Guides

Time-of-use rates: who saves and who doesn't

By Kyle Tice · Updated October 2026

Time-of-use (TOU) rates charge more per kWh during a few peak hours and less the rest of the day. If you can move a quarter or more of your usage out of the peak window, or you already use little power then, you save. If you cannot, you pay more. The deciding factor is your schedule, not your total usage.

How it works

Instead of one price, your bill has two or three: peak, off-peak and sometimes super off-peak. The peak window is 3 to 5 hours on weekday afternoons and evenings, when the grid is most strained. Some utilities flip the window in winter to the morning.

The ratio of peak to off-peak price is what matters. A small ratio means little reward or penalty; a large ratio means your evening habits set the bill.

Peak windows and prices at big utilities

Prices are as of mid-2026 and exclude fixed charges and some riders; check your utility’s page for the current schedule. Two details change the math: APS adds a 3.5 cent super off-peak from 10 a.m. to 3 p.m. on winter weekdays, and California’s plans apply a baseline credit of 8 to 10 cents on the first block of usage.

Who wins

• EV owners. Charging 30 kWh overnight at 7 cents instead of 21 cents at Xcel saves about $4 a session. This is the single biggest TOU win.
• Households empty from 4 to 9 p.m. Commuters, shift workers, anyone whose evening load is lights and a TV.
• Shiftable loads. Dishwasher, laundry, pool pump, electric water heater on a timer, pre-cooling the house before the peak starts. A smart thermostat can do the pre-cooling automatically.
• Solar homes with a battery. Discharge during the peak window.

Who loses

• Home all day with the AC on. In Phoenix or Sacramento, the 4 to 7 p.m. window is also the hottest part of the day.
• Electric resistance heat where the winter peak is in the morning. Duke Carolinas’ 6 to 9 a.m. window hits exactly when heat strips run hardest.
• Medical equipment and small children. Loads you cannot shift.
• Small flat users. If your usage is already low and flat, a TOU plan rarely saves more than a few dollars and adds complexity.

A rough test: peak hours are about 20% of the week. If more than about 25% of your kWh falls in them, you will likely pay more on a high-ratio plan.

Default rollouts: you may already be on one

California’s three big utilities moved customers to TOU by default between 2020 and 2022. Xcel Colorado made TOU the default for residential customers and simplified it to a single 5 to 9 p.m. weekday peak on November 1, 2025. Most APS plans are time-based. ComEd’s Time-of-Day rate, launched in 2026, is optional. Check the rate schedule code on your bill (E-TOU-C, TOU-D, “Time of Use”) to see which plan you are on; our bill guide shows where to look.

How to try it without risk

1. Use the utility’s comparison tool first. PG&E, SCE, Xcel and APS all run your last 12 months of smart-meter data through each plan and show what you would have paid. This is the only number that matters; do it before switching.
2. Ask about bill protection. PG&E and SCE gave customers moved to TOU by default 12 months of bill protection: if you paid more than the old tiered rate, the difference was credited. Bill protection usually applies to default transitions, not voluntary switches, so ask.
3. Confirm the exit rule. Xcel lets you return to a flat rate at any time at no cost; ComEd lets Time-of-Day customers leave at any time without penalty; PG&E allows one TOU plan change a year.
4. Set the timers before day one. Water heater, dishwasher, EV charger, thermostat pre-cool. Savings come from automation, not willpower.
5. Check after 3 months. Compare the per-kWh average on your bill with the flat rate. If it is higher and you cannot shift more, switch back.

In choice states the delivery side can be time-based while the supply side is flat, or the reverse, so read both sections. Find your utility from the state list to see its current plans and any rate case that would change the peak price.