Variable price is a price for a product or service that changes over time. Variable rate is a price for a given quantity of that product or service that change over time. In the energy industry, energy costs can change from minute to minute depending on market conditions. Variable pricing is used to insure that customer billings reflect the actual value of energy at the time it is consumed.

The two most common variable rates for billing end-use customers are time-of-use pricing, which averages out prices based on the time of day and day of the week in which energy is used during a billing period; and the much more accurate real-time pricing, which charges the customer based on the actual market value of energy used at any given time.

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