What are time-of-use rates?
More and more, utility companies are implementing time-of-use (TOU) pricing programs to allow for electricity usage rates that change based on the time of day that electricity is used. For example, you would be charged lower prices for electricity that is used during lower demand time periods (typically in the late evening and early morning hours), and higher prices during “peak”, or high demand time periods (typically between 3 p.m. and 7 p.m.). TOU rates more closely mirror the utility’s cost to produce electricity and will be implemented with many utility smart grid programs to encourage consumers to use power during low-demand time periods. Utilities hope that consumers will better manage electricity usage, which will help utilities eliminate the skyrocketing peak demand across much of the nation, thereby avoiding the need for building additional power plants and power generating resources. The smart grid and TOU rates would ultimately allow for the introduction of renewable energy
