Time-of-Use, Fixed-Rate, and Variable-Rate Energy Plans

A Pulse power energy plan is what you need to help reduce your monthly gas and/or electric bill. There are various ways for you to choose the right home energy plan that best meets your needs. One of the choices available to you is a time-of-use, fixed-rate, or variable-rate plan. Which one is the best choice for you?

Well, it depends. We’ll explain when each type of plan is appropriate and when it might not be the right choice for you. Then, we’ll give some recommendations based on your specific needs to help determine which plan best suits you, your family, or business.

The three types of energy plans available in most areas are:

· Time-of-Use (TOU) – a plan that fluctuates the price of electricity over a period of time.

· Fixed Rate – a plan that charges a fixed rate for your total energy usage, regardless of price fluctuations.

· Variable rate – a plan that charges different rates for energy used at different times and may fluctuate on a daily basis.


TOU plans charge you more if electricity is in high demand and less when it’s not. The unit price of electricity will also vary over the course of a day (higher during peak hours and lower during off-peak hours), week (higher on weekdays and lower at night and weekends), and seasons of the year.

Here’s how it works:

· Peak periods – typically hot summer afternoons – when electricity demands for home cooling and other appliances run high. Electricity is more expensive during this time than during non-peak periods.

· Off-peak periods – typically early morning or late night – when electricity demands are lower. Electricity is less expensive during these hours than during peak times.

Fixed-Rate Plans

Under a fixed-rate plan, you pay the same unit rate for your total energy usage from month to month. The unit rate you pay will remain the same regardless of how often or how much energy you use. However, if energy prices rise during a fixed-rate plan period, your monthly bill for this type of plan could be higher than with a variable-rate or TOU plan. With a fixed-rate plan, you’ll know exactly how much your monthly bill will cost.

Variable-Rate Plans

Under this plan, you pay different unit rates depending on the time of day and day of week that you use energy. Rates may change daily, monthly, or seasonally. While rates during off-peak periods are lower than during on-peak periods, variable-rate plans typically have a mid-to-high-range unit rate for peak usage times as well.

So, which energy plan is best for you?

First of all, when you have the power to choose which energy plan is best for you, it’s important to know how much energy your household uses on an average day (or month). Usually, a home’s energy usage is reported as a monthly average. But, your bill will show the exact amount of kWh you used for that period.

First, find out your home’s kWh usage rate by taking a look at how much electricity you used during the most recent full billing cycle.

Once you know the kWh usage rate, use this chart to help determine which plan is best for you:

As you can see the answer is different depending on your household’s kWh usage rate. And, that’s why it’s important to find out which plan is best for you before you choose one.

If your household’s monthly average energy usage falls within the mid and high range (1,000 – 2,500 kWhs), a fixed-rate plan may be your best choice.

If your household’s monthly average falls within the low range (500 – 1,000 kWhs), a TOU or variable-rate plan with rates that change daily may be the best option for you.

If your household’s monthly average is less than 500 kWh, you could save even more with a TOU plan.

If you think your home’s monthly average is much less than 500 kWh, you might want to check to be sure your meter isn’t running fast. Remember, if it runs too fast, you could end up paying more money for energy than you would with a variable-rate plan that charges different rates depending on the time of day and season.

· Variable-rate plans are usually the best choice for homes that use 1,000 kWh or more each month.

· Fixed-rate plans are usually the best choice for homes that use less than 500 kHWs each month.

· TOU rates are usually the best choice for homes that use 500 kHWs or less each month.