Learn what is changing and why

To make electric rates simpler for all customers, the California Public Utilities Commission (CPUC) voted on July 3, 2015 to adopt a series of changes to the residential rate structure. As a result, the way utilities charge for electricity is changing throughout California. The new structure is more closely aligned with the actual costs of providing electric service.

The previous multi-tier rate structure was established during the energy crisis in 2001, when energy was in limited supply, electricity prices were at record highs and issues with electric reliability were frequent occurrences. In addition, renewable energy wasn’t widely accessible and meters were read manually. Since then, things have changed. Progress has been made in nearly every sector of energy.

The Evolution of Energy


Renewable energy sources, such as wind, have become more widely adopted.


New technologies are making it easier to understand how we use energy, and use it more efficiently.


Buildings and the technologies that power them are being designed with energy in mind.


A smarter grid is making it easier to deliver energy.

The new structure began to take effect in 2015 and will continue to roll out through 2020. It is intended to be simpler, to be more closely aligned with the actual costs of providing electric service and to provide customers with a clearer understanding of how their energy use impacts their monthly bill.



Tier Price Adjustment

Minimum Bill Increase

New Time-of-Use Rate Options

FERA Monthly Fixed Discount

Tiers Consolidated from 4 to 3

Tier Price Adjustment

Minimum Bill Methodology Change

Tiers Consolidated from 3 to 2

High Usage Surcharge

Tier Price Adjustment

Tier Price Adjustment

Transition Most Residential Customers to Time-of-Use Rates

Changes in 2015

Changes to the Tiered rate plan

As of 2015, most customers were on a 4 tiered rate plan (E1). On this plan customers could save money by using less energy and staying out of the higher-priced tiers. Since the energy crisis in 2001, price increases were only allowed to be made to higher tiers (tier 3 and above), and the prices for tiers 1 and 2 remained stable. Over many years, this created a significant difference in the prices between the tiers. Our goal is to gradually reduce the number of tiers from four to two and narrow the differences in prices among the tiers by the end of 2018. The end result will be a pricing structure that is simpler, more easily understood and more closely aligned with the cost of providing electric service for all customers.

Learn more about Tiered Base Plan

Minimum bill

In September 2015, the monthly Minimum Bill Charge, which applies only to customers with very little or no energy use in a given month, was increased to $5 for customers enrolled in the California Alternative Rates for Energy (CARE) program and to $10 for all other residential customers whose monthly bill charge total is less than $10. Renewable energy customers are currently assessed the Minimum Bill Charge every month of the year. When the net annual True-up is calculated the customer may be refunded for all or part of the minimum charges paid, depending on how much energy is actually used. Learn more about how the monthly delivery charge is calculated for renewable energy customers.

Visit Minimum Bill Charges

Changes in 2016 and beyond

Simplifying existing rates

  • Reducing the number of tiers in the standard rate plan from 4 to 2 (reducing to three tiers in June 2016 and to two tiers in 2017).

Tier Collapse

Tier Collapse chart: 4 tiers in 2015; 3 tiers in 2016; 2 tiers + surcharge in 2017

PLEASE NOTE:The surcharge will ONLY apply to those who use more than four times their baseline allowance.

  • Continuing to reduce the difference in price between the tiers.
  • Eliminating rates that do not accurately reflect the cost of serving residential customers. The E8 and E7 rates have been terminated and the E6 rate has been closed to new customers. They will now be replaced by rates that are more aligned with the cost of providing electric service.
  • Implementing a simple, fixed monthly discount of 12% for customers participating in the Family Electric Rate Assistance (FERA) program.
    Learn More About FERA
  • The Minimum Bill Charge, which previously was applied to the combined total of delivery and generation charges will now only be applied to the delivery charge and remain at $10.00.

Providing choice

  • PG&E now offers two rate options to help customers manage their energy. With Time-of-Use rates, you pay lower prices for electricity used during periods of low demand such as late night, early morning, and midday. Unlike the tiered rate plan, Time-of-Use rate plans offer different pricing during different times of day, days of the week, and seasons of the year.

Encouraging conservation

  • Applying a surcharge beginning in 2017 for residential customers on the tiered rate structure who use more than four times their baseline allowance. The High Usage Surcharge will be increased in 2018 and 2019.

Preparing for the future

  • In 2019 and 2020, most residential electric customers are expected to be transitioned to a Time-of-Use rate plan where the price of electricity will depend on the time of day. With Time-of-Use rate plans, customers pay lower prices for electricity used during periods of low demand such as late night, early morning, and midday. During this transition, customers will have the ability to select a different rate plan that may better meet their energy needs.
  • PG&E's goal is to make rate plans simpler and easier to understand. As these changes take effect, we will be sure to explain the impact on your monthly energy statement and provide you with information that can help you save energy and money. To see a personalized rate analysis that makes a recommendation for you based on your past 12 months of energy usage data, please sign in to your account.
  • We're here to help you save energy and money through programs such as CARE and the Energy Savings Assistance Program, energy management tips and audit tools, energy efficiency programs and rebates, and payment options including Budget Billing.

Will PG&E make more money from these changes? No.

PG&E does not make any more money as a result of these changes. In fact, PG&E does not make more money when our customers use more gas or electricity. The amount of money PG&E makes is regulated by the California Public Utilities Commission. PG&E makes money on the cost of building the infrastructure to deliver energy as well as by how efficiently we run our business and how effectively we help lower our customers' energy use. PG&E’s average bills will remain among the lowest in the country. Helping our customers use less electricity and gas is in everyone's best interest.

Pie Chart: Energy Supply 50%; Transmission and Distribution 44%; Public Purpose Programs 4%; Other 2%. Average Standard Rate for Electricity=18.2¢ per kilowatt hour

Energy Supply (50%): The cost of generating and purchasing power for PG&E customers. More than 50 percent of our electricity comes from sources that are free of greenhouse gas emissions, giving us some of the cleanest energy supplies in the nation.

Transmission & Distribution (44%): Operating and maintaining the grid to deliver safe, reliable service. Includes new Smart Grid technology to reduce outages and more quickly restore service to customers.

Public Purpose Programs (4%): Promoting the public good, including discounts for income-qualified customers, investments in energy efficiency programs, and the California Solar Initiative.

Other (2%): Legacy costs for nuclear plant decommissioning, electric generation deregulation, and the impact of the 2001-2002 California energy crisis.