Time-of-Use Electricity Plans: Are They Right for You?

What Is a Time-of-Use (TOU) Electricity Plan?

Time-of-Use (TOU) electricity plans are pricing structures where your rate for electricity depends on when you use it. The day is divided into peak hours (typically when demand is highest), off-peak hours, and sometimes mid-peak hours. These plans are especially popular in deregulated markets like Texas, where consumers have the power to choose among different pricing options.

Instead of paying a flat rate per kilowatt-hour (kWh), you're incentivized to shift your electricity usage to times when demand (and prices) are lower—usually at night or on weekends.

Texas REPs (Retail Electricity Providers) like Pulse Power and Rhythm Energy offer TOU plans such as “Free Nights” and “Free Weekends,” allowing customers to use electricity for little to no cost during those off-peak periods.

How Do Time-of-Use Plans Work?

Time-of-Use (TOU) electricity plans work by varying the cost of electricity depending on the time of day you consume it. This pricing model encourages consumers to reduce their usage during peak demand times and take advantage of lower rates during off-peak hours. The strategy behind TOU is not just about saving money — it's also about supporting a more balanced and efficient power grid.

In Texas, TOU plans are made possible by smart meters, which are now standard across the state due to state-mandated rollouts by the Public Utility Commission of Texas (PUCT). These devices record energy usage in 15-minute intervals and transmit that data to your provider, enabling them to charge you precisely based on when you use electricity. Learn more about how smart meters work from Energy.gov.

Here’s a simplified example of how usage windows are typically structured in TOU plans:

• Peak hours: 3 PM – 8 PM — Electricity is most expensive due to high demand
• Mid-peak: 8 AM – 3 PM — Moderate pricing
• Off-peak: 8 PM – 8 AM — Lowest cost, sometimes even free (as seen in "Free Nights" plans)

These time windows can vary by provider and plan, so it’s critical to review the Electricity Facts Label (EFL) for exact details. The EFL breaks down energy charges, delivery fees, and time-based pricing to help you make an informed decision. If you're new to comparing EFLs, we have a full guide available in our post on how to read an Electricity Facts Label.

In Texas, power is delivered to your home by Transmission and Distribution Utilities (TDUs) like Oncor, CenterPoint, AEP Texas Central, and others. These utilities maintain the power lines, poles, and meters — and they’re the ones to contact in case of outages. However, the rate you pay and the type of plan you choose (like TOU) is determined by your Retail Electricity Provider (REP).

Time-of-use plans also align well with smart home technology. Using programmable thermostats, smart plugs, or appliances with timers can help shift your energy usage into lower-cost timeframes — automating your savings. We've gone deeper into home automation and time-of-use benefits on our post about the best energy saving devices for your home.

As renewable energy becomes more integrated into the Texas grid, TOU plans are expected to evolve even further. With more solar during the day and wind power at night, dynamic pricing helps balance supply and demand while potentially saving you money — all while contributing to a greener energy future.

How Much Can You Save With TOU Plans?

The biggest advantage of Time-of-Use (TOU) electricity plans is the opportunity to lower your monthly energy bill—sometimes significantly—by simply adjusting when you use power. Instead of paying a uniform rate throughout the day, TOU plans reward you for shifting high-energy activities like doing laundry, running the dishwasher, or charging your electric vehicle (EV) to off-peak hours.

If you're strategic about when you use electricity, you could see savings between 15% and 30% compared to standard fixed-rate plans. In fact, according to data from the U.S. Department of Energy, households that participate in TOU pricing programs can save hundreds of dollars annually, depending on their flexibility and usage patterns.

Here are some common ways you can capitalize on off-peak savings:

• Run appliances after 8 PM: Dishwashers, washing machines, dryers, and other major appliances consume a lot of energy. Running them during discounted nighttime hours can make a noticeable dent in your bill.
• Charge your EV overnight: With an electric vehicle, charging during off-peak hours can lead to substantial monthly savings. Some Texas REPs even offer plans tailored specifically for EV owners.
• Automate your thermostat: Using a smart thermostat, you can pre-cool your home before peak hours begin and reduce HVAC activity when rates are higher.
• Pre-cook or use slow cookers overnight: Kitchen activities like oven baking can be shifted to lower-rate hours, especially for those working from home.

It’s important to know that TOU plans might not be beneficial for everyone. If your energy consumption is concentrated during peak hours—typically between 3 PM and 8 PM—you may actually pay more than with a flat-rate plan.

Moreover, electricity rates can fluctuate seasonally, especially during the summer months in Texas when demand spikes due to air conditioning usage. During these times, peak pricing can become very steep. To avoid bill shock, be sure to check each plan's Electricity Facts Label (EFL) for full rate details.

Who Should Consider a Time-of-Use Plan?

TOU plans offer flexibility and the potential for significant savings—but they're best suited for certain lifestyles and usage patterns. To truly benefit, you need to be able to shift your electricity usage away from peak demand hours.

