Phoenix, Ariz. —  The Arizona Corporation Commission voted unanimously during the August 14, 2025 Open Meeting, to direct Staff to take the next step to repeal of the Renewable Energy Standard and Tariff (REST) Rules (A.A.C. Title 14, Chapter 2, Article 18). The rules were established by the Commission in 2006, and require electric utilities to generate a certain percentage of their electricity from renewable resources, reaching 15% by 2025. “The idea that the deployment of renewables in Arizona will come to a halt if REST is repealed is doom and gloom fear-mongering at its worst,” said Chair Thompson. “If renewables are truly the most affordable and reliable option, as we are frequently reminded by advocates, the generational technology should be able to prevail on its own without the need for mandates that have added millions of dollars in extra costs for ratepayers each year.”

Arizona’s two largest regulated electric utilities have already met or exceeded the REST rules requirement.  Arizona Public Service Company (APS) reports about 19% of its energy portfolio contains renewable energy sources in 2024, in 2023 that number was 13%.   Tucson Electric Power Company (TEP)- reports that about 29% its energy portfolio included renewable sources in 2024, in 2023 it was 27%. 

“I believe it’s time for the Commission to move forward and repeal these outdated renewable mandates that have unnecessarily driven up costs for customers,” said Vice Chair Nick Myers. “Utilities should have the flexibility to choose the most cost-effective energy mix to deliver reliable, affordable service—without being burdened by government-imposed rules that ultimately increase costs for customers.”

“As the Commission starts to evaluate rescinding the REST rules, we will be treating all forms of power generation equally and now renewable sources will be able to stand on their own,” said Commissioner Rene’ Lopez.  “I am a strong believer that ALL power generation options should remain and continue to be considered in utilities’ portfolios.  As demonstrated by projects such as the Solana Generating Station, renewable energy mandates unduly burden ratepayers with artificially inflated costs and restricts utilities’ ability to seek the most economical electrical generation while maintaining reliable and affordable service.  I continue to believe that even without the REST Rules, renewable energy is and will continue to be an integral part of Arizona’s diverse energy portfolio going forward.” 

The Commission pointed out the case of the Solana Generating Station near Gila Bend, which went online after the REST rules were put in place.  APS told the Commission it entered a 30-year contract with the facility in 2008, which went online in 2012, and at the time agreed to pay about $0.15 per kWh for energy.  Currently, APS says the average market price for energy purchased through all-source Requests for Proposals (RFPs) is between $0.02 - $0.03 per kWh.  The ACC estimates the REST rules have resulted in approximately $2.3 billion in surcharges on Arizona ratepayers’ bills since 2006.

"Today’s vote is the first step in the repeal of the REST rules that have artificially inflated the cost of energy in Arizona since 2006,” said Commissioner Lea Márquez Peterson. “I’ve heard firsthand from ratepayers across the state about the importance of reliable energy at the most affordable rates. That’s why I support an ‘all of the above approach’ to our energy generation and the use of an all-source RFP.  Our state is seeing an onslaught of data centers and large manufacturing and tech companies who are interested in building in Arizona. Most of them (like Google, Microsoft and Amazon) have their own ambitious clean energy goals and are requesting clean energy generation sources which influence the energy portfolio of the future for our regulated utilities.  Based upon market demands and the low cost of solar, I believe that renewable energy will continue to thrive in Arizona without a renewable energy mandate." 

“I voted to move forward in repealing the renewable energy rules, known as REST rules,” said Commissioner Rachel Walden. “This rule has burdened ratepayers with above-market contracts for renewables, costing them billions of dollars since the rule was put in place in 2006. The Commission requires utilities to utilize all-source requests for proposals to meet their energy needs, which requires them to choose the least cost, most reliable option. By not picking winners and losers and prioritizing the lowest cost, we ensure Arizona residents will have affordable electricity when we need and expect it.”

The Commission Staff must file a Notice of Rulemaking Docket Opening with the Office of Secretary of State by September 19, 2025.  The Commission will hold three public comment sessions regarding the repeal of the REST Rules on November 10, 2025 in Tucson, November 12, 2025 telephonically, and November 13, 2025 in Phoenix. Interested persons may file written comments with the Commission’s Docket Control or attend one of the public comment proceedings.

All documents related to this case can be found in the ACC’s eDocket system at https://edocket.azcc.gov/, Docket No. RE-00000A-24-0026.