Understanding Time of Use Pricing

Most people pay one flat rate for electricity — the same price per kilowatt-hour at 3 AM as at 6 PM. But millions of households, especially in California, New York, Arizona, and Hawaii, are on Time of Use (TOU) pricing. If you're on TOU, what time you run your devices matters as much as how much power they draw.

What is Time of Use pricing?

TOU pricing divides the day into rate tiers based on grid demand. Electricity costs more during peak hours (when everyone is home and using power) and less during off-peak hours (overnight, early morning). Some utilities add a third mid-peak tier in between.

A typical California TOU schedule looks like this:

Period	Hours	Rate
Peak	4 PM – 9 PM	~$0.45–$0.55/kWh
Off-Peak	9 PM – 4 PM (next day)	~$0.28–$0.35/kWh

Running a 1,500W space heater for 2 hours at peak costs roughly $1.50–$1.65. The same heater for the same 2 hours off-peak costs about $0.84–$1.05 — a 40–50% difference.

Why does the grid charge more at peak hours?

Utilities have to match supply to demand in real time. During peak hours, they spin up expensive natural gas "peaker" plants that only run when demand spikes. TOU pricing is how utilities pass that cost to consumers — and incentivize people to shift load off the peak.

For home lab builders: your always-on servers, NAS boxes, and networking gear are already running off-peak. That's good. The question is whether your on-demand loads — EV chargers, dishwashers, clothes washers, water heaters — are also timed to avoid peak.

How PowerUsage uses TOU data

When you set your location, PowerUsage fetches your utility's TOU schedule. The cost calculator will show you what a device costs under your actual rate tiers, not just a flat average. The shift savings feature finds the cheapest window in your TOU schedule for a given usage duration.

If your utility isn't in our database yet, you can enter custom rate tiers manually in the calculator settings.

How to find out if you're on TOU

1. Log into your utility's website and look for "rate plan" or "rate schedule"
2. Check your paper bill — the rate code is usually printed near the top
3. Search [your utility name] time of use rate schedule

Common utilities with default TOU for residential customers: PG&E (California), SCE (California), SDG&E (California), Con Edison (New York), APS (Arizona), HECO (Hawaii).

The bottom line

If you're on TOU pricing, the clock on your devices is as important as their wattage. A high-wattage device run at the right time can cost less than a low-wattage device run at the wrong time. PowerUsage shows you both numbers so you can make the call.