Texas Business Electricity Procurement: Demand Charges, Load Factor & Custom Bidding

1. How Load Factor Determines Your Commercial Supply Rate

Your building’s Load Factor is calculated as Monthly kWh ÷ (Peak kW × Billing Days × 24). Two businesses that both consume 30,000 kWh/month can receive vastly different electricity bills depending on their peak kW draw:

• High Load Factor (55%–80%+): A 24-hour grocery store, cold-storage warehouse, or continuous manufacturing plant draws steady power day and night, spreading TDU demand charges thin and earning lower wholesale supply quotes.
• Low Load Factor (<35%): A church, school, restaurant, or day-shift warehouse spikes its HVAC and equipment for a few hours, triggering a high 15-minute kW demand ratchet relative to total kWh.

Calculate your facility’s exact load factor in seconds using our Commercial Load Factor Calculator.

2. NCP vs 4CP Demand Charges and Sales Tax Exemptions

In Oncor, CenterPoint, AEP, and TNMP commercial tariffs, delivery demand charges are billed based on your Non-Coincident Peak (NCP) (your meter’s highest 15-minute kW draw during the billing cycle, often subject to an annual 80% ratchet) and, for large interval-data accounts, ERCOT 4CP (Four Coincident Peak) during June, July, August, and September system peaks. Additionally, qualifying Texas manufacturers and agricultural processors can submit form 01-339 with a Predominant Use Study to claim a state sales tax exemption on commercial electricity.