

C1D1 ventilation and Gulf Coast latent load

Houston-area extraction requires classified ventilation whenever hydrocarbon equipment operates, with make-up air fighting Gulf Coast humidity May through September [noaa-cag-texas]. Continuous exhaust sets baseload kWh; batch chillers set peaks that interact with ERCOT 4CP intervals June through September [oncor-tariff] [noaa-cag-texas].

Schedule batch starts after predicted system-peak windows when fire code allows [oncor-tariff]. Pre-cool process rooms before afternoon peaks so compressors idle during 4CP intervals [oncor-tariff].

Worked monthly cost: 180 kW hemp lab on Oncor secondary

Assume a Dallas hemp hydrocarbon lab at 180 kW billing demand after ratchet and 52,000 kWh monthly (inputs) [oncor-tariff] [eia-epm-5-6-a] [tx-tribune-hemp-impasse].

Line	Estimate	Monthly
REP energy at 8.66 cents/kWh	52,000 kWh	$4,503
TDU delivery energy ~2.5 cents	52,000 kWh	$1,300
Distribution demand ~$4/kW x 180 kW	ratchet floor	$720
4CP transmission ~$5/kW x 180 kW	prior summer peaks	$900
Total		~$7,423

All-in about 14.3 cents/kWh [eia-epm-5-6-a] [oncor-tariff]. Batch scheduling before ERCOT peak alerts can reduce next year's 4CP kW even when this month's ratchet floor stays at 180 kW [oncor-tariff]. Austin or San Antonio hemp labs on municipal service follow different tariffs with no REP choice [ercot-retail-market].

Power factor and motor load on extraction skids

Motor-heavy extraction skids can run poor power factor if VFDs are absent on large chillers and vacuum pumps [oncor-tariff]. Oncor tariffs may bill power factor penalties on secondary and primary service [oncor-tariff]. Audit power factor during commissioning before ratchet-setting test runs [oncor-tariff]. Oncor CSOP M&V tracks may fund VFD retrofits on custom measures [oncor-csop-2026].

Ethanol vs hydrocarbon TDU demand profiles

Ethanol extraction runs longer continuous chiller hours; hydrocarbon runs shorter intense bursts [oncor-tariff] [dps-tcup]. Both interact with the 80% ratchet if peak kW exceeds 10 kW on secondary service [oncor-tariff]. Hemp processors after GA-56 enforcement may run more shifts than TCUP labs capped by low-THC product rules [tx-tribune-ga56] [tlo-hb46]. Schedule heavy batches away from ERCOT peak alerts June through September [oncor-tariff] [ercot-retail-market].

Austin Energy and CPS bundled alternatives

Facilities in Austin or San Antonio use municipal bundled tariffs with no REP choice [ercot-retail-market]. Hemp extraction labs in those cities follow Austin Energy or CPS rate books, not Oncor ratchet and 4CP rules on this page [ercot-retail-market] [tx-tribune-hemp-impasse]. Confirm address territory before applying ERCOT switching guidance [ercot-retail-market].

Solvent recovery and overnight batch windows

Overnight solvent recovery shifts kWh to off-peak REP hours but keeps baseload on secondary service above 10 kW [oncor-tariff] [ercot-retail-market]. Pair overnight scheduling with ERCOT peak monitoring June through September so recovery chillers do not restart during predicted 4CP intervals [oncor-tariff]. TCUP batch sizes stay smaller than hemp tolling runs under HB 46 serving limits [tlo-hb46] [dps-tcup].

Winterization freezers and flat demand

Winterization freezers add flat baseload kW that raises ratchet floors once peak kW crosses 10 kW [oncor-tariff]. Size freezers and chillers so not every compressor starts in the same 15-minute interval during batch changeover [oncor-tariff] [noaa-cag-texas].

Where to go next

• Texas cultivation facility energy.
• Extraction processing facility energy loads.
• How to switch REPs in Texas.
• Texas commercial electricity rates.
• Demand charges explained.

Confirm current Oncor tariff $/kW before quoting delivery costs.