At 2 PM on a weekday in Ontario, commercial electricity costs more than three times what it costs at 2 AM. Yet most Canadian businesses consume energy identically across all hours—running equipment when convenient rather than when rates are lowest. Time-of-use (TOU) energy management changes that equation by deliberately shifting flexible loads to off-peak periods where electricity is cheapest.
For facility managers, operations teams, and CFOs at commercial and industrial businesses across Canada, TOU management represents one of the lowest-capital, highest-impact strategies in the energy cost toolkit. This guide explains how TOU pricing works in a commercial context, provincial rate structures, a five-step implementation framework, and how to quantify savings before making operational changes.
Table of Contents
What Is Time-of-Use Pricing in a Commercial Context?
Time-of-use pricing charges different rates for electricity depending on when it is consumed. Utilities design TOU structures to reflect the cost of generating and delivering power at different times—electricity is most expensive when grid demand is highest (typically weekday afternoons) and cheapest when demand is lowest (overnight and weekends).
For commercial customers, TOU rates apply to the energy charge component of the bill (per kWh). Most commercial accounts also face demand charges (per kW peak)—which are calculated independently of TOU periods. Effective TOU management reduces energy charges by shifting consumption to lower-rate periods; demand charge reduction requires separate strategies when load shifting also lowers peak kW.
Unlike residential TOU—which affects primarily when you run appliances—commercial TOU management involves coordinating production schedules, HVAC operations, fleet charging, and building systems across an organization.
The spread between on-peak and off-peak rates in Ontario can exceed 2–3x. Every kilowatt-hour shifted from on-peak to off-peak delivers immediate, measurable savings without capital investment.
TOU Rate Structures in Major Canadian Provinces
Ontario
Ontario commercial customers on TOU pricing face three periods (May 1–October 31 summer schedule):
- On-peak — Weekdays 11 AM–5 PM (highest rate, approximately $0.161/kWh)
- Mid-peak — Weekdays 7 AM–11 AM and 5 PM–7 PM (moderate rate, approximately $0.122/kWh)
- Off-peak — Weekends and holidays all day; weekdays 7 PM–7 AM (lowest rate, approximately $0.082/kWh)
Ontario also offers an ultra-low overnight (ULO) rate option with pricing as low as $0.028/kWh from 11 PM–7 AM daily, offset by higher on-peak rates during daytime hours. ULO benefits facilities that can shift substantial load overnight. See our detailed guide on Ontario electricity rates: TOU vs. tiered.
BC Hydro
BC Hydro applies seasonal time-differentiated rates for medium and large commercial customers. Summer rates reflect higher cooling demand; winter structures differ. Rate differentials are generally smaller than Ontario but still reward off-peak consumption.
Alberta
Alberta's deregulated market effectively creates real-time TOU pricing. Commercial customers on floating rates or index-based contracts face hourly price variation driven by supply and demand. Large consumers can contract fixed rates but miss arbitrage opportunities available to those actively managing load against market prices.
Other Provinces
Quebec (Hydro-Québec), Manitoba (Manitoba Hydro), and Saskatchewan offer predominantly flat-rate commercial pricing with limited TOU options, though large industrial customers may access time-differentiated rates. Nova Scotia Power and other Atlantic utilities are gradually introducing time-varying rate options.
Commercial facilities that actively manage TOU load profiles reduce energy charges by 10–25%—often with programming changes alone and zero capital investment.
The Business Opportunity
The financial opportunity depends on two factors: the rate spread between peak and off-peak periods, and the volume of shiftable load in your facility.
In Ontario, shifting 10,000 kWh monthly from on-peak ($0.161/kWh) to off-peak ($0.082/kWh) saves approximately $790 per month—$9,480 annually. A facility consuming 50,000 kWh monthly with 30% shiftable load could save $15,000–$25,000 annually through systematic TOU management.
The opportunity is largest for facilities with:
- Significant overnight or weekend operations capability
- EV fleet or material handling equipment charging
- Batch manufacturing or processing schedules
- HVAC systems that can pre-condition during off-peak hours
- Compressed air, refrigeration, or thermal storage systems
Step 1: Audit Your Load Profile
Before shifting anything, understand when you currently use energy and how consumption maps to rate periods. Request interval data from your utility or use an energy management platform to visualize kWh by hour and by TOU period.
