What are peak season prices?

Peak pricing is a form of congestion pricing where customers pay an additional fee during periods of high demand. Peak pricing is most frequently implemented by utility companies, which charge higher rates during times of the year when demand is the highest.



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Many utility companies use Time-Of-Use rates to increase peak pricing when electricity is in high (peak) demand, helping to reduce the strain on the power grid. In turn, this incentivizes customers to use more electricity during periods of low demand (off-peak) when electricity prices are lower.

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We find that prices fall on average during seasonal demand peaks for a product, largely due to changes in retail margins. Retail margins for specific goods fall during peak demand periods for that good, even if these periods do not coincide with aggregate demand peaks for the retailer.

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While the price of electricity remains steady for standard electricity plans, utility companies are increasingly offering time-of-use plans, which charge more for electricity during peak hours but offer cheaper service during off-peak times -- which means you can actually save money by running appliances like your ...

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