At its regular open meeting on December 3, 2025, the Arizona Corporation Commission unanimously approved Arizona Public Service Company’s (APS) Second Amended 2024 Demand Side Management Implementation Plan. The plan’s budget was reduced from $91 million to $40 million following an amendment by Chairman Kevin Thompson and further adjustments by Vice Chair Nick Myers, who eliminated additional subsidies.
During the meeting, Vice Chair Myers questioned the effectiveness of energy efficiency (EE) products and expressed concerns about their costs. He stated, “If EE products are so beneficial to customers, why do they need to be mandated and subsidized by other customers? If these EE products are so valuable, customers should want to voluntarily adopt these EE measures at their own cost to reduce their own energy bills. These expenses should not be shifted to other customers.”
Myers highlighted the expense of current programs: “For example, residential EE programs save about 60 MW/year but cost $26.489 million, or about $441,000 per MW/year. Likewise, non-residential EE programs cost about $493,000 per MW/year. DSM comes to about $92,000 per MW/year,” he said. He compared these figures with natural gas generation builds over a 30-year period—including yearly operations and maintenance—which he estimated at around $45,000-88,000 per MW/year.
Despite his skepticism toward many energy efficiency measures, Myers voiced strong support for developing a more comprehensive Virtual Power Plant (VPP) strategy. “Specifically, I want to see APS (and ultimately the other utilities) bring forward a more cohesive Virtual Power Plant strategy—one that possibly consolidates the individual programs we’ve been treating as separate silos,” said Myers. “Right now, we have a Cool Rewards program, a Commercial & Industrial demand response program, storage pilots, and managed EV-charging. Each has value, but they are not functioning as a unified grid resource. They can be and should be.”
He added: “A VPP should not be treated as a niche pilot or a scattered set of incentives. It should operate as a true grid asset—one capable of delivering firm capacity, supporting reliability events, and reducing the pressure on ratepayers to build traditional generation or wires solutions prematurely.” Myers emphasized that with available technology and customer interest—and given Arizona’s load profile—a robust VPP could improve reserve margins and reliability while being less costly than new infrastructure.
The adopted amendment directs APS to evaluate ways to expand its VPP initiatives in its next Demand Side Management Implementation Plan and include analysis of customer compensation.
“So my vote today reflects both my support for the improvements we’ve made to the current DSM plan and my clear expectation that the next filing must take a meaningful step forward,” concluded Myers. “In the coming year, I will be looking for a DSM plan that modernizes these programs, unifies them under a VPP structure, and positions APS to use these distributed assets with fewer artificial limitations and greater operational value to the grid.”
