By Matthew Holloway |
In a key vote on Wednesday, the Arizona Corporation Commission, led by Commissioner Rachel Walden, unanimously repealed the state’s Energy Efficiency (EE) and Demand Side Management (DSM) Rules. The regulations, now 15 years old, have been expired since 2020, and according to the board, have cost Arizona ratepayers more than $1 billion in additional surcharges since inception.
Both APS and TEP have exceeded the requirements, the board noted, with Commissioner Márquez Peterson explaining, “The current standard required the accumulated savings of 22% of retail sales by 2020. We’ve had(sic) reconfirmed that as of 2024, APS is at 26.2% and TEP is currently at 28.52%. Both utilities have exceeded the standard which is out of date.”
“I cast my vote to repeal the rules because the rules were not based on any cost-effectiveness tests, nor did they contain any other ratepayer protection requirements. The mandates instead passed all program costs in support of the few on the backs of all ratepayers, especially onto those who can least afford it—our low- and fixed-income ratepayers, and our hardworking Arizona families,” Commissioner Walden said in a statement Thursday.
“I fully support the use of EE mechanisms and DSM programs, which have demonstrated energy savings, especially during peak summer heating days when our energy needs have stressed the electrical grid. What I do not support is the cost shifts and economic burdens these mandated programs have created, costing ratepayers in excess of $1.1 billion.”
Commissioner René Lopez noted during the meeting that the rules “were written over a decade ago.” He added, “We’ve had a lot of changes in technology, and a lot of changes in demand are coming, It served its purpose, everyone has met the requirements, now it’s time for them to go away.”
The commission explained that the repeal of the rules does not eliminate the EE/DSM program; instead, Arizona utilities will now be required to use All-Source Requests for Proposals when they create plans to address forecasted energy demands, with EE and DSM programs continuing as two categories of solutions that can be proposed for the utility’s consideration.
“I urge technology stakeholders to continue to propose these types of solutions to offset utility generation needs,” Walden added. “The solutions must be cost-effective, and the Commission will continue to evaluate these programs on a case-by-case basis during rate cases. I recently offered an amendment to approve a Bring Your Own Device DSM program for APS customers that did not create a cost shift, and that amendment was adopted by majority vote by this Commission.”
Commissioner Márquez Peterson added in a statement, “As a Commissioner, I will continue to communicate to utilities my support for effective EE programs in future rate cases. These programs can save ratepayers on their electricity bills and help us ensure we have reliable energy during peak times of the day.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
