Four Coincident Peak (4CP)
ERCOT's method of billing transmission costs based on a customer's demand during the four highest system peaks of the summer.
In ERCOT, the cost of the transmission network is divided up using a simple, high-stakes rule: measure every large customer's consumption during the single 15-minute interval of ERCOT's highest system demand in each of June, July, August, and September. Average those four readings, and that number — the customer's four coincident peak, or 4CP — sets their share of transmission costs for the following year.
The rule creates one of the most-watched games in Texas power. Because nobody knows in advance which interval will be the monthly peak, large industrial loads, crypto miners, and battery operators watch demand forecasts all summer and curtail consumption — or discharge batteries — during the afternoons most likely to contain the peak. Guessing right on four intervals can cut a facility's transmission bill dramatically.
The behavior 4CP induces is now large enough to shape the grid itself: on likely peak days, thousands of megawatts of load quietly step back for a few hours, flattening the very peaks being measured. Utilities and grid watchers publish 4CP alerts, and 'chasing 4CP' is a routine part of operating any large flexible load in Texas.
For the technical reader
Mechanically, transmission cost of service in ERCOT is allocated to distribution service providers and directly-metered entities pro rata to their average demand over the four monthly system-peak 15-minute settlement intervals (June–September). The following calendar year's transmission charges are then billed against that fixed allocation, so a MW avoided during an actual 4CP interval displaces a year of transmission cost at the tariff rate.
Peak prediction is a forecasting problem: operators combine ERCOT's load forecast, weather, and intra-day actuals to estimate the probability that the current afternoon contains the monthly peak interval, then weigh curtailment cost against expected transmission savings. Batteries add a second dimension — discharging through a predicted peak both earns energy revenue and reduces the measured coincident demand.
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