Time-of-use electricity

What does TOU mean?

TOU means time-of-use: a utility rate design that bills electricity differently depending on the clock hour, not a single flat ¢/kWh.

What does TOU stand for?

TOU stands for time-of-use. In U.S. electric tariffs it is the schedule layer of a rate plan: named periods such as on-peak and off-peak, the hours they apply, which days of the week, and any seasonal or holiday variants.

The abbreviation is also used outside electricity (terms of use). On this page it means the electricity meaning.

TOU definition

The TOU definition used across U.S. electric tariffs is a clock-based split of the day into named periods so usage in high-demand hours is billed differently from usage overnight or midday. The definition answers when, not how many cents.

Typical ingredients, all of which vary by utility and by rate plan:

  • Named periods (on-peak, off-peak, and anything in between)
  • Start and end times for each period
  • Which days they apply (weekdays only, or every day)
  • Seasonal variants (summer vs winter clocks are common)
  • Holiday rules (many tariffs treat observed holidays as off-peak)

The ¢/kWh attached to each period lives in a different part of the tariff — riders, baselines, customer class. tou.tools does not return those prices.

Why utilities use time-of-use

Grid demand is not flat. Afternoon air-conditioning, evening cooking, and EV charging stack onto the same hours. A TOU schedule pushes flexible load (water heaters, batteries, EVs) into cheaper windows so the utility does not have to build as much peak capacity.

For software, the useful fact is the boundary: is it peak right now, and when does the next period start. Price values change with riders and customer class; the clock does not.

Frequently asked

  1. Is electricity cheaper at night?

    On most U.S. time-of-use plans, yes — overnight hours are off-peak or super-off-peak because grid demand is low. Some solar-heavy utilities also have a cheap midday window. Night is not cheaper on a flat rate, and the exact cheap hours depend on the utility and plan. tou.tools does not publish ¢/kWh.

  2. What hours are peak hours?

    Peak hours are the on-peak window in a TOU tariff — typically weekday late afternoon and evening, when demand is highest. Common windows cluster around 4–9 PM, but they vary by utility, season, and plan. Weekends and holidays are often off-peak. There is no single national peak window.

  3. What is the cheapest time to use electricity?

    On a TOU plan, the cheapest clock hours are off-peak or super-off-peak — usually overnight, and sometimes midday on solar-heavy grids. Avoid the on-peak window. Exact hours are plan-specific. tou.tools returns period names and boundaries, not prices.