These plans tend to be a great fit for:

• Night owls and weekend-focused households: If your energy-heavy activities happen after sunset or mostly on weekends, TOU plans with "Free Nights" or "Free Weekends" can drastically reduce your bill.
• Electric vehicle (EV) owners: Charging your EV overnight can dramatically lower your monthly electricity costs, especially with plans designed around off-peak usage.
• Remote workers with flexible schedules: If you're home during the day but can adjust your heavy usage to early morning or late evening, you can still benefit.
• Tech-savvy households: Homes with smart thermostats, smart plugs, and programmable appliances can automate usage and optimize savings with minimal effort.
• Small households or empty nesters: With fewer people at home during peak hours, it's easier to keep consumption low during expensive time windows.

However, TOU plans may not work as well for:

• Large families at home during peak hours: If your household is most active between 3 PM and 8 PM, you could end up paying more.
• Those with inflexible routines: If you can’t shift your cooking, cleaning, or HVAC usage to off-peak times, a fixed-rate plan might be more cost-effective.
• People who value simplicity: TOU plans require a bit more awareness and planning. If you prefer set-it-and-forget-it billing, a fixed-rate plan may offer more peace of mind.

You can explore smart strategies and tools that complement TOU plans in this article by the National Renewable Energy Laboratory (NREL). When used wisely, TOU pricing doesn't just reduce your costs—it also contributes to a more sustainable, balanced grid by minimizing stress during peak hours.

TOU Variants: Free Nights and Free Weekends

Many Time-of-Use (TOU) electricity plans in Texas feature highly attractive perks like Free Nights or Free Weekends — cleverly designed options that reward you for shifting your power usage to off-peak hours. These types of plans are especially popular in deregulated areas of Texas, where consumers can choose from a variety of competitive rate structures.

Here’s what they usually mean:

• Free Nights: Electricity usage is free between 8 PM and 6 AM. This allows for cost-effective charging of electric vehicles, running energy-intensive appliances, or simply cooling your home overnight without racking up high bills.
• Free Weekends: Electricity is free from midnight Friday (or Saturday) to 11:59 PM Sunday. These plans cater to weekend-focused households that want to mow the lawn, do laundry, or run the dishwasher without worrying about high electricity costs.

These TOU variants are ideal for individuals and families who can align their energy use with the free periods. This might include:

• Professionals who work long hours during weekdays
• Households with programmable thermostats and smart appliances
• EV owners who charge overnight
• Parents who batch chores and activities on the weekend

Pairing with smart devices is a major advantage. Smart thermostats like Nest or Ecobee, along with programmable water heaters and laundry machines, can automate your high-usage activities to fall within the free-rate periods — saving you money without needing to change your routine.

However, it's important to read the fine print. Some plans offering "free" electricity at certain times might make up for it with higher rates during peak periods. Always consult the plan’s Electricity Facts Label (EFL) to see the exact breakdown of pricing. You can learn how to interpret an EFL in our helpful guide.

How to Choose a TOU Plan (Without Guesswork)

Choosing a Time-of-Use plan doesn't have to feel like a guessing game — but it does require a bit of self-awareness and strategy. The key to unlocking real savings lies in matching your household habits with the rate structure of the plan.

Here are a few steps to help you decide which TOU electricity plan fits your lifestyle:

• Review your smart meter data: If you live in Texas, chances are your home is already equipped with a smart meter. You can log in to your account with your local TDU (like Oncor or CenterPoint) to view your historical usage patterns. This will help you see when you're consuming the most electricity.
• Understand your energy routine: Are you running the AC all day while working from home? Or do you typically use most electricity after dark? This matters. If your heaviest usage already falls during off-peak hours, you're a great candidate for TOU savings.
• Leverage home automation: Smart home devices are TOU's best friend. Products like the Google Nest Learning Thermostat, Ecobee, or Sense Energy Monitor can help schedule and reduce peak-time consumption. Learn more about how energy tech can help at NREL.gov.
• Compare the full cost of plans: A "free" plan may still have high base fees or steep peak-hour rates. That’s why it’s essential to review the Electricity Facts Label (EFL) for each plan you’re considering. Look for delivery charges, base fees, and tiered rates.

Time-of-Use electricity plans in Texas can be a game-changer if you’re able (and willing) to shift your energy usage. From Free Nights to Free Weekends, you’ll find lots of options to fit your lifestyle—especially if you're using smart tech or have an EV. Just remember: the key to saving is shifting, not just choosing.

To make this process easier, our electricity plan search tool allows you to filter for TOU plans, including “Free Nights” or “Free Weekends.” You’ll also see detailed plan data upfront—so you can make an informed decision without any surprises.

Still not sure what plan to pick? Our team can help you break down your usage patterns and compare your options. Reach out anytime or start by using our zip code tool to view the most accurate pricing for your area.