Update: The rules used to calculate t2 CPU credit balances appear to have changed such that the issue prompting this question should no longer have an impact.

Based on customer feedback, we’ve updated T2 instances with a new CPU Credit allocation policy that is the same as or better than the previous policy in all cases. ... Now, earned CPU Credits do not expire until the instance is terminated or stopped. A T2 instance can still earn up to the same maximum level allowed by the instance size. The CPUCreditBalance will now increase anytime the current CPUCreditUsage is below the baseline and can grow to the maximum allowed for the instance size https://forums.aws.amazon.com/ann.jspa?annID=5196

h/t: Last Week in AWS for the update.

The original answer follows.

This question has caused me quite a bit of mental anguish over the last few hours, because the graphs almost make sense, based on what I know about t2 instances. Almost, but not quite, and I couldn't put my finger on the problem. That's the worst kind. Particularly being a huge fan of the value proposition offered by t2 machines.

But I did finally figure out what's going on here.

There's one concept of CPU credits the documentation doesn't seem to explain, but the math works out, and the explanation holds up nicely under real-world observations:

The most recently earned CPU credits are spent first, not last.

Does order matter? It does.

For testing, I used a t2.micro (primarily because I had an idle one that had been running for several days, and needed something to do, and I didn't want the extra "initial" credits of a new instance to cloud up the observations) but all instance types in the t2 class have similar behavior.

By way of background: in the t2 class, CPU credits are earned at different rates, but CPU credits are used at the same rate for all instance types in the class:

A CPU Credit provides the performance of a full CPU core for one minute.

The t2.micro and t2.small have only one core, so they can burn up to 1 credit per minute or 60 credits per hour, at 100% CPU utilization. The t2.medium and t2.large are dual core, so they can burn up to 2 credits per minute, or 120 credits per hour, at 100% CPU utilization on both cores.

If 1 credit = 100% of 1 core for 1 minute, then 1 credit is also equal to 20% of 1 core for 5 minutes. Since the Cloudwatch graph interval is in 5 minute increments, I set up the following test:

On a t2.micro that has been running for several weeks with essentially no load, I installed lookbusy, a handy utility that allows you to make a machine "look busy" with parameters you specify -- e.g, keep the CPU at 20% utilization.

$ screen -S eat_cpu $ ./lookbusy -v -c 20 -r fixed

This does exactly what you'd expect, burning 1 CPU credit every 5 minutes. The "CPU Credit Usage" graph confirms this, showing 1 credit being used every 5 minutes. (The CPU Utilization graph, and top , both confirm the 20%.)

But what's happening to my credit balance? It's being depleted by 1 credit every 5 minutes. That seems wrong, doesn't it? I mean, yes, I just said that's how many I'm using, but... I'm also supposed to be earning 6 credits per hour, so I should only be depleting by balance by a net of 0.5 credits every 5 minutes, right?

Hold on... checking the numbers, again: I'm earning 6 per hour, spending 12 per hour, so, yes... that seems like it should be a net decrease of only 6 per hour, not 12... right? Clearly, something doesn't add up the way I expected, because my balance is definitely going down by 12 per hour, and my CPU is definitely only running at 20%.

I seem to be earning no credits to offset my usage. How is that possible?

Unless...

Unused earned credits from a given 5 minute interval expire 24 hours after they are earned

Well, 24 hours ago, my instance was completely idle. During that hour, I earned 6 credits that I... didn't (?) use. Am I not using them now? Shouldn't I be?

any expired credits are removed from the CPU credit balance at that time, before any newly earned credits are added

Crud. Could this be related? This hour, I earned 6 new credits. But right before that, I lost 6 credits from 24 hours ago. Then I spent 12 credits this hour... so my balance when down by 6, up by 6, and down by another 12. Well, that explains the -12 change for the hour, but...

Can that be the reason?

I'm a voracious reader of documentation, so I knew about the expiring credits aspect... but I assumed all along that this was nothing more than the reason an idle instance hovers near its maximum balance, and did not have any other significance. How could it? If I have less than the maximum (6 x 24 = 144 for a t2.micro) then how could I have credits the need to expire?

If my credits from 24 hours ago are always counting against me, wouldn't my balance tend toward zero, regardless of what I do?

Unless...

After tossing and turning most of the night while contemplating sliding around piles of imaginary tokens (representing CPU credits) on an imaginary table top (representing time)... I realized that the "expiration" rule would cause exactly the behavior we observe if, counter-intuitively, credits are not spent in the order in which they are earned (FIFO), but rather in the reverse order (LIFO).

Following that line of reasoning, the explanation for what my 20% CPU test is actually doing is this, where the first hour of my test was "hour 0" --

| spends 6+6 credits | expire 6 credits test | earned this many | earned this many hour | hours before hour 0 | hours before hour 0 -----+---------------------+-------------------- 0 -1, -2 -24 1 -3, -4 -23 2 -5, -6 -22 3 -7, -8 -21 4 -9, -10 -20 5 -11, -12 -19 6 -13, -14 -18 7 -15, -16 -17

And they meet in the middle.

Is this genuine, or am I guessing? I'm not guessing, and here's the evidence:

After 8 hours, my CPU credit usage graph remains solid, still holding steady at 1 credit per 5 minutes, but after the same 8 hours, my CPU credit balance finally begins to deplete at the (slower) rate I originally expected: 0.5 credits every 5 minutes.

Apparently, as I worked backward in time, spending previously earned credits "newest first," I caught up with my old credits that were about to expire, finally reaching the point where I was using them before they had a chance to expire. Now, I have no credits that are 24 hours old, and so no credits are expiring -- so I am no longer losing credits before new credits are earned. I am now able to keep the 6 that I earn per hour, because I used up the old ones, decreasing the net impact to my credit balance to the expected level.

This explains the only reservation I had about the graphs in the question: why, when utilization drops off, does it take so long for the balance to rebound?

The TL;DR answer is this: the balance doesn't rebound immediately, after a burst of heavy utilization, because you still have unused credits from 24 hours prior, which are canceling out your newly-earned credits, until you reach the point in time when you don't have any 24-hour-old unused credits. When that happens, your credit balance increases again.

Leave the instance completely idle for 24 hours and you will eventually see the balance steadily (for the most part) rise to the maximum again, as expected. Anything less than 24 hours completely idle will cause your balance to remain perpetually be somewhere below the max.

My test script eventually depleted my credit balance almost all the way down. When I killed the process eating the CPU, the credit balance began to recover immediately, at the expected rate of 6 credits per hour.

Conversely, when I took a different machine that had seen low utilization for 24 hours, and ran it's CPU to 100% for a few minutes, then took it back to idle, the credits did not begin to accumulate immedately... being offset by old, expiring ones.

Quotes are from http://docs.aws.amazon.com/AWSEC2/latest/UserGuide/t2-instances.html.