Starting this March, most residential electricity customers will be automatically transitioned to a Time-of-Use (TOU) rate plan. TOU pricing is an electric rate schedule that adjusts the price of your electricity based on both how much energy you use and when you use it. The TOU transition is part of a statewide initiative to create a cleaner and more reliable electricity grid. Learn more about why the transition is important, what it means for you, and how you can take advantage of off-peak rates to save on your bill.

What is the TOU rate plan?

Compared to flat rates, TOU pricing more accurately reflects the cost of electricity at the time you consume it. It means that electricity costs depend on the time of day. During evening hours, when electric demand goes up as we turn on our lights and cook dinner, higher (peak) prices for energy are charged. During daytime hours, when consumption and demand are lower, lower (off-peak) prices for energy are charged.

Why is California transitioning to the TOU rate plan?

The TOU rate plan encourages you to use electricity when demand is lower and power is cheaper. It helps to alleviate strain on the electric grid during peak times. TOU rates support a cleaner power grid by encouraging energy use when renewable resources are more readily available. Solar production typically peaks in the early afternoon, and wind energy peaks in the evening. Energy demand tends to spike from 4-9 p.m., when renewable energy resources aren’t at their highest production. Without energy conservation during this time, fossil fuel power plants are more likely to be switched on.