Time-of-Use Tariff
A time-of-use tariff sets electricity prices that vary by time of day, encouraging customers to shift consumption away from peak periods. Utilities design TOU structures using AMI data, system load profiles, and policy objectives to flatten net load curves and integrate renewables.
Tariff blocks typically include off-peak, mid-peak, and on-peak periods, sometimes supplemented with seasonal adjustments. Customers with flexible loads, such as EV charging or thermal storage, can dramatically reduce bills by automating schedules. Industrial users integrate TOU signals into process controls to avoid overlapping with capacity peaks.
TOU tariffs often serve as gateways to more advanced structures like critical peak pricing or distribution flexibility markets. They also provide data for non-wires alternative evaluations by demonstrating measurable demand shifts.
Regulators assess TOU adoption and bill impacts to ensure equitable outcomes, leading to opt-in pilots, default TOU migrations, or targeted exemptions for vulnerable customers.
Technical Details
- •Requires interval metering and automated billing systems
- •Defines price blocks by time of day and season
- •May include demand charges or baseline allowances
- •Often paired with EV or appliance rebates to drive participation
- •Provides data for evaluating demand response and non-wires alternatives
Why It Matters
TOU tariffs influence how quickly flexible demand resources emerge. Tera tracks TOU structures, enrollment rates, and geographic coverage so asset developers can size storage, EV, and load management offerings appropriately.
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