SDG&E Time-of-Use Rates Explained: Why Your Bill Spikes After 4 PM

Your Bill Doesn't Spike Because You Use More Power — It Spikes Because of When You Use It

If you've looked at your SDG&E bill and wondered why it's so high even when you feel like you're being careful with usage, the answer might be hiding in the clock.

Since 2019, SDG&E has been moving residential customers onto Time-of-Use (TOU) rate plans. These plans charge different rates depending on when you use electricity — not just how much. And the most expensive hours happen to be the hours when most people are home and using the most power.

The result? You can use the same total kWh as your neighbor and pay dramatically more if your usage clusters between 4 and 9 PM.

TL;DR

• TOU plans charge more per kWh during peak hours (4-9 PM every day)
• TOU-DR1 has 3 pricing tiers (on-peak, off-peak, super off-peak); weekday vs. weekend rates differ
• TOU-DR2 has 2 pricing tiers (on-peak, off-peak); same rates every day
• Summer on-peak rates are typically 2-3x the off-peak rate
• Solar + PPA locks in a flat rate that doesn't spike after 4 PM

What Is Time-of-Use Pricing?

Under a Time-of-Use plan, SDG&E divides the day into pricing periods. The per-kWh rate you pay depends on which period your electricity falls in:

The idea is to encourage customers to shift electricity usage to times when demand on the grid is lower. In practice, it means families who cook dinner, run the AC, and charge devices between 4 and 9 PM pay significantly more per kWh than those who can shift usage to other times.

SDG&E's TOU Plans: TOU-DR1 vs. TOU-DR2

Most SDG&E residential customers are on one of two default TOU plans. Here's how they compare:

TOU-DR1: Three Tiers, Weekend Discounts

TOU-DR1 is SDG&E's standard time-of-use plan with three pricing periods:

Winter hours (Nov 1–May 31) shift slightly; super off-peak expands on weekends. Check SDG&E's current tariff for exact times.

Key features of TOU-DR1:

• Three pricing tiers — on-peak, off-peak, and super off-peak
• Different weekday vs. weekend rates — weekends and holidays have extended super off-peak hours
• No commitment required — you can switch plans anytime
• One-year no-risk guarantee — if you pay more on TOU-DR1 than you would have on the tiered plan, SDG&E credits the difference (not available for solar customers)

TOU-DR2: Two Tiers, Simple Structure

TOU-DR2 simplifies things with just two pricing periods:

Key features of TOU-DR2:

• Two pricing tiers only — on-peak and off-peak (no super off-peak)
• Same rates every day — no weekday vs. weekend distinction
• No commitment required — you can switch anytime
• One-year no-risk guarantee — same deal as TOU-DR1, also not available for solar customers

How Much Do Peak Rates Actually Cost?

Here's where it gets real. Based on SDG&E's effective tariffs (Schedule TOU-DR1 and TOU-DR2, effective 2025-2026), the difference between peak and off-peak rates is dramatic:

Rates shown are approximate total rates including all charges (generation, distribution, transmission, public purpose programs, etc.) based on SDG&E's published tariff tables. Actual rates vary by CCA status and change periodically. Always verify current rates on SDG&E's pricing page.

Notice the pattern: summer on-peak rates are roughly 2x the off-peak rate and nearly 2x the super off-peak rate. If you're running your AC, cooking dinner, and charging devices between 4 and 9 PM — as most households do — you're paying top dollar for a big chunk of your monthly usage.

Why Your Bill Spikes After 4 PM

Most San Diego households use the most electricity during these peak hours:

• 4-6 PM: Kids home from school, AC cranking, TVs and devices on
• 5-7 PM: Cooking dinner (oven, stovetop, microwave), dishwasher, laundry
• 6-9 PM: Evening entertainment, device charging, AC still running

This isn't a coincidence — SDG&E set these as peak hours precisely because that's when demand is highest. But the result is that you're paying the highest rate during the hours you can least avoid using electricity.

For a household using 600 kWh/month with 40% falling in peak hours, the difference between peak and off-peak rates alone can add $50-$100+ to your bill compared with someone whose usage is shifted to off-peak times.

Winter vs. Summer: Do Peak Rates Matter Year-Round?

Yes — but the impact is smaller in winter.

SDG&E defines summer as June 1 through October 31 and winter as November 1 through May 31. Peak hours (4-9 PM) remain the same year-round, but the rate differential between peak and off-peak is much larger during summer months when demand is driven by air conditioning.

In winter, the gap between peak and off-peak narrows, but on-peak rates are still meaningfully higher than off-peak. For households with electric heating or EVs charging in the evening, winter peak usage can still be substantial.

Can You Just Shift Your Usage to Off-Peak Hours?

SDG&E and energy advisors often suggest "load shifting" — moving heavy electricity usage to off-peak hours. In theory, this works:

• Run dishwasher and laundry before 4 PM or after 9 PM
• Charge your EV overnight (super off-peak on TOU-DR1)
• Pre-cool your home during the afternoon so the AC works less during peak hours

In practice? Most families can't shift cooking dinner to midnight. You run the AC when it's hot. You charge devices when you're home. The 4-9 PM window is peak because that's when life happens.

Load shifting can help at the margins — and if you have an EV, overnight charging on super off-peak is a real opportunity. But for most households, the biggest electricity draws (AC, cooking, entertainment) happen during peak hours because that's when people are home.

How Solar + PPA Locks in a Flat Rate

Here's where solar changes the equation. With a solar PPA, you pay a fixed rate per kWh for the electricity your system produces — typically around $0.18-$0.22/kWh. That rate doesn't change based on the time of day.

Compare that to SDG&E's peak rates:

Every kWh you self-consume from solar instead of buying from SDG&E during peak hours saves you $0.25-$0.37/kWh — that's roughly 50-65% savings on peak-hour electricity.

And with battery storage, you can store excess daytime solar production and use it during the 4-9 PM peak window, avoiding SDG&E's highest rates entirely.

The math is straightforward: Solar + PPA gives you a predictable, flat rate that doesn't spike after 4 PM. SDG&E's rate structure is designed to penalize peak-hour usage. Solar is designed to offset it.

Key Takeaways

Related Reading

• Why Are SDG&E Bills So High in San Diego? — Full breakdown of SDG&E's rate structure, tiered pricing, and what's driving costs up
• PPA vs Buying vs Leasing Solar in San Diego — Compare financing options and find what works for your situation
• SDG&E Tiered Rates vs. Time-of-Use: Which Plan Is Actually Cheaper? — Side-by-side comparison of SDG&E's rate plans

Ready to Stop Paying Peak Rates?

You can't change when SDG&E charges the most. But you can change where your electricity comes from during those hours.

Lock in a flat rate that doesn't spike after 4 PM. Get your free consultation →

Call or text: (619) 396-7530

Sources

1. SDG&E Residential Pricing Plans — TOU-DR1 and TOU-DR2: https://www.sdge.com/residential/pricing-plans

2. SDG&E Schedule TOU-DR1 Total Rates Table (effective 1/1/2026): SDG&E TOU-DR1 Tariff

3. SDG&E Schedule TOU-DR2 Total Rates Table: SDG&E TOU-DR2 Tariff

4. EnergySage — SDG&E Time-of-Use Rates Guide: https://www.energysage.com/electricity/sdge-tou-rates/

5. SDG&E AB3264 Electric Residential Average Rate Breakout (1/1/2026): SDG&E AB3264 Rate Breakout

Free Solar Consultations helps San Diego homeowners understand their options and connect with trusted solar providers. We serve the entire SDG&E service territory. Call (619) 396-7530 or book your free consultation online.