AriSEIA Submits Comments Opposing Repeal of Arizona's Renewables Rules

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Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007

RE: Rulemaking (RE-00000A-24-0026) — Proposed Modifications to the Renewable Energy Standard and Tariff (REST) Rules

Chairman and Commissioners,

Vote Solar, the Arizona Solar Energy Industries Association (“AriSEIA”), and Solar United Neighbors appreciate the opportunity to provide comments regarding modifications to Arizona Administrative Code (“A.A.C.”) Title 14, Chapter 2, Article 18 (the “REST Rules”). The REST Rules have provided a framework for investment in Arizona’s energy economy for nearly 20 years. Any changes to the REST rules will have broad and profound implications for affordability, economic development, and clean energy investments in Arizona.

Background
The REST has long served as the foundational policy framework guiding clean energy development and investment in Arizona. Implemented by a  majority republican Commission in 2006, the REST established a target for utilities to source 15% of their electricity from renewables by 2025. Bipartisan support for the clear and incremental goals established in the REST rules supported a stable, pro-business environment that has attracted billions in investment, created jobs, and positioned Arizona as a leader in the solar economy. Arizona now ranks 4th in the nation for total solar capacity and 6th in the nation for solar employment, with over 9,700 jobs in the sector.[1]
State energy goals have evolved in the years since the REST was created. Today, 36 states have established clean and renewable standards or goals and 21 states have set target dates for reaching 100% clean energy.[2] As the technology supporting an affordable and reliable transition to clean energy has advanced, state goals have adapted: 12 states now have established energy storage targets.[3] Given Arizona’s considerable progress towards a clean electric grid, it is worthwhile to revisit the REST Rules and evaluate whether changes are warranted to ensure it addresses the challenges that Arizona’s residents, businesses, and utilities face today and remains relevant and useful into the future. However, a wholesale repeal of the REST Rules, as proposed in Staff’s July 31, 2025 Memorandum, will destabilize Arizona’s energy economy and have profound impacts on consumers and businesses across the state. We urge the Commission not to abdicate its responsibility for charting a course towards an affordable, reliable, and clean energy future for Arizona by repealing the REST Rules.

Cost and Affordability
Renewable energy is now the cheapest generation resource available. Solar and wind generation are less expensive than building new fossil fuel plants, but Arizona utilities plan to continue investing in gas plants and running outdated coal plants that lock customers into higher costs for decades. Even when solar is unsubsidized it is the most cost competitive for of electricity generation. Solar is the least cost AND fastest to deploy resource.[4] The levelized cost of a solar plant in Arizona is less than the cost of a new gas plant, in part because solar energy generation has no fuel costs and minimal ongoing operations and maintenance costs. The investments made to meet the REST goals benefit consumers by protecting them from the volatile cost of fossil fuels, especially in recent years, and stabilizing energy prices. Ratepayers have reaped the benefits: according to a 2024 Strategen study, the REST delivered over $1.5 billion in net benefits to the public and more than $469 million in savings to APS and TEP customers.[5]

Press releases and public statements issued by the Commission, such as vote explanations at the February 6, 2024 Open Meeting, include inaccurate or unsubstantiated claims about ratepayer costs from the REST.[6] When evaluating the costs and benefits to ratepayers, it is important to consider not only the capital cost of energy resources built to achieve the REST standards, but also the alternative cost of non-renewable resources that would have been built absent the REST Rules and the long-term savings to ratepayers from the development of renewable energy resources that have no ongoing fuel costs. A fair and balanced analysis must also consider the benefits associated with the lessened health and environmental impacts of renewable resources, which produce no pollution. Without this context, statements about the cost of the REST are meaningless.

State Economic Impacts
The REST Rules created a stable, pro-business environment that has made Arizona a destination for clean energy investment, yielding decades of economic benefits across the state. Renewable energy projects generate substantial lease income, tax revenue and job creation, often in rural communities. For example, a single 200 MW solar + 200 MW storage project in Maricopa County is estimated to yield $26.2 million in tax revenue and $349.7 million in economic activity. A similar project in Yuma County is projected to generate $25.8 million in taxes and $213.4 million in economic benefits, including hundreds of local jobs.[7]

The REST Rules have also provided ancillary economic benefits as businesses that invest in and rely on the clean energy technologies of the future chose to locate in Arizona. According to an analysis by the Western Way, 11 manufacturing and facility expansion projects in the clean energy sector brought $6.1 billion in labor income to the state economy.[8] Over the last year, new or expanded facilities for manufacturing clean energy technologies contributed 2.7% of state GDP.[9] Many of the largest and most successful U.S. companies have 100% renewable energy goals[10] and are actively seeking to do business in states that will facilitate seamless access to clean energy. Large employers such as Meta, Google, Intel, PayPal, and Apple have operations in Arizona that rely on clean energy to meet corporate sustainability goals. LG Energy Solutions and others have cited solar potential as a reason for major investments. Weakening or eliminating the REST undermines Arizona’s competitive advantage in attracting these companies and the jobs they bring.

