Time-of-Use Electricity Plans: Calculate the Cost From Your Actual Usage

A time-of-use plan only makes sense when your cheaper-hour savings exceed the higher price on the hours you cannot move. Do the comparison with interval usage if your utility offers it, or build a careful estimate from appliance schedules. A plan’s name is not enough: the territory, season, baseline allowance, peak window, and fixed customer charge all matter.

PG&E’s residential examples show why. Its E-TOU-C plan puts every day’s 4–9 p.m. use in the peak period and treats other hours as off-peak; it also applies a seasonal baseline allowance and a higher price above that allowance. Read PG&E’s current plan description. Those hours and rules belong to PG&E’s service area. Do not transplant them into another utility’s comparison.

Build the two-column comparison

Record these inputs from each tariff sheet: monthly kWh, peak kWh, off-peak kWh, peak rate, off-peak rate, baseline or tier rules, customer charge, delivery riders, and taxes. Then calculate:

energy subtotal = (peak kWh × peak rate) + (off-peak kWh × off-peak rate)

Add fixed and non-energy charges in the same way you did on the prior bill. If the plan uses a baseline or tier, split kWh into the applicable blocks before multiplying. The U.S. Energy Information Administration notes that rates can depend on customer type, amount used, and sometimes the time of use; it also cautions that an average retail price is not a tariff. EIA’s rate explanation is useful when a comparison site shows one blended number.

A hypothetical switch test

Assume 600 kWh: 240 kWh during peak hours and 360 kWh off-peak. Assume the current flat energy rate is $0.18/kWh. The flat energy subtotal is 600 × $0.18 = $108. For a teaching example, assume a TOU peak rate of $0.31 and off-peak rate of $0.12. The TOU subtotal is (240 × $0.31) + (360 × $0.12) = $117.60. It is $9.60 higher before fixed charges, so shifting 100 kWh from peak to off-peak would save $19 on the TOU side and make the subtotal $98.60. These are assumptions, not PG&E prices.

The useful threshold is the break-even peak share. In the example, compare the flat rate with the weighted TOU rate. If p is the share of kWh in peak hours, then TOU rate = p × $0.31 + (1-p) × $0.12. Solve for the point where it equals $0.18. That is p = ($0.18-$0.12)/($0.31-$0.12), or about 31.6%. A home above that peak share would need load shifting or a different plan; a home below it may benefit, subject to fixed charges and tiers.

What to verify before enrolling

Ask whether weekends and holidays use the same peak window, whether the utility limits how often you can change plans, and whether a smart meter is required. Identify the rate effective date and check whether a power-supply adjustment, delivery rider, or baseline allowance changes with the season. A plan can look cheaper on the energy line while its fixed charges remain unchanged.

Export one year of hourly data if available and tag cooking, laundry, water heating, HVAC, EV charging, and pool equipment. Shift only loads that your equipment and household can safely schedule. Recalculate with a hot month and a mild month. Keep the old tariff’s total beside the proposed tariff’s total; a national average or a promotional claim cannot answer an address-specific rate decision.