Texas TCUP and Hemp Multi-Site Energy: ERCOT Portfolio Procurement, 4CP, and TDU Ratchets

TCUP portfolio vs. hemp portfolio

As of April 1, 2026, three TCUP dispensing organizations are fully licensed and twelve hold conditional licenses announced in Phase I (December 1, 2025) and Phase II (April 1, 2026) [dps-tcup-phase-1] [dps-tcup-phase-2]. Conditional licenses do not permit cultivation or sales until final DPS approval [dps-tcup-phase-2]. National operators like Verano Texas, Trulieve TX, GTI Texas dba RISE, and Cresco Labs Texas appear on the conditional list [dps-tcup-phase-1] [dps-tcup-phase-2].

Hemp MSOs may run dozens of extraction labs and retail locations without TCUP licensing caps [tx-tribune-hemp-impasse]. Energy procurement for a hemp portfolio looks more like a conventional multi-site industrial operation than a 15-license medical program.

Portfolio site map

Site type	Typical TDU	Peak range	REP contract type
TCUP cultivation campus	Oncor or CenterPoint	400 to 800 kW	Block-and-index
TCUP processing (co-located)	Same meter or separate	included above	Same
TCUP satellite dispensary	Oncor/CenterPoint/AEP	12 to 25 kW	Fixed 12-month
Hemp extraction lab	CenterPoint (Houston)	150 to 300 kW	Block-and-index
Hemp retail	Various	10 to 20 kW	Fixed

HB 46 allows satellite storefronts for TCUP dispensing organizations [tlo-hb46]. Each new ESI ID needs its own REP enrollment [ercot-retail-market].

4CP coordination across sites

ERCOT allocates transmission based on average demand at four system-peak 15-minute intervals in June through September [oncor-tariff]. Portfolio tactics:

1. Monitor ERCOT peak alerts centrally. Curtail or shift load at the highest-kW site first.
2. Stagger lighting schedules across cultivation campuses so peaks do not coincide.
3. Track 4CP kW by account on the January TDU bill reset.
4. Do not assume co-located meters share 4CP. Each ESI ID has its own 4CP history [oncor-tariff].

A portfolio with a 650 kW Oncor grow and a 200 kW CenterPoint extraction lab faces independent 4CP assignments on each TDU [oncor-tariff] [ercot-retail-market]. Centralize peak monitoring but execute curtailment site by site.

Ratchet management

Oncor Secondary Service Greater Than 10 kW bills the greater of current NCP or 80% of the highest prior 11-month NCP [oncor-tariff]. A portfolio where one site sets a record peak in August carries that ratchet floor on every account above 10 kW on the same TDU tariff.

CenterPoint uses a similar 80% ratchet structure [ercot-retail-market]. Satellite dispensaries just above 10 kW are especially vulnerable: one hot August afternoon can lock in demand billing for 12 months [oncor-tariff].

REP procurement calendar

Every account needs an active REP contract [ercot-retail-market]. Steps:

1. Centralize ESI IDs, TDU territories, and contract end dates.
2. Fix small retail accounts first with 12-month fixed contracts.
3. Negotiate block-and-index for cultivation campuses with predictable lighting baseload.
4. Stagger expiration dates so no more than one-third of portfolio kWh rolls in any quarter.
5. Confirm TDU pass-through charges are identical regardless of REP.

Texas commercial power averaged 8.66 cents per kWh in June 2026 [eia-epm-5-6-a]. Industrial customers averaged 6.58 cents [eia-epm-5-6-a]. Cultivation campuses with flat lighting may negotiate supply closer to the industrial line even when TDU class keeps them on secondary service.

Non-choice sites in a mixed portfolio

Austin Energy and CPS Energy are non-opt-in municipally owned utilities with bundled service [ercot-retail-market]. If the portfolio includes a TCUP satellite in San Antonio or a hemp retail location in Austin, that account cannot shop REPs. Procurement strategy splits: competitive bids for ERCOT accounts, rate tariff review for municipal accounts.

Entergy Texas, Southwestern Public Service, El Paso Electric, and SWEPCO serve non-ERCOT areas with bundled IOU rates [ercot-retail-market]. A hemp MSO with labs in Houston (CenterPoint, REP choice) and El Paso (El Paso Electric, no choice) needs two playbooks.

Data standardization across TDUs

Oncor, CenterPoint, AEP Texas, and TNMP publish interval data on different portals with different column formats [ercot-retail-market]. Standardize to a single schema before portfolio bidding:

• ESI ID and TDU name
• Monthly kWh and billing kW
• 4CP kW as of last January reset
• REP contract end date and product type
• Facility type (cultivation, processing, dispensary, hemp lab)

Send interval CSV exports from each TDU when requesting portfolio quotes from REPs. See interval data and AMI meters.

HB 46 buildout timeline

Conditional licensees have 24 months to become operational after final DPS approval [dps-tcup-phase-2]. Energizing new campuses will scatter contract start dates across 2026 and 2027. Pre-negotiate REP terms during construction so commissioning tests in July do not run on unintended real-time index pricing [oncor-tariff].

