In March 2026, PG&E restructured every residential electric bill in its territory. There is now a Base Services Charge of about $24 a month that you pay before you use a single kilowatt-hour, and per-kWh prices came down to offset it.

PG&E’s framing is that this is not a new fee and that typical bills went down. Both of those statements are defensible. They are also beside the point, because “typical” is doing an enormous amount of work in that sentence.

My bill went from about $18 a month to about $40. Same apartment, same habits, same usage. That is not a rate decrease.

What changed #

Those tier amounts come straight from PG&E’s own Base Services Charge page. Solar customers pay it too. PG&E is explicit about that, and the charge is not offset by generation credits, so exporting power to the grid does not reduce it.

The break-even, which is the only number that matters #

Take the offset at 6 cents a kWh, roughly the middle of the stated range. Then:

$24.00 ÷ $0.06 = 400 kWh per month.

Use more than about 400 kWh a month and you come out ahead. Use less and you pay more. That is the whole thing, and it is the number PG&E’s press releases do not put in a headline.

Run it out:

Your exact offset depends on your rate plan and your usage tier, so treat these as the shape rather than a quote. The shape is what matters: this is a transfer from small households to large ones.

What it did to my bill #

I use about 60 kWh a month. That is very low, and it is not because I sit in the dark. It is a small rent-controlled apartment with gas heat and a gas stove, no air conditioning because this is San Francisco and nobody needs it, LED bulbs everywhere, a laptop instead of a desktop, and I am out of the house most of the day. Electricity runs the lights, the fridge, the router, and my laptop charger. That is the whole load.

My bill more than doubled on identical usage. Up about $22 a month, or roughly $264 a year.

Sit with the second line of that table for a second. The fixed charge by itself, $24, is larger than my entire old bill. I could reduce my consumption to literally zero, unplug the refrigerator, and still owe more than I used to pay for a month of actual electricity.

Spread across 60 kWh, that $24 works out to 40 cents per kWh of pure connection fee, before I buy any power at all. The privilege of having an account now costs me more per kilowatt-hour than the kilowatt-hours do.

There is no version of this where I get that money back. No efficiency upgrade, no behavior change, no appliance swap touches it. That is what a fixed charge is.

Why San Francisco gets hit hardest #

California uses less residential electricity than any other state, averaging somewhere around 500 kWh a month per household against a national average closer to 900. The reason is climate. Most of the country runs air conditioning.

San Francisco is the extreme end of that. We have the mildest climate in the continental United States. Almost nobody here has air conditioning, most apartments heat with gas, and a lot of us cook with gas too. A one-bedroom apartment in this city, occupied by someone who is out during the day, frequently runs 150 to 300 kWh a month. Mine is lower still.

Which puts a very large share of San Francisco households well under the 400 kWh break-even. Not close to it. Under it by half or more.

So the city with the smallest homes, the most renters, and the lowest per-household energy consumption in the state is now subsidizing four-thousand-square-foot houses in the Central Valley running air conditioning through August. That is not an incidental side effect of the policy. It is arithmetically what a fixed charge does.

Where this came from #

The history is worse than the policy, and it is worth knowing.

Before 2022, California law capped residential fixed charges at $10 a month, and $5 for low-income customers. That cap had been there for years, and it was a deliberate consumer protection.

In June 2022, that cap was repealed by AB 205, a budget trailer bill.

Trailer bills exist to implement the state budget. They move fast, they skip the normal policy committee process, and they are voted on in large bundles under deadline pressure. They are not supposed to be where you make substantive consumer policy.

AB 205 repealed the fixed charge cap, replaced it with nothing, and directed the CPUC to create an income-graduated fixed charge. There was no policy committee hearing on the fixed charge provision. Dan Walters at CalMatters documented the whole sequence, including the part where legislators who later attacked the charge had voted for the bill that created it, apparently without knowing what was in it.

In April 2023, the utilities showed their hand. PG&E, Southern California Edison, and San Diego Gas & Electric jointly proposed income-graduated fixed charges reaching as high as $128 a month for the top income tier.

That produced a backlash big enough to matter. It came from the right, on the grounds that income-based utility pricing is a wealth tax administered by a monopoly, and from the left, on the grounds that any unavoidable charge falls hardest on people already struggling to pay. Assemblymember Jacqui Irwin introduced AB 1999 to restore the $10 and $5 caps, with a bipartisan group behind it. More than twenty members of California’s congressional delegation weighed in.

In July 2024, the CPUC voted 4-0 to adopt a smaller version: $24.15 for most customers, $12 for FERA, $6 for CARE. The elaborate income graduation was dropped in favor of piggybacking on the existing low-income programs.

Rollout hit SDG&E and Edison in late 2025 and PG&E in March 2026.

So the backlash worked, in the sense that $24 is not $128. That is the entire consolation on offer, and it is worth remembering that the starting ask was five times higher.

