What is 4CP Demand
In ERCOT territory (ERCOT territory covers the entire state of Texas), there is a factor on you bill that is determined by the 4CP kw demand. 4CP stands for 4 Coincidental Peaks, which are the 4 highest peak usage times across the state in June, July, August & September. Whatever your kw demand is during the 4 coincidental peaks is used to determine your 4CP demand. The 4 kw demand reads are averaged into 1 number which is your 4CP kw for the next year.
Who does 4CP Kw apply to?
Throughout the state of Texas, if your utility company is one of the 5 investor owned utilities, you may fall into this category. The 5 investor owned utility companies are: TNMP, Oncor, AEP North, AEP Central, and CenterPoint. If you have one of those utility companies, and you have an IDR meter, you may be billed by the 4CP determinant. You must be using greater than 5 kw or 10 kw monthly demand depending on the utility company.
To be billed 4CP kw, you have to have:
- Have an IDR meter.
- Use 100kw demand or more per month
When is 4CP kw calculated
The 4 Coincidental Peaks occur in June, July, August, and September. Most of the time the peak will occur between 4:00 and 7:00 PM Central time. Nobody knows ahead of time when the coincidental peaks will occur. But we can guess based on the historical 4CP’s. And that guess is going to be Monday through Friday between 4:00 PM and 7:00 PM. It is during those time frames that ERCOT will clock your kw demand and use it for the following year’s bill calculations. So, if you turn everything off, or switch your load to a generator during this time, your 4CP kw will be zero for the next year (the whole 12 months!)
What Part of Your Bill Does 4CP Kw Affect
Your 4CP KW is billed through the Transmission Cost Recovery Factor Charge. Right now the Transmission Cost Recovery Factor Charge is around $4.50 per 4CP KW. So let’s do some math!!
Say your 4 CP kw demands reads are 700, 750, 800, and 750. That averages out to 750. So your 4CP kw is 750 for the entire year. That is going to cost you 750 multiplied by $4.50, which is $3,375 per month! Or $40,500 per year! That is a lot of money. Now, if you plan ahead and cut everything off in the evenings during June, July, August, and September, it is possible to get your 4CP KW down to zero. Or if it’s not feasible to completely cut everything off, you can at least reduce your kw demand significantly by being mindful and attempting to reduce usage during these key time frames.
Now if you have figured out that you are being billed 4CP kw, its time to start setting goals and tracking your progress. Do you want to reduce you energy consumption by 20% next year to save on the 4CP KW? Put the plan in action. Start planning in January and notify your staff, facility workers, and tenants that all unused energy needs to start being cut off between 4:00 and 7:00 PM from June 1st through August 31st. Schedule workers hours to leave early if you can.
How Much Can You Save
You can literally get your Transmission Cost Recovery Factor charge to ZERO, by doing this trick. In the example above, a facility using 750 KW during the 4 Coincidental Peaks would save $40,500 the next year if they are able to cut everything off during the 4CP time frames.
How Can I Learn More?
The historical 4CP published by ERCOT are available on the ERCOT website. You can see that most of them occur around 5:00 PM on week days in June, July, August and September.
Check your bill to see if you are charged 4CP kw demand. Make sure your bill shows a breakdown of the TDSP charges. Sometimes Retail Electric Providers do not show a breakdown of the TDSP charges so you will have to request them from your REP. You need to look for the charged called “TRANSMISSION COST RECOVERY FACTOR”.
How Can I Find Out When the 4CP Times Will Be?
You can contact your Retail Electric Provider, a utility broker or consultant to get updates and notifications regarding the upcoming peaks. Reliant Energy has a free 4cp notification service you can sign up for. There are 3 levels of notifications based on your needs. Check it out!
Now that you know what benchmarking is and how it can help you save money, what are you waiting for! You can be saving money while saving the planet. Start benchmarking your usage and let us know your progress! Do you like this utility hack? Check out our other electric utility hacks to help you save money on your bills.