Time-of-Use (TOU) Rates

Pricing a good or service according to its estimated cost during a particular time period. When schedules are announced in advance of billing, customers can adjust to the price signals. Electricity and telecommunications both have applied TOU rates to some customer categories, given the costs of metering and the cost of meeting peak load demand. Real-time pricing, in contrast, is based on actual (as opposed to forecast) costs, and these will fluctuate throughout a day (often due to weather sensitive demands) rather than only varying within a fixed schedule.