How to Choose an Electricity Rate Plan

Most people are on whatever plan they were assigned the day service started. Switching is free, takes one phone call, and for a lot of households is worth several hundred dollars a year.

Your rate plan is probably the highest-value thing on your bill you've never examined. Switching is free. It takes one phone call or a few clicks. And for a meaningful share of households it's worth several hundred dollars a year.

The catch is that the right plan depends on when you use electricity, not how much — and almost nobody knows their own timing well enough to guess.

The plan types

Tiered. You pay one rate up to an allowance, then a higher rate above it. Time of day is irrelevant. Once common everywhere, now increasingly the non-default option.

Time-of-use (TOU). The rate changes by hour. Peak hours — typically 4–9pm — cost substantially more; overnight and midday cost less. Now the default for most California residential customers.

Tiered + TOU. Both mechanisms at once: rates vary by time *and* step up past an allowance.

EV plans. A TOU variant with a very cheap overnight window and, usually, a steeper peak. Built for charging a car at 1am.

Which suits which household

The question is what share of your usage lands in the peak window.

TOU tends to win when the house is empty during the day, big loads are easy to move (laundry, dishwasher, pool pump, EV), you can pre-cool before 4pm, or you have solar and a battery to carry the evening.

Tiered tends to win when someone is home all day, you have high afternoon cooling load you can't shift, medical equipment runs on a fixed schedule, or the household is simply busiest between 4pm and 9pm and can't change that.

Note what's absent from both lists: total usage. A household using 2,000 kWh a month can be better off on TOU than one using 500 kWh, if the timing is right. Volume determines your bill; timing determines your plan.

Comparing properly

There are three ways to do this, in increasing order of reliability.

Guess from habits. Free, quick, and wrong often enough to matter. People systematically underestimate their evening usage, because the loads that run then — cooking, cooling, lighting, TVs, the car plugged in on arrival — are exactly the ones that feel small individually.

Ask your utility. This is the underused one. Most utilities will run a rate comparison against your actual last 12 months, and many show it in your online account under a "rate plan comparison" or "which plan is best" tool. It's their own data and their own tariffs, so it's authoritative. Ask for it.

Price your interval data yourself. Take a year of Green Button data and price it against each tariff. This is what a proper audit does, and it has the advantage of also showing you *why* — which hours are costing you, and what shifting them would be worth.

Two things people get wrong

Comparing a modeled number against a real one. The rate printed on a tariff sheet is not what you pay. Your actual bill includes delivery charges, minimum charges, taxes, and any discounts. Comparing your real bill against a modeled alternative priced on raw tariff rates makes the alternative look artificially cheap — and sends people to worse plans. Both sides of the comparison have to be built the same way.

Assuming the switch is permanent. It isn't. Most utilities let you change plans and many offer bill protection for the first year on a new TOU plan: if you'd have paid less on the old plan, they credit the difference. That caps the downside at roughly zero, which changes the calculus entirely. Ask whether it applies to you.

What switching actually involves

Call your utility, or find the rate plan section of your online account. The change usually takes effect at your next billing cycle. There's no fee, no technician visit, and no equipment change — it's a billing configuration.

The one restriction worth knowing: utilities typically limit how often you can switch, often to once a year. So it's worth doing the comparison properly rather than flipping back and forth.

Then fix the timing

If you land on TOU, the plan itself is only half the win. The other half is actually moving load out of the peak window — which costs nothing and, for an evening-heavy household, is usually worth more than the plan change was.

See how your usage prices on each plan →

Frequently asked questions

Is time-of-use always cheaper?

No. TOU rewards households that can keep usage out of the late-afternoon and evening peak. A household with someone home all day running air conditioning through the afternoon can pay meaningfully more on TOU than on a tiered plan.

Can I switch back if a new rate plan is worse?

Generally yes, though utilities usually limit switching to about once a year. Many also offer bill protection on a first year of TOU, crediting the difference if you would have paid less on your old plan — worth asking about before you switch.

How do I know which rate plan I'm on?

It's printed on your bill, usually near the top of the charges section as a schedule code like E-TOU-C, TOU-D-4-9, or E-1. Your online account shows it too, typically under account or service details.