In a 5-0 vote to finalize its repeal of the Renewable Energy Standard and Tariff Rules, the Arizona Corporation Commission began the process of repealing the renewable mandates.
The Commission adopted the Renewable Energy Standard and Tariff Rules (REST rules) in 2006, requiring electric utilities to obtain a certain percentage of retail electric sales from renewable resources with a percentage of such annual requirement coming from rooftop solar resources.
The mandates began at 1.25% in 2006, increasing gradually to 15% after 2024. Further, the mandates required that utilities satisfy a rooftop solar requirement as a portion of a utility’s annual renewable energy requirement, starting with 5% in 2007 and increasing to 30% after 2011.
APS, TEP, and UNSE have collected $2.3 billion in REST surcharges from all customer classes and have spent over $779 million on incentives, at the expense of other customers. These amounts do not include above-market amounts paid out to rooftop solar customers under net metering and the current RCP approach.
These mandates have also forced utilities to enter above-market contracts, resulting in significant financial burden for ratepayers. For example, APS customers have so far paid $274.3 million above market cost for power from the Solana solar power plant. In 2024, APS customers paid Solana 15 cents per kWh, when the market price for solar was 2.5 cents per kWh. APS customers continue to pay this above market cost and will continue to do so through 2043. In its 2024 REST filing, APS reported $39 million in above-market REST-attributable energy costs. This is just in one year.
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