Electricity Rates

Your Energy Bill & Rates Explained

Energy bills can be confusing to read, so let’s break down the charges that make up your bill, how those rates are set, and what steps you can take to reduce your energy costs.

Your energy bill is calculated by your energy rate times your monthly energy usage, and is made up of four types of charges:

1. Electric generation charge – the actual power you use.
2. Electric delivery charges – also known as transmission and distribution, this pays for the infrastructure used to get energy to your home or business, such as power lines.
3. Power Charge Indifference Adjustment (PCIA) – this charge represents the costs PG&E incurred as a result of historically buying energy to serve you. All SVCE and PG&E customers pay this fee.
4. Gas charges – we won’t get into these in this article, but PG&E manages all gas services for SVCE customers.

A portion of what you pay in 1-4 above goes to fund statewide programs paid by all customers.

• Public Purpose Programs – this includes statewide costs to fund energy efficiency and payment assistance programs.
• Other Non-Bypassable Charges – including funding for wildfire mitigation and other funds.

Silicon Valley Clean Energy (SVCE) customers buy their electricity from SVCE via their PG&E bill. Everything else (gas, electric delivery, and additional charges) are managed by PG&E.

Electric Generation Charges – paid to SVCE

SVCE provides customers with clean electricity that shows up on their PG&E bill as “Electric Generation Charges.” SVCE’s power comes from solar, wind, hydro, geothermal and other sources, in addition to batteries, which increase grid resilience and allows clean energy to be used even when the sun is not shining.

Transmission, Distribution, and Additional Charges – paid to PG&E

Nearly 70% of the average residential electricity bill is comprised of transmission, distribution and other charges.

Customers pay PG&E to get electricity to their home – this service is most commonly referred to as transmission and distribution.

Transmission charges pay for the infrastructure necessary to move electricity from generation sources around California and the West to the local distribution network. The distribution charges pay for the local network of poles and wires that carry electricity from the transmission system to homes and businesses.

Additional fees and charges are also embedded in these rates and collected by PG&E. These include Public Purpose Programs that fund regional or statewide programs such as income-qualified bill assistance and energy efficiency, and non-bypassable charges that fund various efforts, such as wildfire prevention.

Transmission, distribution, and the additional charges paid to PG&E constitute a majority of the average customer bill. Over the last five years, these charges have increased by nearly 85%, impacting all customers in the PG&E territory (including SVCE customers).

How Rates Are Set

How SVCE generation rates are set.

SVCE is a not-for-profit public agency and revenues in excess of operating costs are returned to the community through customer programs and services and competitive rates. For the average household in Silicon Valley, electricity generation makes up 33% of the overall electricity bill.

What determines that rate? The SVCE Board of Directors, elected officials representing each of the 13 SVCE member communities, votes on how the agency sets its generation rates.

SVCE first considers the forecasted costs to provide its service, including cost uncertainty under various scenarios, and then forecasts revenue to recover those costs. Rates are determined based on the forecasted revenue requirement and overall projected load for all SVCE customers. The SVCE generation rate also includes the cost of the Power Charge Indifference Adjustment (PCIA).

This approach provides SVCE customers with clean electricity at a competitive rate across all rate plans and ensures that SVCE is financially secure. This allows SVCE to maintain stable rates for customers and execute long-term contracts for renewable energy.

SVCE customers are saving money on electricity generation costs compared to PG&E customers, but generation prices have recently increased. This is due to higher costs for key compliance products SVCE must purchase, including renewable and carbon-free resources and capacity used to ensure system reliability. While load-serving entities such as SVCE are working to add more capacity to bring down prices, backlogs from the COVID-19 pandemic and increasing demand mean it will likely take some years for the industry to catch up.

SVCE works to balance our clean power portfolio with affordability and reliability in mind. Nearly 92 cents of every dollar is spent on power supply costs; in total SVCE has contracted for 896 megawatts of clean electricity generation and 532 megawatts of battery capacity. Many of these contracts are for brand-new clean resources, helping to increase state-wide supply.

How PG&E transmission and distribution rates are set, and why other additional charges are increasing.

As mentioned above, the rest of your bill is made up of services managed by PG&E. So, how are those charges determined? PG&E submits its rate details to the California Public Utilities Commission (CPUC) for review. In this review, the CPUC determines if the rates are fair based on the projections provided and the utility’s associated costs.

As customers have noticed, these rates have increased drastically in recent years. The CPUC Public Advocates Office reported earlier this year that PG&E rates have risen 127% since 2014, with nearly half of the increase happening between 2022 – 2024. PG&E states that these transmission and delivery rate hikes are due to costs incurred to ensure the safety and reliability of its energy services including efforts to mitigate wildfire risks.

Three times in 2024, the CPUC has approved separate, additional rate increases in the transmission and distribution portion of the bill that PG&E stated was needed to cover past costs for vegetation management (i.e. tree trimming).

The chart below shows how wildfire mitigation is built into PG&E’s transmission and distribution costs and how it also appears as separate additional charges.

How SVCE Supports Customers

Over the past six years, SVCE customers saved more than $117 million on electricity bills. And since 2020, SVCE has provided an additional $11 million in bill savings to customers enrolled in the income-qualified CARE/FERA program. By providing competitive electricity rates, SVCE has put more than $128 million back into the pockets of local customers.

Many resources are available for customers who need additional support paying their energy bill. These are funded through the state’s Public Purpose Programs.

Get bill assistance – SVCE customers can participate in financial assistance programs like Medical Baseline, California Alternate Rates for Energy (CARE), Family Electric Rate Assistance (FERA) and more. Learn more about payment assistance >>

Know your rate – use the PG&E Compare My Rate tool to see which energy rate is best for you. If you are on a time-of-use rate, be sure to prioritize energy use during off-peak hours (avoid high use from 4 – 9 p.m.) so that the energy you are using is cheaper. Compare rate options >>

Use energy efficiently by ensuring you are doing all you can to lower your energy usage. This includes investing in high-efficiency lighting and appliances and proper weatherization of your home. Use the SVCE Do-It-Yourself Energy Savings Toolkit or go through a free home energy audit. Explore energy efficiency programs through PG&E or BayREN.

Have solar? Consider adding a battery – Add batteries to your existing solar system to store your clean energy for use in the evening hours when grid electricity is more expensive. See battery options >>

Additional Energy Bill and Rates FAQs