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Get a Free QuoteFour Coincident Peak (4CP) transmission charges represent 30-50% of a Texas commercial electric bill. Solar + battery systems reduce your 4CP exposure by 50-100%, saving $10,000-$50,000+ annually for mid-to-large commercial customers. This guide covers how 4CP is calculated, your savings potential by business size, battery dispatch optimization, and peak prediction strategies.
SUMMER 2026: 4CP Season Starts June 1
Your demand during the four highest ERCOT system peaks this summer (June-September) will set your transmission cost allocation for all of 2027. Install solar + battery before June to protect against this summer's 4CP events.
ERCOT 4CP (Four Coincident Peak) charges represent 30-50% of a Texas commercial electric bill. These charges are set by your facility's demand during the four highest system-wide peak intervals each summer (June-September, typically 3-5 PM on the hottest days). Solar + battery can reduce your 4CP exposure by 50-100%, saving $10,000-$50,000+ annually for mid-to-large commercial customers. Solar alone reduces 4CP by 30-60% (strong afternoon production), while adding battery storage extends coverage to 80-100% by discharging during late afternoon when solar fades. Transmission rates vary by TDU: Oncor $4.50-$6.00/kW/month, CenterPoint $3.50-$5.50/kW/month, AEP Texas $3.00-$5.00/kW/month. A 250 kW solar + 150 kW/600 kWh battery system targeting a 300 kW facility achieves 85% 4CP reduction and 4.3-year payback after the 30% federal ITC.
Every Texas commercial electricity customer in the deregulated ERCOT market pays transmission charges that are allocated using the Four Coincident Peak (4CP) methodology. Understanding this mechanism is the single most important step in reducing your commercial electric bill, because 4CP charges are both large and highly controllable.
Each summer, ERCOT records the single highest 15-minute interval of system-wide electricity demand in each of the four summer months: June, July, August, and September. These four intervals are the "Four Coincident Peaks." They almost always occur between 3:00 PM and 5:00 PM on the hottest weekday of each month, when air conditioning load across the state drives system demand above 75-80 GW. The exact intervals are not known in advance — they are determined after each month ends and confirmed by ERCOT after September.
Your facility's electric meter records demand in 15-minute intervals. After ERCOT identifies each monthly peak, your TDU (Oncor, CenterPoint, AEP Texas, or TNMP) pulls your specific demand reading during that exact 15-minute window. Your 4CP demand is the average of your readings across all four intervals. If your facility drew 300 kW during the June peak, 280 kW during July, 310 kW during August, and 290 kW during September, your 4CP demand is 295 kW.
ERCOT's total transmission revenue requirement (the cost of maintaining and building the state's transmission grid) is divided among all customers in proportion to their 4CP demand. The formula is straightforward:
In practice, this translates to $3-$8 per kW per month allocated to your account based on your 4CP demand. For a facility with 300 kW of 4CP demand at $5/kW/month, that's $18,000 per year in transmission charges — applied every month for the entire following calendar year, regardless of your actual demand in those months.
Because 4CP demand is averaged across only four intervals, a single unmanaged peak has outsized impact. If you reduce your demand to 100 kW during three of the four peaks but miss the fourth and register 400 kW, your average jumps to 175 kW instead of 100 kW. That extra 75 kW costs $4,500-$7,200 per year at typical transmission rates. For larger facilities, a single missed peak can cost $10,000-$50,000+ in extra annual charges. This is why automated dispatch systems and prediction services are critical — you cannot afford to miss even one event.
Your 4CP savings potential scales directly with your peak demand. Every kilowatt you reduce during the four coincident peak intervals saves $36-$96 per year in transmission charges (at $3-$8/kW/month). Here is what businesses at each size tier can expect from a solar + battery 4CP management strategy:
Restaurants, small offices, retail shops
Warehouses, grocery chains, medium offices
Data centers, hospitals, large retail
Manufacturing, semiconductor fabs, refineries
Solar alone provides meaningful 4CP reduction because peak intervals coincide with strong afternoon sun. But the gap between solar-only and solar + battery is where the most valuable savings live. Here is why a combined system is the gold standard for 4CP management:
The key to maximizing 4CP savings is intelligent battery dispatch — charging the battery from solar during midday production surplus and discharging during the 2-6 PM peak risk window. Here is the optimal daily dispatch schedule during 4CP season (June-September):
Solar begins producing. Battery charges from early solar surplus. Building load is moderate (HVAC ramp-up). Battery reaches 80-100% by noon.
Solar output peaks. Most solar production offsets building load directly. Battery at full charge, held in reserve for afternoon peak window.
4CP peak risk window. Battery discharges at full power. Solar output declining but still contributing. Combined solar + battery minimizes grid draw during the 15-minute peak interval.
