Normally, electrical utilities charge you simply for the amount of power you use. But in real life, things aren't that simple. These utilities have to provide power when people want to use it. So they have to be able to provide the peak in energy usage even though those peaks are hardly ever reached. By taking advantage of TOU metering, you can possibly save money, reduce the peaks and help the environment.

When are those peaks? They are during the times that business are most active - weekdays during daylight hours.

TOU metering (Time Of Use) charges more for power during those peak times and less during off-peak times.

So if power is 10 cents per killowatt hour for flat metering and you use 1,000 killowatt hours per month, you will pay $100. But if off-peak power is 5 cents and on peak is 15 cents and you use 90% of your power during the off-peak times, you will only pay $60. At the same time, you will be motivated to move some of your excess power usage to off-peak times, benefiting the environment.

Check with your utility and be careful. In the above example, if you use only 25% of your energy on off-peak times, your bill will actually go up (in this case to 125)! Likewise, the rates sometimes make this a bad deal. For instance, one utility that I checked charges more like 8 cents off peak and 20 cents on-peak, which is biased towards the high end. In the original 90% off-peak example, even though you successfully use power off-peak, you would still raise your bill to $188 per month.

I hope to soon publish more information of real rates and strategies you can use to improve your off-peak vs. on-peak ratios.