Texas Proposes Ending 4CP and Billing Data Centers on Reserved Capacity; Illinois Signs Refund and Service Window Laws

The bottom line today

“There will be no probable economic cost to persons required to comply with the rule.” That is the Public Utility Commission of Texas, in Friday’s Texas Register, describing a proposal that would change who pays for the transmission grid across ERCOT [1]. The rule would retire the four-summer-peak method that large industrial customers have long managed their bills around, and put data centers on a 20-year minimum bill [1, 4]. The second half of that is overdue, and the first half deserves a harder look than the agency’s cost statement gives it. In Illinois, Gov. JB Pritzker signed two consumer bills on the same day, and one of them is a model for how to write a retail mandate [6, 8].

TX Texas PUC Project 58000: 4CP gives way to 12CP, and large loads pay on reserved capacity

What it does. The commission proposes to amend 16 TAC §25.192 and §25.193 and add a new §25.252 to implement Section 6 of SB 6, the 2025 large-load law [1]. Section 6 told the commission to evaluate whether the four coincident peak method “ensures that all loads appropriately contribute” to transmission costs, and to amend its rules by December 31, 2026 [2].

The proposal has four main parts [1]:

• 12CP replaces 4CP. Each transmission provider’s rate would be its approved cost of service divided by ERCOT’s 12CP load, the average of the system’s monthly peak interval in each of 12 months running October through September, measured in 30-minute intervals. Distribution providers would pay on their share of those 12 peaks rather than the June-through-September four.
• A minimum bill for large loads. A retail provider serving a large load customer would be billed on the greater of the customer’s contracted peak demand, its highest non-coincident peak in the past year, or its 12CP demand. Billing would begin when service is available, “irrespective of whether the large load customer has energized,” and run for no less than 20 years.
• Cash for interconnection. Large loads would pay contribution in aid of construction for interconnection facilities as a direct cash payment, with no allowance. Interconnection costs under agreements signed after the rule takes effect could not go into a utility’s transmission rates, and interconnection fees and forfeited security would offset the revenue requirement.
• Annual updates. Distribution utilities would update class allocation factors every year, and investor-owned ones would report revenue by customer class each December 1.

A large load customer is one subject to the commission’s large load interconnection standards [1]. SB 6 sets the threshold for those standards at 75 megawatts unless the commission picks a lower figure [2].

Where it stands. The proposal was filed July 9 and published July 24 [1]. Comments and hearing requests are due August 11, and the earliest adoption date is August 23 [1]. The commission is still asking whether the minimum bill should be fixed for 20 years, phased down, or based on a ratchet or weighted average, and whether computational loads such as data centers and crypto mines should get separate rate treatment [1].

The politics are not subtle. On June 10, Gov. Greg Abbott directed the commission to require data centers to “fully fund” the electric infrastructure built to serve them and to begin action to reduce residential transmission costs by July 31 [3].

Pratt’s read. Start with the credit. The minimum-bill and cash-interconnection pieces put the cost of a large campus on the company that ordered it. Commission staff’s March draft report found that even a large load able to drop to zero at peak “is likely to require substantial transmission system upgrade investment,” according to a K&L Gates summary, and that a patchwork of utility practices had left ratepayers across ERCOT carrying interconnection costs they should not [4]. Florida reached the same principle by statute this spring, as this release noted on July 8. A grocery chain or a machine shop should not be underwriting someone else’s substation.

The 12CP switch is a different matter, and the agency’s “no probable economic cost” line does not survive contact with it. Under 4CP, an industrial customer that cuts load during four summer intervals cuts its transmission bill for the year. Staff’s draft report described what is commonly called “4CP avoidance”: sophisticated industrial customers trimming their transmission obligations without a matching cut in the system costs they cause [4]. That is the supporters’ case, and it is not frivolous. But the customers who built their operations around curtailment did exactly what the old rule paid them to do. Twelve monthly peaks are much harder to dodge than four, and the K&L Gates summary says moving off 4CP will make avoidance more difficult for large commercial customers, large loads included [4]. Somebody’s transmission bill goes up. The proposal does not say whose, or by how much.

The Texas Advanced Energy Business Alliance made the reliability argument during the evaluation: removing 4CP “removes an incentive for large loads to be flexible,” and the reductions it prompts relieve the grid at peak [5]. The same filing saw a possible upside in a 6CP, 8CP or 12CP model: more responsive demand from flexible loads [5]. The commission should test that with numbers before adoption. Manufacturers should file by August 11 with their own.

IL Illinois HB 4044: no more store-credit-only refunds on unopened goods

What it does. HB 4044, by Rep. Marcus Evans and Sen. Rachel Ventura, creates the Consumer Product Return Act [6]. A retail store that accepts the return of an unopened or unused consumer product may not limit the refund to store credit [7]. Prescription and over-the-counter medicine, medical equipment and food and beverages are excluded, as are businesses that make more than half their sales from food or drink [7].

The act leaves retailers a good deal of room. A store may require proof of purchase, may refuse a return it reasonably suspects is fraudulent, may keep its own return policy and need not take back anything that policy does not cover [7]. Violations are a business offense with a fine of up to $25, capped at $500 a year per store, and the county state’s attorney must give 30 days’ notice to cure before any fine [7]. Private suits are limited to injunctions, with no damages or attorney’s fees [7]. Home-rule units may not regulate returns [7].

Where it stands. Passed the House 101-0 and the Senate 56-2; signed July 24 as Public Act 104-0593; effective July 1, 2027 [6].

Pratt’s read. Evans called it “about fairness and protecting the hard-earned dollars of working people” [10]. Fair enough. Store-credit-only policies will have to change, and some retailers used them to manage return fraud and cash flow. But this is how a mandate should be drafted: a cure period, a hard annual cap, no fee-shifting lawsuits and one statewide rule instead of a municipal patchwork [7]. There is even a provision retailers will like. Online marketplaces and delivery intermediaries may not withhold the value of a product from the store when a purchase is rescinded and the consumer kept the item [7].

IL Illinois SB 3066: call ahead or forfeit the missed-visit fee

What it does. SB 3066, by Sen. Christopher Belt, creates the Service Appointment Fairness Act [8]. Any provider whose service requires entering a home or the customer’s presence must schedule an appointment and give a reasonable estimated arrival time or window [9]. If the window exceeds two hours, the provider must call no later than one hour before arriving, and a voicemail counts [9]. A provider that skips either step, or arrives more than 30 minutes after the time it gave, may not charge a fee if the customer is not home [9].

Where it stands. Passed the Senate 57-0 and the House 70-40; signed July 24 as Public Act 104-0656; effective January 1, 2027 [8].

Pratt’s read. The remedy itself is proportionate: miss the call, lose the fee. Belt’s case was that people should not be “left holding the bag if a company failed to communicate with them” [10]. The cost is in the enforcement wiring. A violation is an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act, open to the attorney general and state’s attorneys, and anyone with actual damages may sue under that act [9]. For a plumbing contractor or an HVAC outfit, that is a lot of legal exposure attached to a phone call. The state’s own enforcement is limited to a “pattern or practice,” which is the right limit [9]. The House margin, 70-40, was far closer than the Senate’s 57-0 [8].

On the calendar

Governor Abbott’s deadline for commission action on residential transmission costs is July 31 [3]. Comments on Project 58000 are due August 11, with adoption possible from August 23 [1]. SB 6 requires final rules by December 31 [2]. In Illinois, the service appointment law takes effect January 1, 2027, and the return law on July 1, 2027 [6, 8].