Transmission Costs

What are transmission costs?

PEC does not set transmission costs or make money off of them. Transmission access charges are set by the Public Utility Commission of Texas (PUCT), a cost that is passed through directly to members without additional charges. Electric transmission costs have nearly doubled in the past seven years and impact every PEC member. But together we can reduce these costs.

What are the Four Coincident Peaks (4CP)?

Traditionally, the hottest months in the Texas Hill Country are from June to September. During this four-month period, your transmission costs for next year are calculated based on how much energy is being used by PEC members at peak times. Each year, transmission costs are based on a value called Four Coincident Peaks, or 4CP. It measures PEC’s total energy demand at the time of highest demand on the statewide grid for each of the four summer months. Peaks tend to occur on the hottest days of the month (one each in June, July, August, and September), usually between the hours of 4 and 6 p.m.

What can you do?

The lower PEC’s demand is during the four peaks, the lower our transmission costs will be the following year. The four peak events occur once each month in June, July, August, and September. They’re triggered when system demand is highest: usually on the hottest days of the month during the post-work/dinner hours when many of us are arriving home, turning on the air conditioning, starting dinner, and running large appliances like dishwashers.

We can’t avoid peaks, but we can reduce the amount of energy we use during peak times. By working together to conserve, you and your fellow members can help reduce transmission costs for the following year. Plus, reducing your energy use always saves you money on your next bill.

What are Transmission Cost of Service pass-through charges?

The Transmission Cost of Service (TCOS) pass-through charge on your electric bill is used to recover the cost PEC pays to access the statewide transmission system. PEC passes on the cost to use transmission infrastructure as a direct passthrough, meaning there are no additional costs added. For details, please see PEC’s Tariff and Business Rules.

What determines transmission access costs?

Transmission access charges are governed by the Public Utility Commission of Texas (PUCT) and are adjusted monthly. To calculate PEC’s monthly transmission access charges, the PUCT’s approved rate is multiplied by the cooperative’s systemwide demand during four summertime ERCOT 15-minute coincident peak events, or 4 Coincident Peaks (4CP), of the preceding year. That cost is passed directly through to members and shows up on member bills as the TCOS rate.

PEC doesn’t control the PUCT’s TCOS rate, but our members can have an impact on PEC’s 4CP.

PEC’s 4CP is determined by averaging our members’ combined summer energy consumption during the ERCOT coincident peak for each of the four summer months — June, July, August, and September. The higher PEC’s energy demand is during these 4CP events, the more the cooperative will be charged in transmission charges the following year. Conversely, by lowering our energy use during a 4CP event, we can enjoy lower transmission costs on our bills the following year because we use fewer grid resources.

How much could I save?

Take a look at your monthly bill. For most residential members, the transmission costs make up about 12-20% of the total due. If you and your fellow PEC members all reduce electric use together, you can reduce that cost on your bills.