Time of Use Electricity Rates Explained With Real Examples

A standard residential rate charges one price per kWh at every hour. A time-of-use plan splits the day, and sometimes the year, into periods with different prices:

• Peak. The hours when demand on the grid is highest. Many plans set this in the late afternoon and early evening on weekdays.
• Off-peak. Overnight and often weekends and holidays, when demand is low.
• Shoulder or mid-peak. A middle price in some plans.
• Seasons. Summer and winter can use different hours and different prices.

The reason is cost. Power is most expensive to produce and deliver when everyone wants it at once, and time-of-use prices pass part of that cost to the people who cause it.

Say a plan charges 30 cents per kWh at peak and 10 cents off-peak, and a flat plan charges 17.23 cents. These prices are examples, not a real plan. The average price you pay under the time-of-use plan depends on the share of your kWh that falls off-peak:

In this example a home that uses 64 percent or more of its power off-peak comes out ahead. Below that, the flat plan is cheaper. Homes that charge an electric vehicle overnight, run a dishwasher and laundry late and cool the house in advance tend to clear that bar. Homes that are busy at home on weekday evenings often do not.

Plans differ, so use this as a pattern and not as your schedule. A typical plan has cheap overnight hours, a normal price in the morning and a high price in the late afternoon and evening.

1. Ask your utility for your hourly or interval usage data. Many give it through the online account or a Green Button download.
2. Add up your kWh in the plan's peak and off-peak windows over a full year.
3. Price each window at the plan's rates, add the fixed charge, and compare the total with what you paid.
4. If the plan wins by a small amount only in summer, check the winter months too.

If you cannot get interval data, run the electric bill calculator twice, once at the peak price and once at the off-peak price, to see the range.

• Exactly which hours are peak, by season and by day of the week?
• What are the prices in each period, and is there a fixed monthly charge?
• Is there a trial period, and can I return to the standard rate?
• Is there a demand charge, where the highest hour of the month sets part of the bill?
• Does the plan change if I add solar, a battery or an electric vehicle later?

• Gain: electric vehicle owners who charge overnight, homes with batteries, households with someone home in the evening who can shift chores, and homes with flexible cooling.
• Lose: homes with steady weekday evening use, such as families who cook and run air conditioning from 4 pm to 9 pm, and households that cannot move their use for health or work reasons.

• U.S. Energy Information Administration, Form EIA-861 (final 2025 data)