How Changes to the PCIA Charge May Affect Electricity Bills

California is a leader in clean energy. In 2023, 67% of the state's electricity delivered to customers came from renewable and zero-carbon sources. This includes hydroelectric, solar and wind power.

Electric customers play a role in this progress. Their payments help fund renewable energy investments. These include costly early investments that PG&E made to help move California’s electricity supply toward cleaner energy sources.

After PG&E made these important early and long-term investments, some customers left PG&E to be served by other companies like Community Choice Aggregators (CCAs) and Direct Access (DA) providers.

This is where the Power Charge Indifference Adjustment, or PCIA, comes in. The PCIA makes sure everyone pays their fair share for the energy bought on their behalf. It prevents costs from being unfairly moved from one group of customers to another. 

Since customers can switch from PG&E to CCA or DA providers at different times, the PCIA makes sure all residential and business customers pay for their fair share of the energy investments made for them, like multi-year investments in clean energy projects, before they switched.

Imagine five friends out for dinner order several courses. As the meal goes on, two friends leave after the appetizer and another two leave after the main course — so only one friend is left when it's time to pay the bill. It wouldn’t be fair if the last friend had to pay for everything. The PCIA works in a similar way for energy costs. 

The California Public Utilities Commission (CPUC) is required to make sure all customers pay their fair share for energy investments. Whether customers get electricity from a utility like PG&E, or from other companies. The costs of these investments should not be unfairly passed on to customers who stay with the utility.

Why the PCIA changed this year

Calculating the PCIA is complex. PG&E rates cover the costs of electricity contracts and energy resources that the CPUC approved and that PG&E purchased for customers before they switched providers. The PCIA collects any costs that are higher than the current market value of those contracts, which is the cost minus the remaining value.  

In 2025, the CPUC found issues with how part of the PCIA was calculated. The CPUC  found that the formula  was “flawed and vulnerable to manipulation.” As a result,  the market value of energy and reliability contracts in 2025 was lower than expected. The forecasted value for 2026 also was lower than previous years. 

Because of the flawed formula, PG&E didn’t collect enough money in 2025 to cover the costs for resources bought for customers who switched to other providers. This meant customers who stayed with PG&E paid more than they should have, while others paid less. The CPUC made changes to the formula for 2026, and as a result the PCIA increased to fix this imbalance going forward.

How the PCIA update impacts electric bills

The PCIA is only one portion of the overall electric bill for both PG&E and other service provider customers. Bills also include generation (energy supply), delivery (operating, upgrading and maintaining the grid), and costs like programs that support low-income discounts. 

PG&E lowered its residential electricity rates by 5% on Jan. 1, 2026, for customers who get both energy supply and delivery from PG&E. This decrease was due to lower costs for energy generation costs and other bill changes. This helped offset higher delivery and PCIA costs. 

For most residential electricity customers who switched to a CCA or DA provider, the 2026 PCIA rates are higher than last year. This is because of the PCIA changes, but PCIA rates are still similar to rate levels from earlier in the decade. 

PG&E does not set the generation rates of CCA and DA providers. If these providers offer lower generation rates in 2026 compared to 2025, it could help offset increases to PG&E delivery and PCIA charges, potentially resulting in an overall rate decrease. 

CCA and DA customers can contact their CCA or DA provider for more information on how their generation rate may change.