4CP risk passes. Battery recharges from grid at off-peak rates if needed. System prepares for next day's potential peak event.
The entire 4CP strategy depends on knowing when the peak intervals will occur. Miss a single event and your annual savings drop by 25%. Professional prediction services and ERCOT monitoring tools give you the intelligence needed to dispatch your battery at the right moment. Here are the leading options for Texas commercial facilities:
4CP Alert & Curtailment
Real-time ERCOT monitoring, automated alerts, demand response dispatch, historical 4CP analysis, multi-site portfolio management.
Peak Demand Management
ERCOT load forecast integration, weather-adjusted demand modeling, battery dispatch signals, TDU-specific rate impact analysis.
Distributed Energy Platform
Cloud-based demand analytics, automated battery/HVAC dispatch, real-time grid frequency monitoring, revenue-sharing model available.
ERCOT Dashboard + Weather Data
ERCOT real-time dashboard (ercot.com), NOAA weather forecasts, manual alert system. Requires dedicated staff monitoring June-September.
The most effective 4CP management systems eliminate human decision-making from the dispatch process. Modern battery energy management systems (BEMS) integrate directly with 4CP prediction feeds and automatically switch from normal operation to peak-defense mode when triggered. Here is how automated dispatch works:
24-48 hours before: Prediction service flags high-probability 4CP day based on ERCOT load forecast + weather models. BEMS receives signal and begins pre-conditioning: battery charged to 100%, non-critical loads pre-cooled, solar production reserved for battery charging.
Day of event (morning): BEMS confirms battery at full state of charge. Solar production monitored. Real-time ERCOT load data tracked against threshold (typically 75+ GW). BEMS locks battery in "hold" mode — no discharge for demand management until peak window opens.
2 PM - 6 PM (peak window): BEMS dispatches battery at maximum power. Solar + battery combined output reduces net grid demand to minimum. BEMS monitors real-time interval demand and adjusts dispatch to maintain target. If ERCOT load drops below threshold, BEMS may partially stand down to preserve battery for later intervals.
Post-event: BEMS returns to normal economic dispatch mode (demand charge peak shaving, TOU arbitrage). Battery recharges overnight or from next-day solar production. System remains on standby for subsequent 4CP events within the same month.
Your 4CP savings depend heavily on which Transmission and Distribution Utility (TDU) serves your facility. Each TDU has different per-kW transmission rates and different methods for allocating 4CP costs to customers. Here are the 2026 rates for the four major Texas TDUs:
DFW, Waco, Midland-Odessa, Tyler
Monthly 4CP share multiplied by ERCOT-approved transmission rate schedule. Oncor files annual rate cases with PUCT — 2026 rates reflect increased renewable integration costs.
Largest TDU in Texas. Highest absolute 4CP charges due to higher per-kW rates.
Houston, The Woodlands, Galveston, Beaumont
CenterPoint uses a demand ratchet — your highest 4CP reading in the past 12 months sets the billing demand floor. A single bad peak interval locks in costs for a full year.
Demand ratchet makes 4CP management especially critical.
Corpus Christi, McAllen, Laredo, Victoria
AEP Texas allocates 4CP costs monthly with seasonal adjustment factors. Summer months carry 15-20% higher per-kW rates than winter months.
Lower rates but South TX heat extends the peak risk window.
Parts of DFW suburbs, Temple, Lewisville
Smaller service territory. TNMP transmission rates have increased 8-12% annually since 2022, reflecting ERCOT system-wide transmission investment growth.
Fastest-rising transmission rates among TX TDUs.
This scenario models a real-world 4CP management strategy for a distribution warehouse in the Dallas-Fort Worth metroplex served by Oncor. The numbers reflect 2026 pricing, current TDU rates, and the 30% federal ITC.
With MACRS 5-year depreciation (20% bonus in 2026) at a 21% corporate tax rate, the effective payback drops to approximately 3.5-3.8 years. The system produces savings for 25+ years — generating over $1,525,000 in cumulative savings over its lifetime against a net investment of $262,500.
ERCOT 4CP (Four Coincident Peak) charges allocate the entire ERCOT transmission revenue requirement across all commercial and industrial customers based on their demand during the four highest system-wide peak intervals each summer (June through September). Your facility's average demand during these four 15-minute windows determines your share of transmission costs for the following calendar year. For a mid-size commercial facility (500 kW peak demand), 4CP charges typically range from $30,000 to $60,000 per year — often representing 30-50% of the total electric bill. A single unmanaged peak interval can add $10,000+ to your annual costs.
Our team will analyze your 12-month interval data, model your 4CP exposure by TDU territory, and design an optimal solar + battery system to slash your transmission costs starting summer 2026.