Time-of-use (TOU) rates charge different prices for electricity depending on when you use it. Peak hours (typically weekday afternoons and evenings) have the highest rates because demand on the grid is greatest. Off-peak hours (nights and weekends) offer lower rates. Some utilities add a mid-peak tier. TOU pricing incentivizes consumers to shift energy-intensive activities to off-peak hours, reducing strain on the grid and potentially lowering bills. Many states are transitioning to TOU as the default rate structure.
Time-of-Use (TOU) Rates
Pricing that varies by time of day, with higher rates during peak demand hours and lower rates off-peak.
Related Terms
Electricity Rate
The price charged per kilowatt-hour of electricity, varying by customer class (residential, commercial, industrial).
Peak Demand
The maximum electricity consumption in a grid during a specific period, typically hot summer afternoons.
Tiered Pricing
A rate structure where the price per kWh increases as consumption rises above set thresholds.
this entity is one of the U.S. state-level electricity rates and generation mix concepts that recurs across this site. The definition above is the technical answer; the paragraphs below add the practical context for how the concept connects to the the EIA Open Data API and State Electricity Profiles data behind every per-entity page on the site.
In the the EIA Open Data API and State Electricity Profiles data, this concept shapes one or more of the fields that drive the per-entity grades and rankings on this site. The methodology page describes which fields feed into which output; this glossary entry documents the underlying term.
Source: U.S. Energy Information Administration, 2026.