Key questions to answer:
- What percentage of monthly kWh falls in on-peak, mid-peak, and off-peak periods?
- Which hours drive the highest consumption—and why?
- Are there consumption spikes during on-peak hours that could be rescheduled?
- How does your load profile change seasonally?
Our guide on real-time energy monitoring in Canada explains how to establish the interval-level visibility required for TOU analysis.
Pro Tip
Overlay your hourly consumption chart with TOU period boundaries. Peaks during on-peak hours are your highest-priority shift targets—the rate differential makes every shifted kWh worth two to three times an off-peak kWh saved through efficiency alone.
Step 2: Identify Shiftable vs. Non-Shiftable Loads
Shiftable Loads
- EV and forklift charging — Schedule overnight or off-peak charging sessions
- HVAC pre-cooling/pre-heating — Condition the building before on-peak hours begin
- Compressed air storage — Run compressors off-peak to fill storage tanks for daytime use
- Refrigeration cycling — Pre-cool cold storage during off-peak; allow temperature drift during on-peak
- Scheduled manufacturing processes — Batch production, mixing, curing, and drying cycles
- Dishwashing and laundry — Hotels, restaurants, and healthcare facilities with flexible cleaning schedules
- Water heating and ice making — Thermal storage strategies for food service and hospitality
Non-Shiftable Loads
- Patient care and healthcare operations — 24/7 clinical requirements
- Continuous manufacturing processes — Real-time production lines without batch capability
- Customer-facing operations — Retail, dining, and service hours driven by customer demand
- Critical IT and data centre loads — Server operations with uptime requirements
- Safety and security systems — Life safety equipment and security infrastructure
Be honest about what can move. Overestimating shiftable load leads to unrealistic savings projections and failed TOU programs.
Steps 3–5: Quantify, Schedule, and Automate
Step 3: Quantify Savings Potential
Use this formula for each shiftable load category:
Monthly savings = shiftable kWh × (on-peak rate − off-peak rate)
Example: 8,000 kWh of EV charging shifted from on-peak ($0.161) to off-peak ($0.082) = 8,000 × ($0.161 − $0.082) = $632/month.
Sum savings across all shiftable categories for total TOU optimization potential. Energy Wiz supports flat, tiered, and TOU rate structures in its Intelligence Hub cost simulation—modelling savings before operational changes are implemented.
Step 4: Schedule Operational Changes
Translate analysis into action:
- Program BAS schedules for HVAC pre-cooling starting at 5 AM (off-peak) rather than 7 AM (mid-peak)
- Set EV charger timers to begin at 11 PM
- Reschedule batch processes to overnight shifts where staffing permits
- Configure compressed air systems to charge storage tanks between 11 PM and 7 AM
Step 5: Automate Where Possible
Manual TOU compliance degrades over time. Automate through smart thermostats, scheduled equipment controllers, BAS integration, and charger management systems. Automated load shifting maintains savings without relying on staff remembering to flip switches.
Track TOU performance using energy management tools. Our energy management systems guide and Energy Wiz analytics break down consumption and cost by TOU period automatically.
TOU and Demand Charges: The Interaction
Shifting load to off-peak hours reduces energy charges but does not automatically reduce demand charges. Demand is billed based on your highest 15-minute kW interval regardless of when it occurs.
However, coordinated TOU and demand strategies can address both simultaneously:
- HVAC pre-cooling overnight — Reduces on-peak energy charges AND prevents simultaneous chiller start-up during morning ramp-up that sets demand peaks
- Staggered off-peak charging — Lowers energy costs while preventing charging-related demand spikes during daytime hours
- Compressed air off-peak fill — Shifts compressor energy to off-peak and eliminates daytime compressor cycling that contributes to demand peaks
For demand-specific strategies, see our guides on peak demand charges and demand charge management.
Employee and Operational Considerations
TOU strategies requiring staff schedule changes need careful planning. Review union agreements before modifying shift patterns. Communicate changes to operations teams with clear rationale—savings targets tied to measurable KPIs drive compliance better than mandates alone. Customer-facing businesses must balance TOU savings against service quality; pre-cooling an office building overnight has no customer impact, but shifting retail HVAC setbacks might.
