At its regular open meeting on March 4, 2026, the Arizona Corporation Commission (ACC) voted unanimously to repeal the Renewable Energy Standard and Tariff Rules (REST rules), which have been in place since 2006. Chairman Nick Myers joined the other commissioners in supporting the decision, finalizing a process that began in January 2024.
“I believe it’s time to repeal these outdated renewable mandates that have unnecessarily increased costs for ratepayers over the past 20 years,” stated Chairman Myers.
The REST rules required electric utilities to obtain a certain percentage of their retail electric sales from renewable resources. The initial mandate started at 1.25% in 2006 and gradually increased to 15% after 2024. Utilities were also required to ensure a portion of this energy came from rooftop solar, starting at 5% in 2007 and rising to 30% after 2011.
Chairman Myers noted that major utilities—APS, TEP, and UNSE—have met or exceeded these requirements in recent years. He said they are now obligated to conduct all-source requests for proposals (RFPs) to select cost-effective and reliable resource mixes. “The reality is that the renewable energy landscape in Arizona has changed dramatically in the past 20 years,” Myers said.
Since implementation, APS, TEP, and UNSE have collected $2.3 billion through REST surcharges across all customer classes and spent over $779 million on incentives for renewables. These figures do not include additional payments made above market rates under net metering programs or current compensation approaches for rooftop solar customers.
Utilities have also entered into contracts with prices above prevailing market rates as a result of these mandates. For example, APS customers have paid $274.3 million above market cost for electricity from the Solana solar power plant so far. In 2024 alone, APS customers paid Solana an average of 15 cents per kilowatt-hour while the market price was only about 2.5 cents per kilowatt-hour; this arrangement is set to continue until at least 2043. According to APS’s most recent filing under REST rules, $39 million of above-market costs were reported just last year.
“For years, we have recognized that when it comes to electric generation, an all-of-the-above strategy—one that secures a cost-effective, reliable mix of resources through competitive all-source RFPs—is the superior approach,” concluded Chairman Myers. “It’s time to modernize our energy policy to reflect today’s evolving energy landscape—not the realities of two decades ago.”
For further information regarding this decision or future ACC actions on energy policy changes, contact Chairman Myers at myers-web@azcc.gov.
