Sometimes, the electric grid is put under a lot of stress. Extremely high demand during peak periods — before people leave for work and again when they get home — can put additional stress on the grid, potentially exceeding its generating capacity.

To prevent this, many energy companies have introduced time-of-use rate plans, which charge customers based on when electricity is used. Understanding these rate plans is the key to reducing energy use during peak times and saving money.

With standard rate plans, you pay the same for each kilowatt of energy used — regardless of when you use it. But time-of-use rates can differ by time of day, day of the week, season and more. And energy companies may have multiple time-of-use rate plans to choose from.

Many time-of-use plans break rates into groups: peak, mid-peak and off-peak. You’ll be charged the highest rate for electricity used during peak times, and electricity will be the cheapest during off-peak times. That means it’ll be less expensive to use appliances and electronics late at night than during the day.

By utilizing these pricing plans and adjusting your energy habits to match, you can save money on energy bills and reduce stress on the electric grid.