By Matthew Holloway |
The Arizona Corporation Commission (ACC) voted unanimously to repeal the state’s Renewable Energy Standard and Tariff (REST) rules during its March 4 open meeting, ending a regulatory framework that has governed renewable energy requirements for nearly two decades.
The REST rules, first adopted by the commission in 2006, required regulated electric utilities to obtain a specified portion of their retail electricity sales from renewable resources. The standard began at 1.25 percent in 2006 and increased incrementally until reaching 15 percent after 2024, with a portion of the requirement reserved for distributed resources such as rooftop solar.
According to the commission, the repeal finalizes a rulemaking process that began in January 2024 under the commission’s rulemaking docket RE-00000A-24-0026.
ACC Chairman Nick Myers joined the other commissioners in the unanimous 5-0 vote. In a statement following the decision, Myers said the mandates were no longer aligned with current conditions in Arizona’s electricity market.
Commission officials said the REST framework achieved its original goal of expanding renewable energy generation in Arizona. The state’s major regulated utilities, Arizona Public Service (APS), Tucson Electric Power (TEP), and UNS Electric (UNSE), have met or exceeded the renewable energy targets established under the rules.
Myers added, “The reality is that the renewable energy landscape in Arizona has changed dramatically in the past 20 years.”
Since the program began, the utilities have collected more than $2.3 billion in REST surcharges from customers to fund renewable programs and incentives, according to the commission. More than $779 million of that amount was distributed as incentives for renewable energy programs approved by the ACC. According to the commission, that amount does not include “above-market amounts paid out to rooftop solar customers under net metering and the current RCP approach.”
Commissioners also cited long-term power contracts entered into under the mandate as contributing to costs borne by ratepayers. One example highlighted by the commission involves a 30-year solar power agreement between APS and the Solana Generating Station, under which APS customers have paid approximately $274.3 million above market prices for power to date.
“The Solana plant is basically providing energy at 15 cents a kilowatt-hour when the rest of solar these days are around 2 to 2 1/2 cents a kilowatt-hour,” Myers said during the meeting.
Under the REST rules, utilities were required to obtain at least 15 percent of their electricity from renewable sources by 2025, with 30 percent of that renewable requirement coming from distributed sources such as rooftop solar.
Myers said utilities will continue to procure energy resources through competitive procurement processes designed to identify cost-effective and reliable power generation options.
Arizona Attorney General Kris Mayes released a statement in September and sent a letter to the commission opposing the repeal. During her tenure on the commission from 2003-2010, Mayes, then holding office as a Republican, participated in the adoption of the REST Rules and Arizona’s Electric Energy Efficiency Standard Rules (EEES Rules).
The Arizona Corporation Commission regulates the state’s investor-owned utilities and has authority over energy policy decisions such as renewable energy standards and utility rate structures.
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.
