diff --git a/CHANGELOG b/CHANGELOG
index ed71b5794..a76f7d065 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -7,6 +7,7 @@
 - Treat expansion operators ('*', '**') in a similar way to function calls to
   avoid splitting directly after the opening parenthesis.
 - Increase the penalty for splitting after the start of a tuple.
+- Increase penalty for excess characters.
 
 ## [0.16.1] 2017-03-22
 ### Changed
diff --git a/yapf/yapflib/style.py b/yapf/yapflib/style.py
index 0d4ee04f1..a84f2bce7 100644
--- a/yapf/yapflib/style.py
+++ b/yapf/yapflib/style.py
@@ -228,7 +228,7 @@ def CreatePEP8Style():
       SPLIT_PENALTY_AFTER_UNARY_OPERATOR=10000,
       SPLIT_PENALTY_BEFORE_IF_EXPR=0,
       SPLIT_PENALTY_BITWISE_OPERATOR=300,
-      SPLIT_PENALTY_EXCESS_CHARACTER=3500,
+      SPLIT_PENALTY_EXCESS_CHARACTER=4500,
       SPLIT_PENALTY_FOR_ADDED_LINE_SPLIT=30,
       SPLIT_PENALTY_IMPORT_NAMES=0,
       SPLIT_PENALTY_LOGICAL_OPERATOR=300,
diff --git a/yapftests/reformatter_basic_test.py b/yapftests/reformatter_basic_test.py
index 36c03e9e5..569f46581 100644
--- a/yapftests/reformatter_basic_test.py
+++ b/yapftests/reformatter_basic_test.py
@@ -1163,6 +1163,24 @@ def bar(self):
     uwlines = yapf_test_helper.ParseAndUnwrap(code)
     self.assertCodeEqual(code, reformatter.Reformat(uwlines))
 
+    unformatted_code = textwrap.dedent("""\
+        def _():
+          if True:
+            if True:
+              if contract == allow_contract and attr_dict.get(if_attribute) == has_value:
+                return True
+        """)
+    expected_code = textwrap.dedent("""\
+        def _():
+          if True:
+            if True:
+              if contract == allow_contract and attr_dict.get(
+                  if_attribute) == has_value:
+                return True
+        """)
+    uwlines = yapf_test_helper.ParseAndUnwrap(unformatted_code)
+    self.assertEqual(expected_code, reformatter.Reformat(uwlines))
+
   def testDictSetGenerator(self):
     code = textwrap.dedent("""\
         foo = {