Time-of-Use Electricity Rates: Is Your Plan a Good Fit?

The cheaper plan depends on when those kWh arrive

A time-of-use electricity plan can cost less than a flat rate if enough of your electricity use falls in its cheaper hours. It can also cost more, even with exactly the same monthly kWh. The useful comparison is your household’s usage in each price window, plus the plan’s other charges.

Start with the hours your home cannot easily avoid: dinner, an evening return from work, heating on a cold morning. Then look for consumption you could move without disrupting the household. An attractive overnight price does little for you if most of your electricity is needed before that price starts.

The Department of Energy explains that time-based programs encourage customers to move consumption away from periods of high demand. That creates an opportunity, but the price difference alone is not a savings calculation. Your schedule supplies the missing half.

Two schedules, 900 kWh, a $43.20 difference

Consider an illustrative plan charging 30¢ per kWh during peak hours and 14¢ at all other times. Compare it with a flat 20¢ rate. These are invented prices, not a national average or an offer from SCE or another utility. Assume identical fixed charges, no tiers, no credits and no demand charge.

Both households below use 900 kWh in a month. Household A uses 20% during peak hours; household B uses 50%. The table covers usage charges only.

Find the share that changes the result

For A, the arithmetic is 180 × $0.30 + 720 × $0.14 = $154.80. For B, it is 450 × $0.30 + 450 × $0.14 = $198.00. A comes out $25.20 below the flat-rate usage charge; B is $18 above it. Their electricity consumption is identical, but their time-of-use charges differ by $43.20.

In this two-price example, the break-even peak share is (20 − 14) ÷ (30 − 14) = 37.5%. Below that share, the time-of-use usage charge is lower. Above it, the flat rate wins. At exactly 37.5%, both produce $180 for 900 kWh.

Each kWh moved from peak to off-peak saves 16¢ under these assumptions, so moving 100 kWh changes the usage charge by $16. Cutting consumption and moving consumption are different actions: this example isolates timing. If the competing plans have different fixed charges, credits or extra price windows, compare their full totals instead of applying this threshold.

An SCE example: cheap hours change with the season

Southern California Edison’s residential TOU-D-4-9PM plan shows why an evening label is not enough. Its published schedule, checked October 30, 2026, uses June through September for summer. From 4 to 9 p.m., summer weekdays are on-peak and weekends are mid-peak. Other summer hours are off-peak.

For October through May, its chart applies to weekdays and weekends: 8 a.m. to 4 p.m. is super-off-peak, 4 to 9 p.m. is mid-peak, and the remaining hours are off-peak. Overnight is therefore not the cheapest winter window on that chart.

This is a California utility example, not a US-wide timetable. SCE also says its displayed prices cover both generation and delivery from SCE; customers with a separate generation provider need that provider’s prices. Use the schedule attached to your own account, including its holiday rules, rather than borrowing another household’s peak hours.

Use interval data before changing the household routine

A monthly meter total cannot tell you how much electricity landed between 4 and 9 p.m. Look in your utility account for hourly or shorter-interval usage, a downloadable usage file, or a rate-comparison report. DOE’s Energy Saver guide describes how smart-meter customer portals can show hourly consumption; availability depends on your utility.

Compare a full year if you have the records. A mild spring month can hide summer cooling or winter heating that overlaps expensive hours. Assign the recorded kWh to each proposed plan’s actual windows, then multiply by the matching prices. Keep weekdays, weekends and holidays separate wherever the tariff treats them differently.

Run the comparison twice: once with the schedule you already follow and once with changes you could reliably maintain. Don’t count every peak kWh as movable. Work hours, caregiving and comfort can limit what changes, and electricity needed for medical equipment should not be delayed for a price window.

If a utility comparison tool assumes unchanged usage, keep that result as the starting case. Ask whether its estimate includes all delivery charges, fixed fees and applicable credits, and whether it uses current prices or historical ones. Save the assumptions along with the estimate so you can explain any later difference.

Read the switching terms as carefully as the prices

Before enrolling, find the plan code, effective date, seasonal calendar and rules for leaving. Ask when a change would start and whether a trial, bill protection or return option actually applies to your account. A lower-price window is less useful if the plan is a poor fit for months you have not examined.

SCE’s current TOU FAQ says switching to a time-of-use rate prevents another switch for a full 12 months. It also warns that leaving a discontinued plan means you cannot re-enroll in it. Those are SCE terms; ask your own utility for its written rules.

A national average electricity price cannot settle this choice. EIA says it does not publish utilities’ peak and off-peak retail tariffs. Use your utility’s current residential schedule and any separate supplier’s terms for the comparison, not an average price from a state chart.

Keep a blended rate tied to the schedule behind it

In the invented example, A’s blended usage rate is 17.2¢ per kWh ($154.80 ÷ 900 × 100), while B’s is 22¢. Those rates summarize different schedules. Entering 17.2¢ for a future month silently assumes the same 20% peak share and unchanged prices.

Our US calculator models one rate, fixed charges and separately entered taxes and fees. It does not reconstruct time-of-use windows, tiers, demand charges or solar credits. For a simple scenario, calculate the usage-weighted rate first and enter it in the calculator, keeping fixed charges separate. For an actual plan decision, use the utility’s detailed comparison.

Before switching, save one comparison using your existing usage and a second using only the changes you expect to keep. If the plan works only when the household follows an unrealistic schedule, choose on the first result.