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Time-of-Use Electricity Rates: Save 20-40% by Shifting When You Use Power
Electricity costs different amounts at different times of day, like airline tickets. Off-peak hours are the cheapest. Here is how to take advantage of time-of-use pricing to significantly reduce your bill.
What Are Time-of-Use Rates?
Time-of-use (TOU) rates charge different prices for electricity depending on when you use it. During peak demand hours (typically late afternoon and evening on weekdays), rates are highest. During off-peak hours (nights, weekends, and holidays), rates are lowest. A mid-peak period often sits between the two.
The logic is simple: the electrical grid strains most when everyone comes home from work and turns on air conditioning, cooks dinner, runs the dishwasher, and charges their EV simultaneously. By incentivizing people to shift some usage to lower-demand times, utilities can reduce peak strain and pass the savings to customers.
Typical TOU Rate Schedule
Peak
4pm - 9pm
Weekdays only
~22-28 cents/kWh
Mid-Peak
7am - 4pm
and 9pm - midnight
~16-20 cents/kWh
Off-Peak
12am - 7am
+ all weekends
~11-14 cents/kWh
Exact hours and rates vary by utility. These are representative ranges based on PG&E, SCE, Duke Energy, and Arizona Public Service schedules.
How Much Cheaper Is Off-Peak?
Off-peak rates are typically 20 to 40% below peak rates. At a peak rate of 24 cents per kWh, off-peak might be 12 to 16 cents. For a household using 886 kWh per month, shifting 50% of usage to off-peak hours saves approximately $25 to $45 per month, or $300 to $540 per year.
| Usage Shifted to Off-Peak | Monthly Savings | Annual Savings |
|---|---|---|
| 25% | $12 - $22 | $144 - $264 |
| 40% | $20 - $36 | $240 - $432 |
| 50% | $25 - $45 | $300 - $540 |
| 65% | $32 - $58 | $384 - $696 |
Based on 886 kWh/month, peak rate of 24 cents, off-peak rate of 13 cents.
Which Appliances to Shift
EV Charging
$30 - $60/moOvernight (12am - 6am)
Schedule Level 2 charger to start at midnight. Most EV chargers and car apps have built-in scheduling.
Laundry
$8 - $15/moAfter 9pm or weekends
Run washer and dryer after peak hours. Each load uses 2 to 5 kWh. Use delay-start timers.
Dishwasher
$5 - $10/moAfter 9pm
Load after dinner, set delay-start to run at 9pm or later. Uses 1.5 to 2 kWh per cycle.
Pool Pump
$20 - $40/moEarly morning (5am - 7am)
Pools need 8 to 12 hours of filtration. Schedule overnight or early morning runs.
Water Heater
$10 - $20/moPre-heat off-peak
Heat water during off-peak hours. A well-insulated tank holds temperature for hours.
HVAC Pre-cooling
$15 - $30/moBefore 4pm peak starts
Cool your home to 72 degrees by 3:30pm, then let it coast up to 76 during peak hours.
Which Utilities Offer TOU Rates?
TOU rates are expanding rapidly across the US. California has made TOU the default rate for all residential customers. Major utilities in many other states offer optional TOU plans. Here are some of the largest.
| Utility | State | TOU Status |
|---|---|---|
| PG&E | California | Default for all residential |
| Southern California Edison | California | Default for all residential |
| SDG&E | California | Default for all residential |
| Arizona Public Service | Arizona | Optional, incentivized |
| Duke Energy | NC, SC, FL | Optional residential TOU |
| Georgia Power | Georgia | Optional TOU (Nights & Weekends) |
| ComEd | Illinois | Real-time pricing available |
| Consumers Energy | Michigan | Optional residential TOU |
| Xcel Energy | CO, MN | Optional TOU pilot programs |
| Dominion Energy | Virginia | Optional TOU plan |
Who Should Avoid TOU Rates?
Work-From-Home Households
Heavy daytime computer, lighting, and HVAC usage during peak hours can make TOU more expensive than flat rates. Run the numbers before switching.
Medical Equipment Users
CPAP machines, oxygen concentrators, and dialysis equipment run 24/7. Since usage cannot be shifted, TOU rates may increase costs during peak hours.
Households That Cannot Shift
If you cannot realistically change when you run major appliances (young children, elderly residents, fixed schedules), TOU savings may not materialize.
Smart Device Users: Great Fit
Smart thermostats (Nest, Ecobee) with TOU scheduling, smart plugs with timers, and EVs with scheduled charging make shifting effortless and automatic.