March 2026 PG&E Rate Impact Report: Palo Alto, CA
What This Means for Palo Alto
Average usage in Palo Alto sits near the 483 kWh threshold. For many households, the lower volumetric rates will roughly offset the new fixed fee, resulting in a minimal net change to your monthly bill.
Regulatory Foundation
The data in this report is grounded in Assembly Bill 205 (AB 205) and CPUC Decision D.24-05-028, which establishes the $24.17 fixed fee and the rules for how it must be implemented. While the rules are set now, the projected effective date for PG&E customers is March 2026.
A core requirement of this law is Revenue Neutrality. PG&E is not allowed to increase its total revenue through this change; instead, it must lower the price per kilowatt-hour (kWh) to offset the new monthly fixed charges. This creates a redistribution effect: high-usage households benefit more from the rate cut, while low-usage households are less able to earn back the fee. That is why break-even points like 483 kWh (E-TOU-C) and 183 kWh (E-ELEC) matter—they mark where rate savings exactly equal the new fee.
Marker shows the estimated average monthly usage for Palo Alto.
Local Impact Scenarios
Estimates assume a $24.17 fixed fee and a $0.05/kWh rate reduction. Actual impacts vary by plan and usage.
| Scenario in Palo Alto | Est. Monthly Usage | Est. Monthly Bill Change |
|---|---|---|
| Legacy Solar (NEM 2.0) | 0 kWh | +$14.17/mo Increase |
| Efficient Condo | 273 kWh | +$11/mo Increase |
| Typical Palo Alto Home | 420 kWh | +$3/mo Increase |
| Home with EV | 770 kWh | -$14/mo Savings |
Special Note for Palo Alto Solar Owners
If you have a legacy NEM 2.0 system with 100% offset, you are in the group facing the largest relative impact. Because you have no net grid imports, you cannot take advantage of the projected $0.05/kWh rate reduction. Instead, you will see your mandatory monthly costs jump from a ~$10 floor to a hard $24.17 fee, an increase of roughly $170 per year. Furthermore, because the price of electricity is dropping, every kWh your panels produce for your own use is now worth $0.05 less than it was before, slightly extending your system's ROI timeline.