How to Pick a Time-of-Use Plan in Texas

Time-of-use electricity plans in Texas look simple: cheaper power at certain hours, pricier power when demand is high. The catch is that they only work if your real-life schedule matches the cheap window. If it doesn’t, a plan that looks clever on the listing page can turn into an expensive one.

The safest way to choose is to treat a TOU plan like a fit problem, not a rate-shopping problem.

Start with your usage pattern, not the advertised rate

A time-of-use plan charges different prices by hour. In Texas, that usually means high prices in the late afternoon or evening and lower prices overnight, with some plans adding a mid-peak tier in between. Typical peak windows often land around 1 p.m. to 7 p.m. or 2 p.m. to 8 p.m. on weekdays, while off-peak hours are commonly nights and weekends, though the exact schedule varies by provider and plan ¹.

What this means for you: don’t ask, “Is this a good free nights plan?” Ask, “How much of my electricity can I realistically move into the cheap window?”

A practical rule of thumb from Texas shopping guides: if more than half of your usage already falls in off-peak hours, free nights or weekends plans are more likely to work; below 40%, a fixed-rate plan is probably safer ².

Figure out whether your household can actually win on TOU

TOU plans tend to work best for homes that can shift major loads after 9 p.m. or onto weekends:

• EV charging overnight
• Pool pumps scheduled at night
• Laundry and dishwashing delayed until off-peak hours
• Thermostats programmed to avoid heavy afternoon cooling
• Homes that sit mostly empty during weekday peak hours

They tend to work poorly for households that are busiest during expensive hours:

• Work-from-home households running AC and electronics all afternoon
• Families with kids home in summer
• Homes that cook, cool, and do chores during late afternoon and evening
• Anyone who wants bill predictability more than optimization

One simple example shows the tradeoff. ElectricRates compares a flat 10¢ plan with a TOU plan charging 6¢ off-peak and 16¢ peak: a home using 70% off-peak would pay $90 for 1,000 kWh, but at 50% off-peak the bill rises to $110, and at 30% off-peak it jumps to $130 ³. Same home, same usage, very different outcome.

Read the EFL like a skeptic

In Texas, the Electricity Facts Label is where a TOU plan tells the truth.

Check these items before you sign:

• Exact peak, off-peak, and shoulder hours
• Average price at 500, 1000, and 2000 kWh
• Base charges or minimum-usage fees
• Early termination fee
• Whether the advertised rate excludes delivery charges

That last point matters a lot. General Texas plan guides note that the advertised energy rate can look about 5 to 6 cents per kWh lower because it excludes TDU delivery charges; the EFL’s average price at your usage level is the better comparison point ⁴.

Be especially careful with free nights and free weekends

“Free” is the most misunderstood word in Texas electricity.

According to Watt Owl’s review of 10 TOU plans in Oncor territory, most still charged TDU delivery during free hours, and only 4 out of 10 waived both energy and delivery charges. The same review found breakeven points ranging from 47% to 84% of usage in the free window ⁵.

That’s why two plans with the same “free nights” label can behave very differently. One may waive only the REP’s energy charge, while another waives both energy and delivery but makes daytime pricing much higher. Clear Energy Facts also warns that the standard 500/1000/2000-kWh advertised averages can be misleading for free-hours plans because those averages depend on assumed usage in the free window ⁶.

What to look for in the EFL:

• Are free hours truly $0, or do TDU fees still apply?
• How long is the free window?
• Does the free window start early enough to catch evening AC load?
• How painful is the paid-hours rate?

A simple way to choose

Use this checklist:

1. Pull your last 12 months of usage and note your high-usage summer months.
2. Estimate how much power you use during nights, weekends, or other off-peak windows.
3. Compare plans using the EFL’s average price at your actual usage level, not just the headline rate.
4. Reject any plan with fees, usage thresholds, or free-hour assumptions you don’t fully understand.
5. If you can’t shift a large chunk of usage, choose a straightforward flat-rate plan instead.

For most people, the best time-of-use plan is not the one with the flashiest promise. It’s the one whose hours line up with how your home already lives. If your heavy usage naturally lands overnight or on weekends, TOU can be a smart buy. If not, simplicity usually wins.