Time-of-Use Pricing for Illinois Commercial Accounts

Time-of-use and hourly electricity pricing can reward Illinois businesses that use power at the right times — and penalize those that can't shift. It is not inherently cheaper or riskier than a fixed rate; it's a different risk profile that fits some load shapes and not others.

How time-of-use pricing works

Instead of one flat energy price, time-of-use pricing charges more during defined peak periods and less off-peak; hourly pricing goes further, varying by the hour. The logic is simple: use power when it's cheaper and you save; use it when it's expensive and you pay more. The question is whether a facility's load can actually respond.

It helps to see the two structures as points on a spectrum of price certainty versus responsiveness. A flat fixed rate gives full certainty and rewards nothing for shifting load. A time-of-use rate trades some certainty for a predictable incentive: you know the peak and off-peak windows ahead of time and can plan around them. Hourly pricing trades away most of the certainty in exchange for the fullest incentive — the price follows the wholesale market hour by hour, so a facility that can move load toward the lowest-price hours captures the most, while one that cannot move load absorbs whatever the market does. Where a given account should sit on that spectrum depends entirely on how much of its load is genuinely movable and how much price risk its budget can carry.

Two facts about the incentive are worth keeping straight. First, the savings on a time-varying rate come from changing behavior, not from the rate itself — if nothing about when you use power changes, the rate simply re-prices the same consumption and can land higher or lower than a fixed rate by chance. Second, the risk is asymmetric for an inflexible load: the peak hours are exactly the hours such a facility cannot avoid, so it tends to buy the most power precisely when power is most expensive.

When it helps — and when it hurts

• Good fit: operations that already run largely off-peak, or that can genuinely shift load (some batch processing, pre-cooling, charging, or off-hours work).
• Poor fit: peak-heavy, inflexible load — daytime-concentrated operations that can't move usage will often pay more than under a fixed rate.

The deciding factor is the facility's hourly load shape, not a general rule.

Walking through two load shapes

Consider a refrigerated warehouse that runs compressors around the clock but can pre-cool during off-peak hours and coast through part of the peak. That flexibility is the raw material a time-varying rate rewards: the operation can deliberately pull load into cheaper hours and lighten it during expensive ones. Whether it actually comes out ahead still has to be tested against its own interval data, but the capacity to respond is there.

Now consider a daytime professional office whose load is driven by lighting, plug loads, and cooling during business hours. Its usage is concentrated in exactly the hours a peak window targets, and very little of it can move — the staff are present when they are present. On a time-varying rate this load tends to face the higher-priced hours with no lever to pull. For a shape like this, a fixed rate often removes a risk the facility cannot manage, which is worth more than a theoretical off-peak discount it can rarely reach. Neither example proves a rule; each shows why the same rate structure can be an opportunity for one facility and an exposure for another.

Common mistakes when evaluating time-of-use

• Judging by the average price. A low average can hide a punishing peak that an inflexible load hits every day. The distribution across hours matters more than the average.
• Assuming flexibility that operations won't deliver. Load is only shiftable if the business will actually shift it. A theoretical ability to move production that never happens in practice produces no savings.
• Modeling from monthly bills. Monthly totals cannot show the hourly shape a time-varying rate acts on. Interval data is required, not optional.
• Forgetting the demand and capacity interaction. On demand-billed accounts, changing when load runs can also move peak kW and, in the ComEd/PJM zone, the capacity tag — effects that live outside the energy price and should be modeled alongside it.

Interval data is the prerequisite

You cannot evaluate time-of-use suitability from monthly bills. You need interval data to see how much load sits in peak vs. off-peak hours and whether any of it is shiftable. Reconcile the interval data to billed usage first, then model the load against the pricing periods.

A practical way to work through it:

1. Pull a full year of interval data so seasonal patterns — summer cooling, winter operations — are captured, not just one month.
2. Reconcile it to billed usage to confirm the interval file is complete and matches what the utility billed.
3. Sort the load into the rate's time windows — how much energy falls in peak hours versus off-peak — to see where the consumption actually sits.
4. Separate movable load from fixed load. Of the peak-hour usage, how much could realistically shift, and what would it cost operationally to shift it?
5. Model the load against the pricing periods, including a stress case for high-price hours, before comparing the result to a fixed-rate alternative.

This sequence turns a suitability question from a guess into a defensible read of the account's own behavior.

Related considerations

Time-of-use overlaps with demand charges and capacity: shifting load off-peak can also reduce peak demand and, in the ComEd/PJM zone, potentially the capacity tag. ComEd's Hourly Pricing FAQ is an official reference for the concepts; program eligibility and suitability must be evaluated separately for the account.

Sources

• ComEd — Hourly Pricing FAQ
• Illinois Commerce Commission — Electric Choice Basics

Time-of-use pricing does not guarantee savings; it is a load-shape decision to evaluate for a specific account.