Overview

Understanding your electric charges starts with understanding kilowatt hours (kWh). Kilowatt hours are the units used to measure your electric use. You are billed based on how much electricity, in kWh, you use each month.

The State of California has adopted a policy to encourage energy conservation and residential customers are charged more for electricity above a certain baseline level each month. A baseline quantity is the amount of energy that is intended to satisfy a substantial portion of the energy needs of the average customer in your area—for things like heating, water heating, lighting, refrigeration and cooking. As your electric use moves above your baseline quantity, the price you pay for per kWh increases.

Customers enrolled in the California Alternate Rates for Energy (CARE) program also pay for their electricity as they increase their usage, but their costs are based on three tiers, instead of the traditional five.

Electricity: Baselines

How are baselines determined?
Baseline quantities are set by state law and implemented with the approval of the California Public Utilities Commission. Since baseline quantities are set based on the average use for residential customers in an area, they can vary by geographic location, or baseline territory. Baseline quantities also vary by time of year (summer or winter), and are based on your home's heating sources.

Baseline quantities are set between 50 and 60 percent of the electricity the average residential customer uses in each territory. In the winter, all-electric customers have a higher baseline quantity, between 60 to 70 percent of average use, to account for electric heating.

What can I do to help stay within my baseline quantity?
Your energy use results from a combination of number of occupants in your home, square footage of your home, number of electronics in your home, including computers and TVs, and the number of hours you run these electronics and other appliances in your home, including your heating and cooling systems. Visit the Understand Your Energy Use page to understand how you are using energy, and what you can do to reduce it to stay within your baseline quantity.

Some customers may be eligible for additional baseline quantity allowances if established medical criteria are met.

Electricity: 5-Tier Rate Structure

Electric tiers work like many mobile phone plans – you get a low rate when your use stays within certain limits. If you go over your allotted kWh, you will be charged a higher rate, just as if you went over the allotted minutes in your mobile phone plan. PG&E has a 5-tier rate structure where each additional increment, or tier, of use beyond the baseline level is charged at a higher price.

Rates for Tier 1—the baseline tier—will be billed at the baseline rate. Use beyond this level is charged at one of the "over baseline" rates, priced at increasingly higher levels. For example, the Tier 2 rate applies to energy use up to 30% over the baseline amount. The highest rate, or the Tier 5 rate, is applied to use that is more than three times the baseline amount.

The CARE program provides a monthly discount on energy bills for customers in income-qualified households and is based on a three-tier structure in which electricity use costs less than in the traditional five-tier structure.

Other Charges

While the majority of charges on your bill are incurred due to energy use, there are a few more costs that factor into your bill. Visit the Understand Your Bill page for more information.