Ever notice that your electric bill seems to punish you for living a normal life at normal hours? That may be because your utility charges more for electricity at certain times of day. The good news: once you understand time of use rates, you can often turn the same appliances into lower costs just by changing when you run them.
Quick answer: Time of use (TOU) rates charge different prices for electricity depending on the hour, with higher prices during “peak” times when demand is highest and lower prices off-peak, often overnight. If you can shift laundry, dishwashing, EV charging and cooling to cheaper hours, you may save. If most of your use happens at peak and can’t move, a flat rate may be better. Prices and hours vary by utility, so check your own rate schedule.
What Are Time of Use Rates?
With a standard flat rate, you pay the same price per kilowatt-hour (kWh, the unit your bill uses to measure electricity) no matter when you use it. With time of use rates, the price per kWh changes by time of day, and sometimes by season or weekday versus weekend.
Why do utilities do this? Electricity costs more to produce and deliver when everyone wants it at once, usually in the late afternoon and early evening. TOU pricing nudges households to spread out their use, which helps keep the grid steady and can help you keep more of your money.
The three usual price periods
Most TOU plans divide the day into two or three windows. Names and hours differ, so treat this as a general picture, not your plan’s exact schedule.
| Period | Typical timing | Typical price level |
|---|---|---|
| Off-peak | Overnight, early morning, sometimes weekends | Lowest |
| Mid-peak (shoulder) | Mornings and parts of the evening | In the middle |
| On-peak | Late afternoon to evening, often on weekdays | Highest |
Peak prices can be a noticeable multiple of off-peak prices on some plans. The exact gap varies widely by area and provider, so look at the actual numbers on your utility’s rate page.
Other versions you might see
Some utilities offer related designs. Critical peak pricing adds a very high price on a handful of extreme-demand days, with advance notice. Demand charges add a fee based on your highest burst of use. Peak-time rebates pay you for cutting use during alerts. If your utility offers one of these, ask for the schedule in writing.
The same dishwasher cycle can cost less or more depending only on the hour you press start.
Who Saves Money on Time of Use Rates (and Who Doesn’t)
TOU is not automatically a deal. It rewards flexibility. Before you sign up, be honest about when your household actually uses power.
You may save if you can…
- Charge an electric vehicle overnight.
- Run laundry, dishwasher and other big appliances late at night or on weekends.
- Pre-cool or pre-heat the home before peak hours, then coast through them.
- Be away from home during the weekday peak window.
- Use a smart thermostat or timers to automate shifting.
You may lose if you…
- Are home during the peak window and rely on heating or cooling then, with no room to adjust.
- Have medical equipment or health needs that require steady power or comfort.
- Work nights and sleep through cheap hours while using most power at peak.
- Have limited flexibility because of young kids, caregiving or a rigid schedule.
If you’re in the “may lose” group, don’t feel bad. A flat rate may genuinely be the better fit, and that’s a smart answer, not a failure.
How to Find Out If You’re Already on a TOU Plan
Some utilities enroll customers by default, and some areas require TOU for new meters or certain home types. You may be on one without realizing it.
- Look at your bill. Find the rate or plan name. Words like “TOU,” “time-of-day,” “peak,” “off-peak” or “EV rate” are clues.
- Log in to your utility account. Many show hourly or daily usage and the rate plan you’re on.
- Find the rate schedule. Search your utility’s website for the tariff or “rate plans” page and note the hours and prices.
- Call and confirm. Ask: “Am I on a time-of-use plan? What are my peak hours and prices this season?”
Your state’s public utility commission (sometimes called a public service commission) regulates many utilities and can confirm what plans must be offered where you live.
How to Test Whether TOU Will Save You Money
Don’t guess. Use your own data.
- Get your usage data. Download 12 months of bills, and hourly data if your utility offers it (often called “Green Button” data or an interval usage export).
- Sort your use into peak, mid and off-peak. Estimate what share of your kWh falls in each window.
- Price it both ways. Multiply your kWh in each window by the TOU prices, then compare to your flat-rate total. Include fixed monthly charges.
- Estimate what you could shift. Be realistic about the changes you’ll actually keep making.
- Ask about safeguards. Some utilities offer trial periods or bill comparisons. Ask what’s available and any rules about switching back.
Our average electric bill by state and home size guide helps you see whether your total usage is high or low compared with similar homes before you start shifting.
Money move: Before enrolling, call your utility and ask, “Can you show me what my last 12 months would have cost on the TOU plan versus my current plan?” Many utilities can run this comparison, and it takes the guesswork out.
How to Shift Your Usage and Cut Your Bill
If you do land on a TOU plan, small habit changes carry most of the savings. Start with the biggest, most flexible loads.
Biggest shifting wins
| Use | How to shift it | Effort |
|---|---|---|
| EV charging | Set the car or charger to start after peak hours | Low (set once) |
| Dishwasher | Use the delay-start feature, run after bedtime | Low |
| Laundry and dryer | Run loads at night or on weekends | Medium |
| Water heater | Use a timer or smart setting to heat off-peak, if compatible | Medium |
| Heating and cooling | Pre-cool or pre-heat before peak, then ease the setting | Medium |
| Pool pump | Run it overnight or midday off-peak, depending on your schedule | Low |
Savings from shifting vary a lot by home, climate and plan, and no result is guaranteed. Many households see the biggest change from just two or three habits, such as EV charging and the dishwasher. For additional strategies, see how to lower electric bill in summer.
