ERCOT 4CP Season 2026 — What AI Data Centers Need to Do Right Now

For AI data centers, GPU compute operators, and Bitcoin miners in ERCOT Texas, June 1 marks the start of the most financially consequential 90-day window of the year. Four fifteen-minute intervals between June and September will determine your transmission charges for all of 2027. If you are not prepared before the season starts, you cannot undo the damage after it ends.

This article covers exactly what changes on June 1, what the financial stakes look like in 2026 specifically, and the concrete steps every Texas data center operator should take before the first peak event occurs.

What Changes on June 1

ERCOT's 4CP measurement window opens June 1 and closes September 30. During these four months, ERCOT monitors total grid demand continuously. At the end of the season, it identifies the single highest-demand hour in each of the four months — June, July, August, and September. Your facility's electricity consumption during those four hours becomes your 4CP demand figure, which determines your Transmission Cost of Service (TCOS) charges for the following twelve months.

Before June 1, there are no 4CP consequences. A price spike in April or May does not affect your transmission charges. The moment June begins, every weekday afternoon between 3 PM and 7 PM Central Time becomes a potential 4CP event — and running at full load during the wrong fifteen minutes can cost you millions.

The Financial Stakes in 2026

The 2026 4CP season carries higher financial stakes than any previous year. Three converging factors are driving unprecedented risk for Texas data center operators.

Record AI data center load growth. ERCOT has received over 220 gigawatts of large load interconnection requests as of early 2026, with more than 70% from data centers. Total connected data center load in ERCOT is growing faster than at any point in the grid's history. More load on the grid means higher peak demand — which means higher LMP prices during peak events and higher 4CP exposure for every facility connected to the grid.

Summer heat forecasts. NOAA's 2026 summer outlook projects above-normal temperatures across Texas through August. Extreme heat is the primary driver of ERCOT demand records. The summers of 2023 and 2024 both produced multiple high-price events — 2026 is forecast to be similarly severe.

Rising TCOS rates. Transmission Cost of Service rates have been increasing as ERCOT's grid infrastructure expands to accommodate new load. Operators who locked in contracts before 2025 may face rate adjustments that increase their per-kW annual charge.

These charges are backward-looking — you will pay in 2027 for what happens during summer 2026. There is no retroactive fix. The only window to act is before and during the season.

The Pre-Season Preparation Checklist

Every Texas data center operator should complete the following steps before June 1. Each item addresses a specific failure mode that causes operators to get caught during peak events.

1. Audit your current load profile. Pull your interval meter data for the past 12 months and identify your peak demand hours. Understand what percentage of your load is firm (must run continuously) versus shiftable (can be deferred or curtailed). This ratio determines your maximum possible 4CP charge reduction.

2. Classify every workload. Create a written inventory of workloads by curtailment priority. GPU training jobs that can pause and resume are shiftable. Real-time inference serving critical applications may not be. Cooling systems, power distribution, and security infrastructure are firm. Knowing this in advance means decisions happen in seconds, not minutes, during a peak event.

3. Set up real-time LMP monitoring. You need ERCOT hub LMP prices updated every five minutes, available to your operations team and automated systems at all times. Manual monitoring of ERCOT's website is insufficient — human reaction time during a price spike is too slow to prevent a 4CP hit.

4. Define your curtailment thresholds. Decide in advance at what LMP price level you will begin curtailing each workload tier. Document these thresholds and make sure your operations team knows them before June 1. A common framework: defer non-essential loads above $50/MWh, defer all shiftable loads above $100/MWh, maximum curtailment above $200/MWh.

5. Test your curtailment response. Run a full curtailment drill before June 1. Simulate a peak event and time how long it takes to shed your target load. If it takes more than two minutes, you have a process problem that needs to be fixed before the season starts.

6. Brief your operations team. Everyone who might be on shift during a peak event needs to understand 4CP, know the curtailment thresholds, and be able to execute the response without waiting for approval. Peak events happen on hot Tuesday afternoons — your most experienced engineer may not be on shift.

How to Predict When Peak Events Will Occur

4CP events are not announced in advance, but they follow strong historical patterns that make prediction possible. Experienced operators monitor a combination of indicators starting 24–48 hours before a likely event.

The combination of high temperature forecast, low wind generation, and a weekday with no major holidays creates the highest-probability 4CP event conditions. When three or more of these indicators align, experienced operators begin pre-curtailment — reducing load before prices spike rather than reacting after.

Automated Response vs Manual Monitoring

The difference between automated and manual 4CP response is not a matter of preference — it is a matter of financial outcome. ERCOT's SCED runs every five minutes. A price spike from $30/MWh to $500/MWh can occur in a single five-minute interval. The operators who respond within 60 seconds capture the full financial benefit. Those who respond in ten minutes often miss the event entirely.

Consider what manual monitoring actually requires during a 4CP event:

• An operator is watching ERCOT's website or a price feed at the moment the spike begins
• That operator recognizes the spike as a potential 4CP event (not just a temporary fluctuation)
• The operator reaches the right person with authority to curtail
• The curtailment decision is made and communicated to the floor
• The floor executes the curtailment across multiple systems

In practice this chain takes five to fifteen minutes — often longer if the event occurs at 4:30 PM on a Friday. An automated system that monitors real-time LMP prices and executes curtailment based on predefined thresholds completes the same sequence in under 60 seconds, every time, without human intervention.

The Dual Benefit: 4CP Reduction and ADER Revenue

There is a significant financial opportunity that most operators overlook when thinking about 4CP management: ERCOT's Alternative Demand Response (ADER) program.

ERCOT compensates facilities that can demonstrate verified load reductions during grid stress events. The same infrastructure that reduces your 4CP charges — real-time LMP monitoring, automated curtailment, documented load reduction capability — also qualifies your facility for ADER revenue payments.

This creates a dual financial benefit from a single investment:

Three Costly Mistakes Texas Data Centers Make Every Summer

Mistake 1 — Curtailing too conservatively on non-peak days. Operators who manually monitor ERCOT often curtail on days that turn out not to be 4CP events — costing them uptime and revenue without any corresponding transmission charge benefit. Automated systems using data-driven prediction significantly reduce unnecessary curtailment.

Mistake 2 — Missing the actual peak event. The opposite problem — operators who have a process but execute it too slowly or not at all on the day that turns out to be the actual 4CP peak. This is particularly common when peak events occur on unexpected days or outside normal business hours.

Mistake 3 — Not accounting for 4CP in the financial model. New data center operators entering the Texas market often build financial models that exclude 4CP transmission charges entirely, treating them as a line item to figure out later. A 100 MW facility discovering a $6 million annual 4CP charge after signing a lease has no good options. This cost must be modeled from day one.

Key Takeaways

• The 4CP measurement window opens June 1 — preparation must be complete before that date
• 2026 carries higher stakes than previous years due to record AI data center load growth and above-normal temperature forecasts
• A 100 MW facility can reduce annual 4CP charges by $3+ million with effective curtailment during the four peak events
• Automated response systems execute curtailment in under 60 seconds — manual processes take 5–30 minutes
• The same infrastructure that reduces 4CP charges also qualifies facilities for ADER revenue payments
• Three most common mistakes: unnecessary curtailment, missing the actual peak, and not modeling 4CP from the start
• Every Texas data center should complete the six-item pre-season checklist before June 1

The 4CP season is the single highest-leverage financial event of the year for Texas data center operators. The operators who are prepared before June 1 — with real-time monitoring, defined curtailment thresholds, and automated response — will have a structural cost advantage over those who are not.