Why it is a bad policy #

It taxes the behavior the state spent fifty years encouraging. California built its entire energy policy on the premise that using less saves you money: tiered rates, efficiency standards, appliance rebates, insulation programs, decades of public messaging. A fixed charge is the one line on your bill that no amount of conservation touches. Replace an old refrigerator, seal your windows, switch every bulb, unplug everything you own, and you still owe $24 on the first of the month.

And because the per-kWh price came down, every efficiency upgrade you might make is now worth less than it was. A measure that saved you 100 kWh a month used to be worth about $4. Now it is worth about $3.40. Payback periods on efficiency investments got longer, in the state that leads the country on efficiency policy. That is an own goal.

It is also regressive in the dimension that actually correlates with wealth. Income and electricity usage are correlated, but housing size is the stronger driver, and housing size tracks wealth closely. Big house, pool pump, central air, second refrigerator, three-car garage. Small apartment, no AC, one of everything.

The CARE and FERA tiers blunt this for households under roughly 200 to 250 percent of the federal poverty line. They do nothing for the enormous middle: a nurse in a studio in the Richmond, a retiree in a rent-controlled one-bedroom, a couple of roommates in the Sunset. All well above the CARE threshold, all using a couple hundred kWh a month, all now paying more so that larger households pay less.

It hits solar owners on purpose. PG&E’s page says it plainly: solar customers use the grid, so they pay the same charge, and generation credits do not offset it. This is the second major hit to residential solar economics in three years, after the 2023 net billing overhaul that already cut export credit values sharply. That overhaul is the main reason California residential solar installations fell off a cliff, and the fixed charge is a further weight on the same scale, in a state with a 2045 clean energy target it is not on track to meet.

And nothing caps it. This is the part I would care about most if I only had room to care about one thing. The old $10 ceiling was in statute. AB 205 removed it and did not put anything in its place, which means the number is now whatever the CPUC says it is, and changing it requires no legislature, no vote, and no news coverage. Just a proceeding that ordinary people do not follow.

The utilities have already told us what they want. They asked for $128. They got $24. There is no structural reason they cannot ask again in three years, and consumer advocates have been saying since 2024 that what is $24 today becomes $80 later. I see no mechanism that prevents it.

Underneath all of it, the change does not make anything cheaper. Rate design does not move PG&E’s revenue requirement by one dollar. The company collects the same money. All that changed is the formula for splitting it among households.

The stated goal was to lower the marginal price of electricity so that heat pumps and EVs pencil out against gas, which is a real problem worth solving. But the money to do it came from the households using the least electricity in the state. It could have come from moving wildfire mitigation and public purpose program costs out of rates entirely and onto the general fund or a bond, which multiple analysts proposed during the proceeding. That would have lowered marginal prices without charging a person using 60 kWh a month more than that person previously paid in total. Taking it from the smallest users was a choice.

California’s electricity prices are high because of wildfire liability, wildfire mitigation, undergrounding, transmission buildout, and the accumulated cost of a utility that pleaded guilty to manslaughter over the Camp Fire and has been through bankruptcy once already. None of those costs went anywhere in March. Moving them from the per-kWh line to the fixed line is not affordability policy. It is a reallocation dressed up as relief, and the press release announcing that average bills went down is technically accurate and substantively misleading.

What to actually do about it #

Check whether you qualify for CARE or FERA. This drops the charge from $24 to $6 or $12 and also takes about 20 percent off the rest of your bill. The income thresholds are more generous than people assume and the application takes ten minutes. If you are a student, part-time, freelance, early career, or between jobs, check. Full details are in cutting your PG&E, internet, and phone bills.

Find your actual monthly kWh on your bill or in your PG&E account history and compare it to 400. That tells you which side of this you are on, which is more informative than anything PG&E will send you.

Re-run your rate plan. Lower volumetric rates change the math on time-of-use plans. PG&E’s rate comparison tool uses your real usage history and takes five minutes. The plan that was cheapest for you in 2025 may not be cheapest now.

Adjust your expectations on efficiency payback. Efficiency measures still pay. They pay less than they did. Factor that in before buying anything on a projected payback period.

Know that CleanPowerSF does not exempt you. San Francisco’s community choice program supplies your electricity, and PG&E still delivers it and bills you for delivery. The Base Services Charge applies either way.

And accept the part you cannot fix. You cannot conserve your way out of a fixed charge. That is the definition of one. For a site premised on the idea that most expensive defaults are optional, this is a rare case where the expensive default is mandatory, and the only honest advice is to get the low-income tier if you qualify, get your rate plan right, and know exactly what this cost you.

That last part matters more than it sounds. The reason a change like this passes is that almost nobody computes their own number. It arrives inside an announcement about bills going down, on a bill most people never read past the total. I only caught it because I have been tracking this bill for years and an $18 line item turning into $40 is hard to miss when the rest of your spending is deliberate.

Two hundred and sixty four dollars a year, for nothing. Not for more electricity, not for better service, not for anything I chose. For being a household that uses very little in a state that spent fifty years telling me to.

The rest of the bills you can actually do something about are in cutting your PG&E, internet, and phone bills, and the broader collection of things that are cheaper than the default is in Frugal SF.