Arizona Commission Advances Repeal of Renewable Energy Standard

The Arizona Corporation Commission on Aug. 14 voted unanimously to begin the process for repealing the Renewable Energy Standard and Tariff, or REST, rules. Established in 2006, the rules require the state’s electric utilities to source a certain percent of their electricity from renewable energy resources, reaching 15 percent by 2025.

The state’s two largest regulated electric utilities have met or exceeded the renewable energy requirement under the rules. Arizona Public Service Company reported that renewables accounted for about 19 percent of its energy mix in 2024, compared with 13 percent in 2023. Tucson Electric Power Company reported that about 29 percent of its portfolio included renewables in 2024, compared with 27 percent in 2023.

The commission cited Solana Generating Station, a concentrating solar power plant near Gila Bend, as a case study showing how the REST rules forced utilities into long, high-cost renewable contracts that are now far above market prices. The facility became operational after the adoption of the REST rules. Arizona Public Service had entered into a 30-year contract with the facility in 2013, agreeing to pay about $0.15 per kWh for energy. By comparison, the current average market price for energy purchased via all-source requests for proposals ranges from $0.02 to $0.03 per kWh, according to the company. The commission estimates that implementation of the REST rules has imposed approximately $2.3 billion in surcharges on Arizona ratepayers since 2006.

Commission staff is required to file a notice of rulemaking with the Office of Secretary of State by Sept. 19, 2025. The commission will hold public comment sessions regarding the repeal of the REST rules from Nov. 10-13.