Phoenix, Ariz. —   At the Arizona Corporation Commission’s (ACC) March 4, 2026, Open Meeting, the Commission voted unanimously to approve the repeal of the Renewable Energy Standard and Tariff (REST) Rules, which were adopted by the Commission in 2006.  Since then, the REST Rules have served the purpose of expanding renewable energy production in Arizona.  In the past year, through its approvals of Line Siting projects, this Commission has helped expand Arizona’s renewable energy portfolio. 

The mandates are no longer needed and the costs are no longer justified. Twenty years have passed since the ACC adopted the REST rules.  During that time, APS, TEP, and UNSE have collected more than $2.3 Billion in REST surcharges from all customer classes to meet these mandates.  The renewable energy landscape has changed dramatically in the last two decades.

“Lawmakers and leaders nowadays are making a lot of affordability promises. But promises don’t lower bills — policy does,” said Chairman Nick Myers.  “The Commission took action and made a policy decision that actually eliminates costs, which will result in lower energy bills.”

“There is no disputing that Arizona’s current renewable portfolio is one of the most robust in the country and has the potential to thrive for the foreseeable future,” said Commissioner Kevin Thompson. “While some point to the REST rules as a major impetus for that success, the time has come for the renewable mandate and the customer surcharges that have cost ratepayers billions of dollars to end. Industry must find a way to capitalize on the economics of renewables and demonstrate their reliability without relying upon subsidies or forcing ratepayers to pay for mandates that have outlived their useful life.”

APS, TEP, and UNSE have already met the standards that require electric utilities to generate 15% of their energy from renewable sources by 2025.  The price customers have paid for the various renewable programs is steep. APS, TEP, and UNSE have spent over $779 million on incentives to customers in ACC-approved REST programs. These incentives, paid for by other customers, have resulted in significant financial burden over the years. 

Furthermore, some utilities are saddled with above-market solar contracts that were entered into to comply with the REST Rules, costs which appear in a utility’s purchased power adjustor.   APS customers are paying higher rates because of costly contracts that APS would not have been entered into if not for the REST rules.  For example, APS has paid $1.125 billion for solar power through a 30-year contract entered into in 2013 with Solana power plant.  Under the contract terms, APS customers so far have paid $274.3 million more than the solar power was worth in the market.  Ratepayers will continue to pay above-market prices for at least 17 more years.

The bottom line comes down to affordability.  These REST mandates have unnecessarily driven up costs for customers over the past twenty years by forcing customers to pay for REST incentives and programs and in effect forcing utilities to enter renewable contracts that were not cost-effective.

“The Commission requires an all source Request For Proposal (RFP) when utilities need to serve new load or demand,” said Vice Chair Rachel Walden.  “This ensures the lowest cost, most reliable solutions.  All energy contracts and production must pass a true cost benefit test without the government placing their finger on the scale.”

“The REST Rules are now expired and have served its purpose,” said Commissioner Rene Lopez. “Renewable energy generation is a viable, cost-efficient source of energy and can stand on its own merit without the continuation of the REST Rules.”

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