Case Walkthrough: Office Building TOU Optimization
Consider a 35,000-square-foot office building in Mississauga, Ontario on standard TOU pricing:
- Monthly consumption: 55,000 kWh
- Current on-peak share: 38% (20,900 kWh at $0.161/kWh = $3,365)
- Off-peak share: 42% (23,100 kWh at $0.082/kWh = $1,894)
- Mid-peak share: 20% (11,000 kWh at $0.122/kWh = $1,342)
TOU optimization plan:
- HVAC pre-cooling from 5–7 AM (off-peak): shifts 4,500 kWh from on-peak → saves $356/month
- EV charger scheduling (2 chargers, 7 kW each, overnight): shifts 3,000 kWh → saves $237/month
- After-hours cleaning equipment (vacuum, floor scrubber) moved to off-peak: shifts 800 kWh → saves $63/month
Total projected savings: $656/month ($7,872/year) — 12% reduction in energy charges
Implementation cost: BAS schedule reprogramming and smart charger timers—under $2,000. Payback: less than 3 months.
Typical Shiftable Loads by Facility Type
| Facility Type | Primary Shiftable Loads | Estimated Shiftable % | TOU Savings Potential |
|---|---|---|---|
| Office building | HVAC pre-conditioning, EV charging, after-hours cleaning | 15–25% | 10–18% energy charge reduction |
| Retail | Refrigeration cycling, overnight stocking equipment, EV delivery charging | 10–20% | 8–15% |
| Industrial/manufacturing | Batch processes, compressed air, furnace scheduling, material handling charging | 20–35% | 12–25% |
| Food service | Ice making, dishwashing, prep equipment, walk-in pre-cooling | 15–30% | 10–20% |
| Hotel/hospitality | Laundry, kitchen prep, pool heating, EV valet charging | 15–25% | 10–18% |
| Warehouse/logistics | Material handling charging, conveyor scheduling, climate control | 20–30% | 12–22% |
Frequently Asked Questions
Common questions about TOU energy management in Canada
Savings depend on your load profile and rate differential. Facilities with significant shiftable loads—EV charging, batch processes, HVAC pre-conditioning—can reduce energy charges by 10–25%. The on-peak to off-peak spread in Ontario can exceed 2–3x, meaning each shifted kWh saves substantially. Combined with demand management, total bill reductions of 15–30% are achievable.
Not automatically. TOU rates and demand charges are independent. Shifting load reduces energy charges when moved from high-rate to low-rate periods. Demand charges only decrease if the shift also lowers your highest 15-minute kW interval—for example, by pre-cooling overnight instead of running chillers simultaneously during morning ramp-up.
Commercial accounts typically face higher absolute consumption, separate demand charges, and more complex rate structures including tiered options and Class A/B distinctions in Ontario. Commercial facilities also have more shiftable loads—production scheduling, fleet charging, HVAC pre-conditioning—that residential customers lack.
Analyze interval data to quantify kWh consumed during each rate period. Identify shiftable loads and estimate how many kWh can move from on-peak to off-peak. Multiply by the rate differential: savings = shiftable kWh × (on-peak rate − off-peak rate). Energy management platforms with TOU cost simulation automate this calculation using your actual rate schedule.
ULO is an optional Ontario rate with very low overnight pricing (11 PM–7 AM daily) and higher on-peak rates during daytime hours. It benefits businesses that can shift substantial load to overnight periods—EV fleet charging, ice making, water heating, batch processing, and HVAC pre-conditioning. Facilities with inflexible daytime operations may pay more under ULO.
Collective agreements may restrict shift scheduling, overtime, and operational hour changes. Review union contracts before implementing load-shifting that requires staff schedule modifications. Many TOU strategies—automated HVAC pre-cooling, timed equipment cycles, overnight charging—require no staff schedule changes and face no union constraints.
Conclusion
Time-of-use energy management turns rate structure into a strategic advantage. By auditing your load profile, identifying shiftable loads, quantifying savings, scheduling operational changes, and automating compliance, Canadian commercial businesses can reduce energy charges by 10–25%—often with minimal capital investment.
Combine TOU optimization with demand management and broader energy cost management strategies for maximum impact. Energy Wiz helps teams track TOU performance, simulate savings scenarios, and monitor load profiles from mobile devices. Get started with Energy Wiz or reach out at info@energywiz.ca.
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