Does your ADU need its own electrical meter?

The short version, by ADU type

What San Jose actually says

This is worth reading in the city's own words, because it is the sentence that settles the argument. From the City of San Jose ADU FAQ:

Two useful things fall out of that. The requirement is real, so plan for it. And the party to ask is PG&E, on the number above, not the permit centre. We have watched homeowners spend weeks routing a utility question through a building department that has already told everyone, in writing, that it is not their call.

One more from the same FAQ, because people are always surprised by it: an ADU gets its own street address, assigned as part of the building permit process.

What the city legally cannot do to you

California Government Code section 66324 is the ADU utility statute, and most homeowners have never heard of it. It is short and it is worth knowing before you accept a plan-check comment at face value.

• An ADU is not a new residential use for the purpose of calculating connection fees or capacity charges, unless it was built together with a new single-family house. §66324(b).
• No impact fee at all on an ADU under 750 square feet. §66324(c)(1).
• For an ADU converted within existing space on a lot that already has a house, a local agency, special district or water corporation may not require a new or separate utility connection, and may not charge a related connection fee or capacity charge. §66324(d).
• For other ADUs — new detached construction, in practice — a separate connection can be required. But the fee has to be proportionate to the burden the unit actually places on the system, measured by square footage or by drainage fixture unit values. It is not allowed to be the same fee a new house would pay. §66324(e).

So why does PG&E get to require a meter anyway?

Because of exactly who section 66324 binds. Read the statute and it restrains “a local agency, special district, or water corporation.” PG&E is an electrical corporation. It is not a local agency, it is not a special district, and it is not a water corporation.

That is the whole answer, and it is why the city's FAQ is worded the way it is. The statute that protects you from the city's water and sewer charges does not reach the utility's electric metering policy. Anyone telling you that state law means your ADU cannot be made to have its own electric meter has read half of a sentence.

What the $10,000 is actually buying

The separate service is not a meter on a wall. On a detached unit at the back of a lot it is a run of new service, trenching and conduit from the point of connection to the unit, the meter and main disconnect set where the utility will accept them, the panel at the ADU, the permit, the inspection, and coordination with PG&E on their schedule rather than yours.

That last item is the one that surprises people. Utility coordination is a queue, and it is not a queue your builder controls. It is the single most common reason an ADU schedule moves, which is why we start it early rather than when the framing is up.

Two things this is not:

• It is not a panel upgrade on your house. That is a separate item at $7,000–$10,000, triggered when new load is added to your existing panel. An ADU project can carry both: its own new service, and an upgrade to the main house panel if something in the work overruns it.
• It is not optional in the budget. Along with plans, the setback survey and certification, and the soils report, this is fixed cost that does not shrink when the unit does. It is the reason a smaller ADU costs more per square foot, not less.

It is not PG&E everywhere, and that changes the process

Two cities in our area are not on PG&E at all, and on an ADU that is a genuinely different coordination process with a different timeline rather than a footnote.

• Santa Clara is served by Silicon Valley Power, the city's own municipal utility.
• Palo Alto runs its own utilities department.

So “PG&E requires it” is a San Jose answer, and it is the right answer for most of our service area. It is not a statewide one. Ask the utility that actually serves the parcel, early, and get the answer before the budget is set rather than after.

What to do with this before you sign anything

1. Find out which utility serves the parcel

   PG&E for most of Santa Clara and San Mateo counties, Silicon Valley Power in Santa Clara, the city in Palo Alto. This takes one phone call and it changes the timeline.

2. Establish which kind of ADU you are building

   Conversion inside existing space, or new detached construction. That single fact decides which half of §66324 applies to you, and it is the difference between a fee a city cannot charge and a connection it can require.

3. Ask every bidder where the separate service is in their number

   Not whether it is needed. Where it is. A bid that does not name it has either priced it somewhere you cannot see, or has left it out and will find it later. On a detached San Jose unit it should be a visible line around $10,000.

4. Start the utility conversation before design is final

   Where the utility will accept the meter affects where things go on the lot. Finding that out after the plans are stamped is how a set gets redrawn.

Common questions

Where to go next

Written by the team at Elusive Construction, a licensed California general contractor (B #1112902) building in Santa Clara and San Mateo counties. General information about how residential construction works — not legal advice. For your specific contract, talk to an attorney.