Time-of-Use Rates in California: A Complete Guide

Time-of-use (TOU) rates are becoming the default for California residential customers. Understanding how these rates work—and how to optimize your usage—can save you hundreds of dollars per year.

What Are Time-of-Use Rates?

Unlike traditional flat or tiered rates, TOU rates charge different prices depending on when you use electricity. Prices are highest during "peak" hours when demand is greatest and lowest during "off-peak" hours when demand is low.

California TOU Rate Schedules

Southern California Edison (SCE)

TOU-D-4-9PM (Most Common):

Peak: 4 PM - 9 PM weekdays (~45¢/kWh)
Off-Peak: All other hours (~28¢/kWh)
Super Off-Peak: Varies by season

TOU-D-5-8PM:

Peak: 5 PM - 8 PM weekdays (~48¢/kWh)
Off-Peak: All other hours (~27¢/kWh)
Shorter peak window, slightly higher peak rate

Pacific Gas & Electric (PG&E)

E-TOU-C:

Peak: 4 PM - 9 PM every day (~42¢/kWh)
Off-Peak: All other hours (~35¢/kWh)

E-TOU-D:

Peak: 5 PM - 8 PM every day (~44¢/kWh)
Off-Peak: All other hours (~34¢/kWh)

San Diego Gas & Electric (SDG&E)

TOU-DR1:

On-Peak: 4 PM - 9 PM (~55¢/kWh)
Off-Peak: 6 AM - 4 PM, 9 PM - 12 AM (~45¢/kWh)
Super Off-Peak: 12 AM - 6 AM (~35¢/kWh)

Why Peak Hours Are 4-9 PM

California's peak hours reflect when electricity demand is highest:

Solar Duck Curve

California has abundant solar generation during midday hours, which actually creates oversupply. As the sun sets (around 4-5 PM), solar production drops rapidly while demand increases as people return home.

Evening Demand Surge

Between 4-9 PM, households:

Turn on air conditioning after work
Cook dinner using electric appliances
Run dishwashers and laundry
Charge devices and use electronics

This combination creates the highest demand—and highest prices—of the day.

Strategies to Save on TOU Rates

Shift Usage to Off-Peak Hours

The most effective strategy is moving electricity-intensive activities outside peak hours:

Before 4 PM:

Pre-cool your home to 72-74°F
Run the dishwasher after lunch
Do laundry in the morning or early afternoon

After 9 PM:

Run the dishwasher
Do laundry
Charge electric vehicles
Run pool pumps

Reduce Peak Hour Usage

When you can't shift usage, reduce it:

Set thermostat to 78°F or higher during peak hours
Use fans instead of lowering AC
Grill outside instead of using the oven
Delay charging devices until after 9 PM

Automate Your Savings

Smart home technology can automate TOU optimization:

Smart Thermostats:

Program pre-cooling before peak hours
Automatically raise temperature during peak
Learn your schedule and optimize accordingly

Smart Plugs and Timers:

Schedule appliances to run during off-peak hours
Automate pool pump schedules
Control EV charging timing

Smart EV Chargers:

Schedule charging for super off-peak hours
Take advantage of lowest rates (often 12 AM - 6 AM)

Who Benefits Most from TOU Rates

Ideal Candidates

Work-from-home flexibility: Can shift usage throughout the day
Electric vehicle owners: Can charge overnight at lowest rates
Solar panel owners: Generate during off-peak, use grid during off-peak
Empty nesters: Home during off-peak hours, away during peak
Tech-savvy households: Comfortable with automation and monitoring

Poor Candidates

Families home during peak hours: Kids home from school 3-6 PM
Those who can't shift usage: Medical equipment, home businesses
Households without smart thermostats: Manual adjustments are difficult
Very low usage households: Savings potential is limited

TOU Rates and Solar Panels

TOU rates interact importantly with solar panels:

Net Metering Under TOU

When you have solar:

You generate most electricity during off-peak hours (midday)
You export to the grid at off-peak rates
You import from the grid during peak hours at peak rates

Optimizing Solar + TOU

Battery storage: Store midday solar for peak hour use
Pre-cooling: Use solar generation to cool your home before peak
EV charging: Charge during midday when solar is producing

Comparing Your Options

How to Evaluate TOU vs. Tiered

Get your usage data: Download 12 months of hourly usage from your utility
Calculate costs under each plan: Most utilities offer comparison tools
Consider your flexibility: Can you realistically shift usage?
Factor in future changes: EV purchase, solar installation, etc.

Rate Comparison Example

For a household using 800 kWh/month with 40% during peak hours:

Tiered Rate:

500 kWh @ $0.30 = $150
300 kWh @ $0.42 = $126
Total: $276

TOU Rate:

320 kWh peak @ $0.45 = $144
480 kWh off-peak @ $0.28 = $134
Total: $278

In this example, the rates are similar. But if the household shifts just 100 kWh from peak to off-peak:

Optimized TOU:

220 kWh peak @ $0.45 = $99
580 kWh off-peak @ $0.28 = $162
Total: $261

That's $15/month savings—$180/year—from shifting 100 kWh.

Making the Switch

Switching to TOU

Most California utilities have made TOU the default for new customers. Existing customers can switch through:

Online account portal
Phone customer service
Written request

Switching Away from TOU

If TOU isn't working for you, you can typically switch to a tiered rate:

May need to wait 12 months after enrolling
Contact your utility to discuss options
Consider whether behavior changes could make TOU work

The Bottom Line

TOU rates reward flexibility. If you can shift when you use electricity, you can save significantly. If your usage is fixed during peak hours, tiered rates might be better.

The key is understanding your usage pattern, being realistic about your flexibility, and monitoring your bills after any rate change.

Want to know if TOU would save you money? Our verification process calculates your costs under every available rate plan — view pricing.