Time-of-Use (TOU) plans charge different prices at different times of day. If you can shift enough of your electricity use into cheaper hours, a TOU plan may reduce your monthly bill—but they aren't a universal win. This guide explains how TOU works in Texas and how to decide if it makes sense for your home.
How TOU pricing works
Instead of one flat cents-per-kWh price, TOU plans define two or more pricing periods (for example: on-peak, off-peak, super-off-peak). Each period has a different price. On most plans, on-peak hours are the most expensive and line up with late afternoon/early evening when demand is highest.
Who benefits from TOU plans?
- Households that can shift usage: If you run heavy loads (washing, EV charging, pool pumps) during off-peak hours, you can save.
- EV owners: Charging overnight typically matches cheap, off-peak windows.
- Homes with smart automation: Smart plugs, thermostats, and timers make shifting easy.
Who might lose on TOU?
If most of your usage occurs during a wide on-peak window (evening cooking, AC use, electric heating), the higher on-peak price can outweigh off-peak savings. Also watch for narrow off-peak windows or high on-peak premiums—those plans are harder to win with.
How to evaluate a TOU offer
- Get your usage profile: Look at three months of usage on your utility or retailer account and note hourly or daily patterns if available.
- Compare using realistic hours: Use the plan's published TOU hours and apply your hourly usage to compute a sample bill (many retailers provide calculators).
- Read the EFL: Check the Electricity Facts Label for sample prices and the contract term. EFLs show the all-in average at common usage levels but not hourly splits—you need both pieces.
Practical tips to maximize savings
- Program EV charging to run overnight or during the plan's off-peak window.
- Run dishwashers and laundry late at night when feasible.
- Use a smart thermostat to pre-cool or pre-heat your home ahead of on-peak hours.
Bottom line
TOU plans can save money for households willing and able to shift usage. They are especially powerful for EV owners and homes with automation. Always compare a TOU offer against a fixed-rate plan using your household's actual usage pattern—enter your ZIP below or ask Energy Direct and we'll run the numbers for you.