by Matthew Holloway | Sep 21, 2025 | News
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In a key vote on Wednesday, the Arizona Corporation Commission, led by Commissioner Rachel Walden, unanimously repealed the state’s Energy Efficiency (EE) and Demand Side Management (DSM) Rules.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 Both utilities have exceeded the standard which is out of date.”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.
by Corinne Murdock | Feb 9, 2024 | News
By Corinne Murdock |
A vote by the Arizona Corporation Commission (ACC) earlier this week moved to limit energy companies’ push to meet Environmental, Social, Governance (ESG) goals.
The ACC voted 4-1 on Tuesday to draft rules to repeal existing rules and mandates for renewable energy as well as electric and gas energy efficiency: the Renewable Energy Standard and Tariff (REST) Rules and the Energy Efficiency Standards (EE), also known as the Demand Side Management (DSM). Per the commission, the rules and mandates for REST and EE/DSM resulted in incentives for renewable energy projects and services, since utilities were required to file proposals describing REST compliance.
Commissioner Ana Tovar was the sole “no” vote on the motions. The standards behind EE/DSM expired in 2020, but previous commissions didn’t repeal the rule.
The commission noted in Wednesday and Thursday press releases that the rules, tracing back to 2006 for REST and 2010 for EE/DSM, have cost customers nearly $3.4 billion through corresponding surcharges. REST surcharges have cost ratepayers nearly $2.3 billion, while EE/DSM surcharges cost nearly $1.1 billion.
Commissioner Nick Myers said in Wednesday’s press release that the rules and mandates were unnecessary and would result in a drastic cost increase to consumers.
“I believe it is time for the Commission to consider repealing these rules and mandates that appear to unnecessarily drive-up costs,” said Myers. “Utilities should select the most cost-effective energy mix to provide reliable and affordable service, without being constrained by government-imposed mandates that make it more expensive for their customers.”
In Thursday’s press release, Chairman Jim O’Connor — who filed the motion to repeal REST — said that the commissioners from nearly 20 years ago were “well-intentioned” in their vision for reducing the state’s carbon footprint through the REST rules, but that no cost controls were ever implemented, at the detriment of ratepayers.
“In 2006 when the REST rules supplanted the EPS rule, concerns by the dissenting Commissioner cited the lack of cost control measure that would negatively impact ratepayers, and the then-Chairman Hatch-Miller intended that the Commission review annually whether it was in the best interest of the ratepayers. Those reviews never occurred and costs were never considered,” said O’Connor.
O’Connor further remarked that contracts in pursuit of environmental mandates ultimately burdened the ratepayers.
“We began the steps needed to repeal a rule that has cost ratepayers billions of dollars in out of market priced contracts,” said O’Connor. “Mandates distort market signals and are not protective of ratepayers.”
Commissioner Kevin Thompson — who filed the motion to repeal EE/DSM — stated in the press release that the repeal marked a victory for ratepayers, and the end of “feel-good programs” that lack affordability and reliability.
“Arizona utilities have collected over a billion dollars in ratepayer surcharges for efficiency initiatives that have done little to avoid the need for new generation and have benefitted a select few,” said Thompson. “Energy efficiency programs are routinely pushed by vocal special interest groups where the economic benefits favor a small group of customers, and the large majority of ratepayers foot the bill.”
Prior to the ACC acting on the draft rules, the commission will open up multiple public comment opportunities. The draft rules and intake for public comment will be located on the following ACC dockets: gas utility energy efficiency, electric utility energy efficiency, and renewable energy.
The entire rulemaking process will take over a year, according to commission staff. The REST and EE/DSM repeal are part of a greater, five-year review of existing ACC rule packages.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
by Daniel Stefanski | Sep 4, 2023 | News
By Daniel Stefanski |
A first-year Corporation Commissioner continues to fight for Arizona ratepayers.
Late last month, Republican Corporation Commissioner Kevin Thompson issued a press release to announce that he had “amended several provisions in a recent proposal for UniSource Energy’s (“UNS”) Demand Side Management (“DSM”) Energy Efficiency (“EE”) program.” The release explained that these amendments “eliminated or revised several proposals” and “reigned in ratepayer-funded incentives to contractors and sales consultants and focused on prioritizing programs that provided greater value to residential customers and target low-income customers.”
Thompson educated readers on what DSM entailed, writing that “DSM is a ratepayer-funded surcharge that finances Commission-approved EE programs, which are implemented by UNS and other utilities, with the goal of reducing energy load and promoting energy efficiency.” According to Thompson’s information, “the utility spent just over $2.7 million in ratepayer funds on DSM EE programs during 2022.”
The release revealed that the “proposal (in front of the Commission) called to vastly expand the existing UNS EE budget, with nearly $5.8 million in ratepayer-funded programs up for consideration.”
In a statement, Thompson said, “Before increasing ratepayer surcharges to blindly expand energy efficiency programs, it’s important to address inefficiencies in existing programs, eliminate financial rewards for private entities, and ensure residential and low-income customers receive adequate representation in approved programs.”
The Republican commissioner specifically looked for “ratepayer funded incentives weaved throughout the DSM EE programs.” Thompson’s announcement noted that “many of the proposed programs provided incentives and rebates to third parties with financial stakes in the adoption of certain measures or the installation of certain products.” The proposal was devoid of “several incentives and payment reward programs” after Thompson’s due diligence, including:
- Incentives to homebuilders to install energy efficient devices in certain new homes
- Bonus incentives to sales consultants
- Marketing stipends for third parties to promote certain programs
- Project incentives to contractors
The proposal had another layer to it, per Thompson, with “the majority of proposed new programs targeting commercial and industrial users.” Thompson was concerned about these programs because “the majority of UNS’s customers are residential and the proposals were of limited value to the public.”
Commissioner Thompson added, “Commissioners must look out for the ratepayer, and we can’t haphazardly spend millions of dollars in ratepayer funds when there are concerns with the way current programs are being deployed. Residential customers shouldn’t be subsidizing purchases for hotel room HVAC units, electric forklifts, appliances for new homes, and truck refrigeration units.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
