Utilities, sewer and power: the hidden half of an ADU budget

The unit is the part you see. The water line, sewer lateral, gas and electrical service are the part that decides whether your project stays on budget. In the California owner survey, 14 percent of owners ranked utility connections among their top challenges.

Share or split?

The first choice is whether the ADU shares utilities with the main house or gets its own meters.

The San Diego Housing Commission tried to split utilities on all five of its pilot ADUs. Its report found:

• Splitting utilities may add $10,000 or more to the budget.
• On one lot, splitting would have required trenching in the street, which would have cost more than $100,000 and added more than six months. The team shared utilities on that lot instead.
• Where utilities are shared, the agency used a third-party company to split water and sewer bills by ratio, which charges a fee every billing cycle.

Sharing costs less up front. Splitting makes renting easier and avoids billing disputes. Decide early, because it changes the design.

The electrical panel

A new ADU needs power for heating, cooking, hot water and often a heat pump. Many older homes do not have enough panel capacity. The San Diego report recommends having an engineer or electrician check the panel during the early feasibility stage, because insufficient capacity can be what triggers street trenching. In the pilot, relocating panels to get gas service to the ADUs added about $10,000 per site and extra permit time.

Sewer

Your ADU's drain line usually ties into the main house's sewer lateral, which runs to the city main. Ask a plumber to scope the existing line with a camera. An old clay or cracked lateral may need to be replaced anyway, and a backyard ADU that sits lower than the house may need a pump.

If the property is on a septic system, the system has to handle the extra bedrooms. That is a separate review with the health department, and it can limit what you build.

Connection fees in California

California limits what utilities can charge for ADUs. According to the state ADU handbook:

• An ADU made from existing space, or a JADU, is not treated as a new residential use for connection fees or capacity charges, unless built together with a new home.
• For other ADUs, any connection fee or capacity charge must be proportionate to the ADU's burden, based on its size or plumbing fixtures compared with the main house.
• Impact fees are not allowed on ADUs of 750 square feet or less.

Outside California, connection fees are set locally. Portland, for example, waives its system development charges for ADUs that are not used as short-term rentals; see our rental income guide.

Questions to ask before you design

• How much spare capacity does my electrical panel have?
• Where do the water, sewer and gas lines run, and how far is the ADU site from each?
• Can the utilities reach the ADU without crossing a driveway or going into the street?
• What does my utility company require to set a new meter, and how long does its review take?
• Is my sewer lateral in good shape? Get a camera inspection.
• If I am on septic, can the system handle the extra load?

Put it in the contract

Utility work is where builder scopes often stop short. A prefab quote may end at "utility connection points," which may be a few feet from the unit. A site builder may exclude trenching or panel upgrades. Ask every bidder to state in writing:

• Where their utility scope begins and ends
• Whether the panel upgrade is included
• Who coordinates with the power company
• Whether trenching and patching the yard or driveway is included

Before you call a builder: answer six questions to pick a type, rough out a budget, and save builders to My Stack as you go.