We have a similar system here in the U.K. with the "Economy 7" tariff which gives cheap power at night, except that it doesn't use a separate pilot wire for the contactor.
Traditionally, we have a timeclock installed alongside the meter which (a) energizes the contactor for water/space heating and (b) switches the meter to the low rate. Increasingly though, the timeclock is being replaced by a radioteleswitch which serves the same purpose but is activated by way of an R.F. signal sent at the appropriate times.
Cheap rate is usually midnight - 7 a.m. in winter, 1 a.m. - 8 a.m. in summer (hence "Economy 7" - 7 hours of cheap-rate power).
