Time-of-Use Electricity Rates Explained

What are time-of-use rates?

A time-of-use (TOU) rate is an energy rate structure with different prices for electricity depending on the time of day. The rules of these plans vary, but they often offer free or discounted periods during off-peak hours, such as overnight. Terms differ by provider and plan, so read the Electricity Facts Label (EFL) to confirm the details of any TOU plan.

Who benefits from a time-of-use rate?

A TOU plan is best suited for customers whose energy patterns match the cheapest window. For example, if a TOU plan offers lower rates in the evenings, make sure you use most of your energy during that window.

In general, a TOU plan isn’t a great fit for someone with a traditional 8 a.m.–5 p.m. work or school schedule because much of their usage falls into peak hours. Ask yourself these questions to determine if a TOU plan is right for you:

• Do you mostly use electricity during the cheaper windows?
• Are the TOU rates lower than other options in your area?
• Can you shift the largest energy tasks (dishwasher, laundry, etc.) to the discounted hours?

If you answered “yes” to these questions, a TOU plan could be a good fit. Call our team for guidance on whether a TOU plan is right for you.

Tips to get the most out of a TOU plan

If you choose a TOU plan, here are a few practical ways to maximize value:

• Run large appliances (dishwasher, washer/dryer) during the discounted window, often at night.
• Charge your electric vehicle overnight.
• Invest in a smart thermostat to program heating and cooling around discounted hours and avoid peak times.

Our advice: If a TOU plan requires you to drastically change your energy habits, it likely isn’t a good fit. Prioritize a plan that complements your schedule and budget.

Our top TOU plans

TXU Energy is one of our most popular providers for time-of-use rates. Explore a couple of TXU’s competitive TOU plans:

TXU Energy Daytime Pass 12

This Daytime Pass plan gives you 50% off all energy consumed from 9 a.m. to 4:59 p.m. It could be ideal if you work nontraditional hours (for example, overnight shifts) and spend most of your time at home during the discounted window.

TXU Energy Free Nights and Solar Days 12

Enjoy 100% discounted energy charges from 8 p.m. to 4:59 a.m. Consider this plan if you are away from home during the day and typically use most of your energy in the evening. It is also backed by Texas solar and wind energy, helping you go green with your energy plan.

Call the number on your screen to chat with one of our energy agents about these plans.

Time-of-use rates FAQs

What is the cheapest time of day to use electricity?

Overnight is typically the cheapest time to use electricity, but each TOU plan has its own rate structure and windows. Check the EFL to confirm a plan’s exact hours and rates.

Are time-of-use plans a good idea?

TOU plans can benefit customers whose schedules and usage align with the discounted windows. For the average energy consumer with a standard daytime schedule, TOU plans are often not recommended because much usage falls during peak hours. If your lifestyle naturally matches the cheaper hours, a TOU plan may save you money.

What are peak hours for electricity usage?

Peak hours are typically from about 4 p.m. to 9 p.m., when many people return home from work or school and demand for electricity rises. During peak hours, demand and prices can be higher.

Who benefits most from TOU rates?

Customers who work nontraditional hours (overnight shifts), households that can shift major energy tasks to discounted windows, or EV owners who can charge overnight tend to benefit most from TOU plans.