I. How four afternoons set a year of charges
ERCOT records system-wide demand every 15 minutes all summer. After September closes, it identifies the single highest interval in each of the four months, June, July, August, and September. A transmission-voltage customer's 4CP value is the average of its own demand during those four exact intervals, and that average drives its transmission charge for the next calendar year, under the Public Utility Commission of Texas cost-allocation rule.
Timing is the catch. ERCOT does not announce that an interval is a peak while it is happening. Forecasting teams have to guess, usually on hot, still afternoons in the 4 p.m. to 6 p.m. window when air conditioning load across the state tops out. Guess right and curtail, and you shave next year's bill. Guess wrong and you have idled production for nothing, or missed the real peak anyway. It depends on the weather, and the weather does not cooperate.
II. The honest math on a hot afternoon
Those savings are real but hard to pin to a clean number, because transmission rates reset each year and every facility's load is different. At last public report, ERCOT's all-time summer peak sat on the order of 85,000 megawatts, reached on an August afternoon in 2023. A single large refinery might pull on the order of tens of megawatts. Trimming even part of that across all four peaks can move a transmission bill by a meaningful amount over the following year, which is why the teams exist at all.
The trade is simple to state and hard to make: production against transmission cost. Curtailing a unit, or firing up on-site generation to pull off the grid, carries its own price in lost output and fuel. On a day that turns out not to be a peak, that spend is simply gone. This is why a plant manager near Pasadena or Baytown will tell you the curtail call is part science, part nerve, and nobody bats a thousand.
III. Who is watching the peak with you
ERCOT runs the grid and publishes the demand data that defines the peaks after the fact, so anyone can check which intervals counted once the summer is over. The PUCT writes the rule that says transmission costs get allocated this way and hears the cases when the method is challenged. Your delivery utility, CenterPoint Energy across most of Houston, actually prints the transmission charge on the bill and passes the allocated cost through.
Between those public players sit private ones: load-forecasting desks inside the plants, and consultants who sell 4CP peak-prediction alerts. They watch the same ERCOT dashboards, the same weather models, and the same reserve-margin signals, then make the curtail-or-not call. When you see a cluster of heavy industry along the ship channel ease off on a 105-degree afternoon, this is usually why, not a mechanical problem.
IV. Worth watching this month
1. ERCOT's final 4CP intervals for summer 2026 should be confirmed in its market data once September's numbers settle, so a reader can see which four afternoons actually counted.
2. Watch ERCOT's grid conditions dashboard during any late-season heat, since a hot September day can still set one of the four peaks and reset the math.
3. CenterPoint Energy's transmission and delivery rate filings at the PUCT are worth tracking, because the 4CP charge a large customer pays next year rides on them.
4. The PUCT's open-meeting agendas are where any change to the transmission cost-allocation rule would surface first, though most sessions are routine.
5. Any ERCOT notice of tight reserves or a conservation appeal is a near-real-time hint that a 4CP interval could be forming that afternoon.
Questions readers ask
Does 4CP affect my home electric bill?
No. 4CP applies to large customers that take power at transmission voltage, like refineries and big plants. Residential and small commercial transmission costs are collected a different way.
How do plants know when to curtail if the peaks are not announced?
They do not know for certain. Forecasting teams predict likely peak afternoons from weather and grid data, then curtail on their best guesses. Some they get right, some they miss.
Where can I see which afternoons were the peaks?
ERCOT publishes demand data after the summer, so the four highest 15-minute intervals can be identified from public records. The exact intervals are confirmed once September closes.
Why only June through September?
ERCOT's system demand peaks in summer, when air conditioning load is highest across Texas. The rule samples one peak interval in each of those four months to set the annual allocation.
Sources of record
- ERCOT (grid operator) market information, The grid operator's data pages, where summer demand and the confirmed 4CP intervals are published after each season., www.ercot.com
- Public Utility Commission of Texas, substantive rules, The state agency (.gov) that sets the transmission cost-allocation rule and hears challenges to the 4CP method., www.puc.texas.gov
- ERCOT grid conditions dashboard, The grid operator's near-real-time demand and reserve view, useful for spotting when a peak afternoon may be forming., www.ercot.com/gridmktinfo/dashboards
- CenterPoint Energy rates and tariffs, The Houston-area delivery utility, which prints the allocated transmission charge on large customers' bills., www.centerpointenergy.com
- PUCT open meetings and interchange filings, The agency's (.gov) public agendas, where any change to transmission cost recovery would appear first., www.puc.texas.gov/agency/about/commissioners/open_meetings.aspx