Automate it so you don’t have to remember
Delay-start buttons, plug timers and smart thermostats do the remembering for you. A programmable thermostat can pre-cool your house in the afternoon before peak starts. For setup ideas, see our upcoming guide on best thermostat settings to save money year-round.
Also trim the always-on drains, since those run during peak hours too. Our phantom energy guide shows which devices quietly pull power while “off.”
Automate the shift once, and the savings keep working while you sleep.
TOU Rates, EVs, Solar and Heat Pumps
TOU pricing comes up most often with big electric loads, and some utilities design special plans for them.
Electric vehicles
EV owners are often the best fit, because a car can charge overnight when rates are lowest. Ask your utility whether it has an EV-specific rate or a separate meter option, and whether any charger rebates exist.
Solar
If you have or are considering solar panels, the rate plan matters a lot, because it affects what your solar production is worth and when. Rules for crediting excess solar vary widely by state and utility. Our honest solar savings breakdown walks through the math.
Heat pumps
Heat pumps run on electricity, so your rate plan can change the payoff. We cover the numbers in an upcoming piece on when a heat pump switch pays off, and on home energy rebates and tax credits to check. Program rules change, so confirm current details with your utility and official sources.
What If You Live in a Deregulated State?
In some states you can pick your electricity supplier, and some suppliers sell their own plans, including time-based ones. Read the contract terms carefully: price changes, cancellation fees and teaser rates matter. We’re preparing a guide on choosing an electricity supplier in a deregulated state.
If You Can’t Shift Your Usage
Maybe you have health needs, a rigid schedule or a household that’s home all day. That’s okay. You still have options.
- Stay on or return to a flat rate if your utility allows it. Ask about switching rules.
- Cut total use with a free home energy audit from your utility, which can find leaks, insulation gaps and wasteful equipment.
- Smooth out your payments with budget billing, which spreads costs evenly, though it doesn’t lower your actual usage costs.
- Ask for help. LIHEAP (the federal Low Income Home Energy Assistance Program), utility hardship funds and payment plans exist for a reason. Our help paying bills guide lists programs, and Benefits.gov or 211 can confirm current eligibility and amounts in your area.
For more ways to cut your total, start with our complete guide to lowering your electric bill, or browse more in the Utilities & Energy category. Want to see what else you could trim across all your bills? Try the free Bill Savings Finder.
A Script for Calling Your Utility
You can’t haggle the per-kWh price on a regulated plan, but you can ask smart questions. Here’s what to say.
“Hi, I’d like to understand my rate plan. Am I on a time-of-use plan, and what are my peak, mid-peak and off-peak hours and prices this season? Can you compare my last 12 months on this plan versus a flat rate? Are there any trial periods, bill protection or fees if I switch? And are there any assistance programs or payment plans I should know about?”
Write down the rep’s name, the date and what they tell you. If an answer sounds off, your state utility commission can help sort out disputes. Our guide to what’s possible when negotiating your electric bill covers more.
Want a second look at your electric bill?
Tell us what you pay now and we will follow up with ways to lower it, from do-it-yourself steps to vetted partner offers. Free, with no obligation.
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We will look at what you pay and follow up soon. Meanwhile, try our free negotiation script builder.
Key takeaways
- Time of use rates charge more at peak hours and less off-peak, so timing matters as much as how much you use.
- They tend to help people who can shift EV charging, laundry, dishwashing and cooling to cheap hours.
- Test the plan with 12 months of your own usage data before enrolling, and ask about trial periods or switching back.
- Automate with delay-start settings, timers and a smart thermostat so savings don’t depend on willpower.
- If you can’t shift, a flat rate, an energy audit, budget billing or assistance programs may serve you better.
- Rates, hours and rules vary by utility and state, so confirm details with your utility or public utility commission.
Frequently asked questions
Are time of use rates cheaper than flat rates?
Sometimes. They can save money if you can move big appliances, EV charging or laundry to off-peak hours. If most of your use lands in the peak window and you can’t shift it, a time of use plan can cost more than a flat rate. Compare your own usage against the rate schedule before deciding.
What hours are peak on a time of use plan?
It depends on your utility and plan. Many peak windows fall in the late afternoon and early evening, often on weekdays, but the exact hours, seasons and holiday rules vary. Your utility’s rate schedule or your online account will list them.
Can I switch back to a flat rate if time of use costs me more?
Often yes, but rules differ by utility and state. Some plans are optional, some have trial periods or bill protection, and some programs are mandatory in certain areas. Call your utility and ask whether you can switch and whether any waiting period applies.
Do time of use rates help if I’m home all day?
They can be harder, since daytime and evening activity may fall in peak hours. Households that are home all day sometimes still save by shifting laundry, dishwashing and cooling schedules. Run a month of your usage data against the plan’s prices to know for sure.
Is there help paying electric bills if I’m struggling?
Yes. LIHEAP, utility hardship funds and payment plans can help. Check Benefits.gov, call 211, or contact your utility and state utility commission to confirm what’s available and current eligibility rules where you live.
Bill Reduction Institute is an independent publication, not a utility or provider. We may earn referral fees from partners, which never changes our advice. Prices and savings mentioned are approximate and vary by area and provider.