Time of use electricity plans can lower your Texas electricity bill, but only if your household can shift energy-heavy tasks away from late-afternoon and early-evening hours. For families who run dishwashers after 9 p.m. and pre-cool their homes before 3 p.m., the savings are real. For households with rigid schedules, the math often does not favor switching.

This guide explains how time of use plans work in Texas, what the actual rate windows look like, which providers currently offer them, and how to decide whether one fits your life.

What Is a Time of Use Electricity Plan?

A time of use (TOU) plan divides the 24-hour day into pricing tiers. The most common structure has two tiers: an off-peak rate, which is lower, and an on-peak rate, which is higher. Some plans add a third tier called a super-peak or critical-peak that activates on the hottest or coldest days of the year.

The logic follows the Texas grid's supply-and-demand reality. ERCOT, the grid operator for most of Texas, reports that system demand peaks between roughly 3 p.m. and 9 p.m. on summer weekdays (ERCOT Seasonal Assessment of Resource Adequacy, 2024). Generating and delivering power during those hours costs more. Retail providers pass that cost structure to customers through time-differentiated pricing.

A flat-rate plan, by contrast, charges the same price per kilowatt-hour regardless of when you use electricity. That simplicity is comfortable, but it means heavy daytime users subsidize lighter daytime users and vice versa.

When Is Electricity Cheapest in Texas?

On most TOU plans available in Texas, off-peak hours run from approximately 9 p.m. to 6 a.m. on weekdays, and all day on weekends and major holidays. Those hours reflect periods when wind generation is high and industrial demand is low.

On-peak hours, which carry the higher rate, typically cover the window from 3 p.m. to 9 p.m. on weekdays. Some providers extend that window to 2 p.m. or even noon during summer months.

The exact hours vary by provider and plan. Before enrolling, the customer should read the Electricity Facts Label (EFL), a standardized document required by the Public Utility Commission of Texas (PUCT) for every retail plan. The EFL states on-peak and off-peak windows in plain language, along with the rates that apply to each.

What the Rate Difference Actually Looks Like

As of mid-2025, the average Texas residential electricity rate sits near 13 to 14 cents per kilowatt-hour (kWh), according to U.S. Energy Information Administration data (EIA Electric Power Monthly, April 2025). TOU plans restructure that average rather than automatically beating it.

A representative TOU plan in the Dallas-Fort Worth area might charge:

  • Off-peak rate: 8 to 10 cents per kWh
  • On-peak rate: 18 to 22 cents per kWh

If a household uses 70 percent of its electricity during off-peak hours, the blended cost often comes out below the flat-rate market average. If that household uses only 50 percent off-peak, the blended cost may exceed a comparable flat-rate plan.

Providers currently offering TOU or time-differentiated plans in the Texas deregulated market include Gexa Energy, TXU Energy, Reliant (NRG), and Green Mountain Energy, among others. Plan names and structures change frequently, so the customer should verify current offerings on the PUCT's Power to Choose website (powertochoose.org), which lists every certified retail plan in the state.

The Appliances That Drive Peak Costs

Understanding which appliances consume the most electricity helps a household assess whether it can realistically shift usage. The largest loads in a typical Texas home are:

Air conditioning is the hardest to shift because comfort and safety depend on it. A household can pre-cool the home to 70 degrees before 3 p.m. and allow it to drift to 76 degrees by 8 p.m., but that requires a programmable or smart thermostat and some tolerance for afternoon warmth. Water heaters, dryers, dishwashers, and EV chargers are far easier to schedule for overnight hours.

Smart Meters and TOU Plans

Texas is one of the most advanced states for smart meter deployment. As of 2023, approximately 75 percent of Texas residential meters were smart meters capable of interval data recording (PUCT Smart Meter Texas program data). That infrastructure is what makes TOU billing possible at scale.

Smart Meter Texas (smartmetertexas.com) gives residential customers free access to their 15-minute interval usage data. Before switching to a TOU plan, a household can download several months of that data and identify what percentage of its usage already falls in off-peak hours. That analysis takes about 20 minutes and removes most of the guesswork.

When a TOU Plan Makes Sense

A time of use plan is worth serious consideration for households that meet at least two of the following conditions:

  1. The home has a smart thermostat that can be programmed to pre-cool before 3 p.m.
  2. The household charges an electric vehicle, and charging can be scheduled after 9 p.m.
  3. Most laundry and dishwashing happens in the evening after 9 p.m. or on weekends.
  4. Someone is home during the day and willing to run major appliances before the peak window opens.
  5. Smart Meter Texas data shows that 65 percent or more of current usage already falls outside peak hours.

When a TOU Plan Does Not Make Sense

TOU plans are not the right choice for every household. The following situations favor a flat-rate plan instead:

  • The household includes young children or elderly adults whose routines make afternoon electricity use non-negotiable.
  • The home lacks a programmable thermostat and the household is not ready to install one.
  • The household's Smart Meter Texas data shows heavy usage between 3 p.m. and 9 p.m. on weekdays.
  • The customer is in a month-to-month situation and does not want to track behavioral changes.

A TOU plan with poor behavioral fit will cost more than a flat-rate plan. The penalty for misjudging usage patterns is built directly into the on-peak rate.

Critical Peak Pricing: A Separate Consideration

Some Texas providers add a critical peak pricing (CPP) layer on top of a standard TOU structure. On CPP events, which typically occur on the hottest summer days or during winter weather emergencies, rates can reach 40 to 60 cents per kWh for a limited window, often four to six hours.

CPP plans can yield significant bill credits for customers who reduce usage during those events. They also carry real financial risk for customers who cannot or do not respond. A customer considering a CPP plan should read the EFL carefully to understand how many CPP events the provider can call per year and what the rate ceiling is.

How to Compare TOU Plans on Power to Choose

The PUCT's Power to Choose site allows users to filter by plan type. Selecting "time of use" or "tiered" under plan features narrows the list to relevant options. For each plan, the customer should:

  1. Open the Electricity Facts Label.
  2. Confirm the exact on-peak and off-peak hours.
  3. Note the on-peak and off-peak rates in cents per kWh.
  4. Check whether the plan includes a base charge, which affects cost at lower usage levels.
  5. Compare the contract length and early termination fee.

Running that comparison against the household's Smart Meter Texas data gives a reasonable estimate of what the plan would have cost over the past three to six months.

The Bottom Line

Time of use electricity plans reward households that can consistently shift consumption to overnight and weekend hours. The off-peak rates available in Texas, often 8 to 10 cents per kWh, are well below the statewide average and can produce meaningful savings for households with flexible schedules, smart thermostats, or electric vehicles. Households without that flexibility should choose a flat-rate plan instead. The data needed to make that decision, actual 15-minute interval usage from Smart Meter Texas, is free and available to every Texas customer with a smart meter.