The Arizona Corporation Commission has now repealed both of Arizona’s major electric clean-energy rules: the Renewable Energy Standard and Tariff (REST) rules and the Electric Energy Efficiency Standards (EEE) rules.
REST was repealed on March 4, 2026. They repealed the energy efficiency standards last Wednesday.
That means the Commission has now eliminated both sides of Arizona’s clean-energy / energy-efficiency policies: one that pushed utilities to generate more electricity from renewable resources and the other which incentivized utilities to help customers use less electricity in the first place.
Renewable Energy
Arizona’s REST rules were adopted by the Commission back in 2006 when there were actually Commissioners in place that weren’t captured by the utilities. Those former rules required ACC-regulated electricity utilities to increase the amount of renewable energy in their portfolios, ultimately reaching 15% of retail electricity sales from eligible renewable resources by 2025.
Utilities used renewable energy credits to track compliance and were required to file annual plans explaining how they would meet the standard. REST helped push Arizona utilities toward solar, wind, and rooftop generation sources for nearly two decades.
In other words, REST told regulated utilities that renewable energy was required and held them accountable for achieving results.
It worked.
Arizona utilities met the goal a couple of years ago. But instead of updating the rules to incentivize more renewable generation, the ACC’s scrapped the renewable energy standards altogether last March.
The captured Commission’s argument was that REST was outdated because utilities had already met the goal. I see it differently.
The fact that utilities met the goal is evidence that the policy worked. The next logical step should have been to update the standard with a new goal, not throw the whole thing away.
AzPHA submitted formal comments urging the Commission back in March to update rather than repeal REST. We recommended requiring regulated utilities to get at least 25% of their electricity from renewable energy by 2035.
The Commission voted unanimously to repeal the REST standards anyway.
Energy Efficiency
Getting rid of incentives to develop more renewable energy in their portfolios wasn’t enough for the Commission. They wanted to go further and get rid of the energy efficiency incentives too… so last week they voted 4–0 to repeal Arizona’s Electric Energy Efficiency Standards rules (the EEE rules).
EEE was the demand-side companion to REST. REST focused on where electricity comes from. EEE focused on how much electricity homes and businesses use and when they use it. By the way, energy efficiency is far and away the cheapest form of energy.
The EEE rules were adopted in 2010 and made ACC regulated power companies achieve peak-demand reductions via cost-effective energy efficiency, load management, and demand-response programs. The target was a cumulative 22% energy-savings goal by 2020.
EEE helped support utility programs that encouraged customers to reduce energy use, upgrade appliances, improve building efficiency, shift demand away from peak hours, and reduce strain on the grid.
Energy efficiency is the cheapest resource available. The cleanest and least expensive power plant is the one you don’t have to build because customers are using less power in the first place.
The ACC’s repeal of the EEE standard last week doesn’t eliminate every existing energy-efficiency or demand-response program. APS can still propose those programs, and the Commission can still approve them case by case.
But, I’ll bet you dollars to doughnuts APS will abandon all of it in favor of just building more and more methane generation plants (especially if they get their new rates approved and the higher return on equity demand – which they will get).
The Political Problem
Arizona’s utility watchdog is now basically the utilities’ guard dog.
REST and EEE did different things, but they worked together. REST pushed utilities to build cleaner electricity supply. EEE pushed utilities to reduce demand and manage peak load. One policy focused on generation. The other focused on conservation. Both were part of a practical clean-energy strategy.
Both are now gone.
The Commission should have modernized both rules. For REST, that could have meant a new renewable-energy target paired with stronger planning for storage and grid reliability.
For EEE, that could have meant a modernized efficiency standard focused on peak-demand reduction, low-income household benefits, weatherization, smart thermostats, demand response, and cost-effective building upgrades.
Instead, the ACC repealed both. REST ended March 4. EEE ended July 8.
Arizona now has less clean-energy accountability, less long-term certainty, and more dependence on case-by-case utility proposals and the political leanings of the Commission.
Our comments to the Commission on both of these important policies didn’t work (nor did I think they would work).
But at least we were part of the process, and at least the public record now includes a clear argument for why Arizona should update successful clean-energy rules (on both the supply and demand side) rather than repealing them.
