The Benefits of Time-of-Use (TOU) Rates | Sonoma Clean Power

The Benefits of Time-of-Use (TOU) Rates

Published on 07/02/2021

Why time-based pricing is worth understanding.

By now, you have probably heard of time-of-use (TOU) rates. So why are electricity providers and the state encouraging customers to make the switch?

Well, for a couple of reasons. The first is that when we use energy is just as important as how much energy we use. By using electricity when renewable energy sources like wind and solar are more available, we can become a lot less dependent on fossil fuels.

Second, TOU rates can help customers save money. Most customers in Sonoma and Mendocino counties would benefit from switching to a TOU rate without changing any of their current behaviors. TOU rates offer lower electricity prices for up to 19 hours a day, with higher prices often between the evening hours of 4 p.m to 9 p.m. (when demand spikes).

On a time-based rate plan, the per kilowatt-hour (kWh) cost of using energy during off-peak hours is cheaper than the per kWh cost offered by most flat electricity rates. Meaning, if you can take advantage of the cheaper off-peak pricing and limit your energy use during peak hours, you could dramatically lower your bill.

Third, TOU rates are not about using less energy. They are about using energy thoughtfully. Many households are already conscious about conserving energy; however, they still experience higher bills than they'd like. By making small changes to when you run your major appliances and perform other energy-intensive activities, customers can unlock savings that are difficult to achieve on a standard tiered electricity rate, even for the biggest energy conservers.

Here are some examples of good TOU habits:

  • Instead of running your dishwasher immediately after dinner, set it to run overnight (after 9 p.m.) or run it in the morning (before 4 p.m.).
  • Do laundry during the morning or mid-day when energy prices are lower.
  • Set your electric vehicle charger, pool pump, thermostat, or water heater to avoid operating during the hours of 4 p.m to 9 p.m.

For more tips on how to reduce energy use between 4 p.m. and 9 p.m. and lower your bill, visit