Time-of-Use Electricity Pricing for Ohio Businesses
The short answer
Time-of-use (TOU) pricing charges different generation prices for different hours — typically a higher on-peak price on weekday afternoons and a lower off-peak price at night and on weekends. In Ohio, the utilities' default prices for small businesses are mostly flat per kWh, so TOU usually comes from a competitive supplier's product or from index (hourly) pricing for larger accounts. It pays off only if you can move meaningful load out of the expensive hours.
TOU, hourly pricing and demand charges compared
| Product | How price varies | Who it suits |
|---|---|---|
| Flat fixed price | One ¢/kWh for all hours | Anyone needing budget certainty |
| Time-of-use fixed price | Fixed prices for on-peak and off-peak periods | Sites with night shifts, schedulable charging, or storage |
| Index / real-time pricing | Follows PJM hourly market prices plus an adder | Larger, flexible loads with good controls |
| Demand charge (delivery) | Per kW of monthly peak | Not a product — billed by your utility regardless |
TOU affects the energy price; demand charges affect peak kW. A business can save on one and lose on the other — for example, shifting all production to midnight but starting every machine at once.
A five-minute test: can you benefit?
- Check your interval data. What share of your kWh falls between noon and 8 p.m. on weekdays? If it's small already (a bakery with night shifts, a warehouse with overnight charging), a TOU product may reward what you already do.
- List what can move. Pre-cooling, charging, pumping, batch processes and water heating are often movable; restaurant meal rushes and hospital comfort loads are not.
- Estimate the spread. Ask suppliers for both a flat price and a TOU price for your exact usage. If the TOU savings on your current shape are small, moving load has to do the work.
- Watch capacity. In 2026, capacity costs are high ($329.17/MW-day for June 2026–May 2027). A product that passes capacity through at cost can reward cutting load during PJM's summer peak hours even more than TOU energy spreads do.
- Compare after fees. Put broker compensation and any pass-through charges on the same line for every product.
Who typically benefits in Ohio
- Cold storage and food processing that can pre-cool before afternoon peaks.
- Fleets and dealerships charging EVs overnight.
- Manufacturers with a second or third shift.
- Buildings with thermal or battery storage.
Offices, restaurants, schools and retail with fixed daytime hours usually do better on a flat fixed price.
FAQ
Do Ohio utilities offer time-of-use rates for businesses?
The default generation prices for small businesses are largely flat per kWh; time-varying prices are mainly available through competitive suppliers and index-based products for larger customers. Check your utility's tariff for any optional schedules.
Is time-of-use the same as a demand charge?
No. TOU changes the price per kWh by hour; a demand charge bills your peak kW for the month.
What hours are "on-peak" in Ohio?
It depends on the product. Supplier TOU products commonly define weekday daytime or afternoon hours as on-peak; read the product's definitions before comparing.
Is hourly (index) pricing risky?
It can be. PJM hourly prices spike during heat waves and cold snaps. Index products work best with controls that respond to prices and a written risk policy — see energy risk policy.