Phase I conditional licensees (nine organizations announced December 1, 2025) and Phase II licensees (three announced April 1, 2026) may energize sites in Oncor, CenterPoint, and AEP territories at different times [dps-tcup-phase-1] [dps-tcup-phase-2]. Build a master procurement calendar keyed to each site's expected energization date.

Vertically integrated TCUP vs multi-state hemp MSO

HB 46 capped TCUP at 15 vertically integrated dispensing organization licenses [dps-tcup-phase-2]. Three are fully licensed and twelve hold conditional licenses as of April 1, 2026 [dps-tcup-phase-2]. A TCUP portfolio is at most fifteen campuses statewide, each with cultivation, processing, and retail on linked licenses [dps-tcup].

Hemp-derived THC processors after the SB 3 veto and GA-56 enforcement order may operate many more sites under separate business licenses [tx-tribune-hemp-impasse] [gov-sb3-veto]. An MSO spanning hemp retail, hemp extraction, and TCUP assets needs separate procurement tracks: REP contracts in ERCOT choice areas, bundled municipal tariffs in Austin or San Antonio, and 4CP coordination every summer on Oncor and CenterPoint accounts [ercot-retail-market] [oncor-tariff].

Aggregating REP bids without losing 4CP visibility

ERCOT REPs price portfolio loads individually; there is no state aggregation program like Ohio CRES portfolio products [ercot-retail-market]. Still request block-and-index quotes that name each ESI ID and TDU [ercot-retail-market]. Centralize interval data and 4CP kW history so curtailment during June through September peaks benefits every site in the portfolio [oncor-tariff].

Data field	Why it matters
ESI ID	REP enrollment key [ercot-retail-market]
TDU name	Ratchet and 4CP rules differ [oncor-tariff]
Billing kW vs 4CP kW	Delivery vs transmission peaks [oncor-tariff]
Ratchet floor	80% of highest prior 11-month NCP [oncor-tariff]

Oncor Commercial Standard Offer Program may fund LED and custom measures at multiple sites through approved service providers [oncor-csop-2026]. Engage EEPM during HB 46 buildouts rather than after energization [oncor-csop-2026] [tlo-hb46].

Conditional licensee buildout map (HB 46)

DPS Phase I announced nine conditional licensees December 1, 2025; Phase II added three April 1, 2026 [dps-tcup-phase-1] [dps-tcup-phase-2]. Each has 24 months after final approval to become operational [dps-tcup-phase-2]. Portfolio energy planning should map expected energization quarters against REP contract terms and Oncor ratchet floors [oncor-tariff] [tlo-hb46].

Phase	Count	Procurement note
Fully licensed	3	Existing REP and TDU relationships [dps-tcup-phase-2]
Conditional Phase I + II	12	No sales until final DPS approval [dps-tcup-phase-2]
Eligibility list	12 more	Future load, not yet licensed [dps-tcup-phase-2]

Hemp MSO sites may outnumber TCUP campuses tenfold after the SB 3 veto [gov-sb3-veto] [tx-tribune-hemp-impasse]. Separate legal entities on the same REP portfolio still need distinct ESI IDs and TDU pass-through treatment [ercot-retail-market].

Oncor vs CenterPoint 4CP coordination

ERCOT sets one system peak per month June through September, but each TDU assigns 4CP kW to its customers from that system interval [oncor-tariff] [ercot-retail-market]. A portfolio with Oncor cultivation and CenterPoint processing should monitor the same ERCOT peak alerts but verify 4CP kW separately on each January TDU reset [oncor-tariff]. Curtailment at the Oncor site does not change CenterPoint 4CP assignment on the other ESI ID [ercot-retail-market].

Portfolio REP bid packet contents

Send each REP candidate [ercot-retail-market] [oncor-tariff]:

1. ESI ID list with TDU name and service address.
2. Twelve months kWh and peak kW per account.
3. January 4CP kW assignment per TDU bill.
4. Current ratchet billing kW and month it was set.
5. Desired contract type: fixed, index, or block-and-index.

HB 46 conditional campuses not yet energized should be modeled separately from operating TCUP sites [dps-tcup-phase-2] [tlo-hb46]. Hemp retail expansion after GA-56 may add ESI IDs faster than TCUP license count [tx-tribune-ga56] [gov-sb3-veto].

Ratchet floor tracking spreadsheet

Maintain a rolling twelve-month NCP log per ESI ID with the month that set the current 80% ratchet floor [oncor-tariff]. Portfolio curtailment during ERCOT peaks helps next year's 4CP kW even when this month's ratchet billing kW cannot drop until the setting peak ages out [oncor-tariff] [ercot-retail-market]. Conditional HB 46 sites should not energize all HVAC for empty-building tests the same week [dps-tcup-phase-2] [oncor-tariff].

Where to go next

• Texas hub for TCUP and ERCOT overview.
• Commercial electricity rates.
• How to switch REPs.
• Multi-state operator procurement strategy.

Confirm 4CP kW and ratchet billing demand on each TDU bill before renewing REP contracts.