Time-of-Use
TOUAn electricity rate structure where the price per kWh changes based on the time of day, day of week, or season.
Full Technical Definition
Time-of-Use (TOU) electricity plans charge different rates depending on when energy is consumed. Peak hours (typically weekday afternoons when HVAC demand is highest) carry higher prices per kWh, while Off-Peak and Super-Off-Peak hours (overnight and weekends) feature lower rates or even free electricity.
Real-World Texas Example
A Texas household on a Free-Nights plan pays 0¢/kWh for electricity used between 8:00 PM and 6:00 AM, but pays a higher daytime rate of 21¢/kWh from 6:01 AM to 7:59 PM.
Total Bill = ∑ (kWh_peak × Rate_peak) + ∑ (kWh_offpeak × Rate_offpeak) + TDU ChargesFrequently Asked Questions
Who benefits most from Time-of-Use (TOU) plans?
Homeowners with electric vehicles (EVs) charging overnight, home battery systems capable of peak shaving, or households able to shift major appliance usage (laundry, dishwashing) to off-peak hours benefit most.
Are free-night plans always cheaper than fixed-rate plans?
Not necessarily. If a home consumes significant electricity during the daytime peak hours, the elevated daytime rate can outweigh nighttime savings.