What Is Third Party Electric on a PG&E Bill?

For customers of Pacific Gas and Electric (PG&E), understanding “third-party electric” on a bill clarifies how electricity reaches homes and businesses. While PG&E delivers electricity across its service territory, the actual generation of that power can come from different sources. This article explains the role of these third-party providers and how their services are reflected on your monthly PG&E statement.

What Third Party Electric Is

“Third-party electric” refers to electricity generation providers that operate independently of PG&E. While PG&E maintains and operates the transmission and distribution infrastructure—the poles, wires, and equipment that deliver electricity to your location—these third-party entities are responsible for creating the electricity itself. This distinction between electricity generation and delivery is fundamental to understanding your bill.

One common type of third-party provider is a Community Choice Aggregator (CCA). CCAs are local government entities that procure electricity for their residents and businesses. These non-profit agencies typically focus on providing cleaner energy options, such as renewable sources like solar and wind, and often aim to offer competitive rates. Customers residing in an area served by a CCA are usually automatically enrolled in the CCA’s service, with an option to opt out and return to PG&E’s generation service. Examples of CCAs operating in PG&E’s service area include CleanPowerSF, Peninsula Clean Energy, and East Bay Community Energy.

Another category of third-party providers includes Direct Access (DA) providers, also known as Electric Service Providers (ESPs). These are competitive, non-utility companies that directly sell electricity to eligible customers. Unlike CCAs, which typically serve entire communities, DA is primarily available to large commercial and industrial customers. Residential customers generally cannot choose DA providers due to state regulations.

How Your Bill Reflects Third Party Service

When a third-party electric provider is involved, your PG&E bill effectively splits into two main components: charges for electricity delivery and charges for electricity generation. PG&E continues to handle all aspects of electricity delivery, including the operation and maintenance of its poles, wires, and substations. Therefore, your bill will always include PG&E Electric Delivery Charges, which cover the cost of transmitting power to your home or business.

The generation charges, representing the cost of the electricity itself, come from your third-party provider, such as a CCA. While these charges are for the third party’s service, they are typically consolidated onto your single PG&E bill for convenience. To avoid double-charging for generation, your PG&E bill will feature a “Generation Credit” or “PG&E Generation Credit.” This credit offsets the amount PG&E would have charged you for electricity generation, as you are now purchasing that service from the third-party provider.

A significant charge that appears when you receive generation from a third party is the Power Charge Indifference Adjustment (PCIA). This charge is designed to ensure that customers who switch from PG&E’s generation service still contribute to the costs of long-term power contracts PG&E entered into on their behalf before their departure. The PCIA amount can vary annually and is calculated based on the difference between what PG&E paid for power contracts and the current market value of that power.

A Franchise Fee Surcharge may also appear on your bill. This state-mandated fee is collected by PG&E on behalf of cities and counties for the right to use public rights-of-way for utility services. For customers with a third-party generator, this surcharge is often shown as a separate line item, whereas for PG&E’s bundled service customers, it is included within their generation rate.

Managing Your Electricity Provider Choice

You can identify your generation provider by examining your monthly PG&E bill. It will list the third-party entity, such as a Community Choice Aggregator, if you are enrolled in their service. The bill will clearly distinguish between PG&E’s delivery charges and the generation charges from the third-party provider.

If you are currently served by a Community Choice Aggregator and wish to return to PG&E for electricity generation, you have the option to opt out. This process generally involves contacting your specific CCA directly to submit an opt-out request. Most CCAs have a clear process for opting out, often detailed on their websites. If you opt out after an initial grace period, some CCAs may require you to remain with PG&E’s generation service for a certain duration, such as one year, before being able to re-enroll in the CCA program.

For residential customers, Direct Access providers are generally not an available choice for switching. The state has limited new enrollments in Direct Access, making it primarily an option for eligible commercial and industrial customers. When considering your electricity generation choice, factors such as renewable energy goals, competitive rates, and the impact of charges like the Power Charge Indifference Adjustment might influence your decision. PG&E remains responsible for the safe and reliable delivery of electricity, maintenance of the grid, and emergency services.