Powering the future with smarter rates
June 5, 2025Summer intern Gus Sargent to develop time-based pricing model
As the demand for electricity continues to grow, utilities are looking for innovative ways to manage grid reliability, reduce peak demand, and encourage efficient energy use.
Heartland Energy hired operations intern Gus Sargent to explore how smarter electricity pricing can help customers, utilities and the grid all work better together.
Sargent will be developing a Time of Use (TOU) rate mechanism for our wholesale customers and their retail users. It’s a project that could influence how electricity is consumed and managed across our customer base for years to come.
What are Time of Use rates?
Time of Use (TOU) rates mean the price you pay for electricity changes depending on the time of day you use it.
Most end-use customers pay a flat rate for electricity, no matter the time of day. That rate is meant to cover a utility’s average cost to produce and deliver electricity across all hours.
But the true cost of electricity changes throughout the day.
Just like airline tickets or hotel rooms, electricity prices follow basic supply and demand. When a lot of people use electricity at the same time, the cost to supply it goes up. It also puts more pressure on the grid.
When demand is lower, such as late at night or early in the morning–the cost to produce it goes down.
TOU pricing reflects those changes by adjusting the rate based on the time of day. It gives customers a clearer picture of when electricity is more or less expensive.
Why do TOU rates matter?
As homes and devices get smarter, customers have more tools to manage their energy use. Smart thermostats, appliances and advanced meters can help people track and adjust their electricity consumption.
TOU pricing supports that shift.
“As customers become more aware of their energy use patterns and what energy prices are during different times, habits can change,” said Heartland Energy Chief Operations Officer Nate Jones.
By charging less during off-peak times, it encourages people to shift their usage patterns, which helps improve the efficiency of the grid.
It also allows for better utilization of renewable energy, which is often produced during off-peak hours, that may otherwise go to waste.
In addition, when fewer people use electricity during peak hours, utilities don’t need as much capacity to meet peak demand. That frees up resources and makes room for growth without driving up costs.
TOU rates can also help manage large loads like electric vehicle charging stations and data centers. If prices signal when electricity is cheaper, they can plan their usage accordingly.
“While smart meters and similar technology are still catching on in our region, the need for modern pricing tools is growing,” Jones added. “This project will prepare Heartland and our customers for the future with a clear and well-researched rate structure.”
Sargent excited to get started
Sargent is a junior at the University of Minnesota, majoring in electrical engineering with minors in astrophysics and mathematics. He plans to graduate in the spring of 2026.
In his free time, he enjoys singing, football, basketball, and snowboarding. He is a talented drummer and performs with Minnesota Brass Inc. as part of the indoor percussion ensemble.
At Heartland, he’ll work closely with operations, finance and customer relations staff to research and design a possible TOU rate structure.
“I am very excited to start my first internship,” Sargent said. “I’m looking forward to working with other engineers and gaining experience in the power industry.”
Heartland is excited to have Gus on the team and looks forward to the impact he’ll make this summer.