Disinvestment in Arizona’s Energy Future
Without the guiding goals set by the REST, Arizona’s utilities may not make investments in the renewable energy resources needed to support a clean, affordable, and reliable grid in years to come. Having largely achieved the modest 15% renewable energy goal set by the REST, Arizona’s utilities are not committing to scale development of renewable energy resources to continue meeting or exceeding this goal as load growth accelerates. Recent integrated resource plans outline a continued reliance on fossil fuel resources, including the conversion of coal plants to gas and the extension of coal plant operations, and APS recently abandoned its near-term clean energy targets and delayed retirement of coal plants it previously determined are no longer economic for customers.[11] APS currently reports only 19% of its energy mix from renewables,[12] and TEP stands at 22%.[13] These figures fall short of the 15% threshold when considering growth expectations and cast doubt on assertions that the standard is no longer necessary.

The repeal of the REST Rule also sends a destabilizing signal to investors, developers, and corporate buyers who are considering energy development projects in the state. It suggests Arizona may no longer be a reliable place to conduct business in clean energy, especially as neighboring states pursue more ambitious goals. The impact is already visible: counties such as Yavapai[14] and Mohave[15] are considering or enacting de facto moratoriums or extreme caps on solar development, often citing the repeal of the REST as justification. In a state with just 15 counties, this trend introduces barriers and red tape that slow progress towards the grid of the future, posing serious risks to grid affordability, reliability, and energy independence.

Certainty in the Market for  Renewable Energy Credit (RECs)
The REST Rules are the only policy framework clearly defining RECs in Arizona, and the regulatory claim to renewable energy usage that RECs represent. RECs are the fundamental tool that entities with clean energy goals use to track compliance with clean energy targets and ensure they have secured a valid claim to clean energy. Put simply, RECs protect entities looking to access clean energy from misleading claims, greenwashing, and fraud. Without a clear, enforceable definition of RECs in A.A.C there is no reliable mechanism to ensure renewable generation is properly accounted for or that it can be uniquely attributed. This opens the door to double counting, where RECs generated in Arizona are counted towards multiple purposes because there is no clear definition. As a result, states, federal entities, or companies with clean energy goals may choose to avoid purchase of RECs from Arizona (and third-party certification providers may be unwilling to recognize them), which will further disincentivize investment in new clean energy resources across the state.

Deficiencies Identified in Staff’s July 31, 2025 Memorandum
Staff’s July 31, 2025 Memorandum recommends repealing the REST Rules without providing any substantive information about how this change would impact consumers and the economy, the costs and benefits, or why a repeal of the REST is necessary or even desirable. Most concerning, Staff’s Memorandum includes only a passing reference to the comments filed by nearly 30,000 members of the public. The overwhelming majority of the public’s comments are supportive of maintaining the REST in its current form or expanding state renewable energy goals.
While we respect Elliott Pollack & Co., whose work we also rely upon, the economic memorandum filed by Staff on August 21, 2024, contains no quantitative analysis. It also fails to identify industry stakeholders or their employees as affected parties, despite the clear implications for both.

Conclusion
We strongly urge the Commission to reject Staff’s Memorandum. Instead, we suggest that the Commission revisit previous efforts to modernize the REST Rules to reflect Arizona’s current opportunities, technological advancements, and economic goals, as reflected in Docket RU-00000A-18-0284.

This is a pivotal moment for Arizona’s clean energy leadership. Eliminating the state’s only enforceable renewable energy standard, without a clear replacement, introduces uncertainty, undermines accountability, and jeopardizes both voluntary and regulatory progress. Further, repealing a rule without substantive support in the record is arbitrary and capricious. We urge the Commission to retain the REST and use it as a foundation for building Arizona’s energy future.
Thank you for your consideration.

Respectfully,
Autumn T. Johnson
Executive Director
Arizona Solar Energy Industries Association (AriSEIA)
[email protected]
520-240-4757

Adrian Keller
Arizona Program Director
Solar United Neighbors (SUN)
[email protected]
602-610-9055

Kate Bowman
Interior West Regulatory Director
Vote Solar
[email protected]
703-674-8637

[1] Solar Energy Industries Association (SEIA), Arizona Solar State Spotlight, June 2025, available here https://seia.org/wp-content/uploads/2025/06/Arizona.pdf.

[2] Database of State Incentives for Renewables and Efficiency (DSIRE), Renewable and Clean Energy Standards, April 2025, available here https://ncsolarcen-prod.s3.amazonaws.com/wp-content/uploads/2025/04/RPS-CES-April2025.pdf

[3] Database of State Incentives for Renewables and Efficiency (DSIRE), Energy Storage Targets, September 2024, available here https://ncsolarcen-prod.s3.amazonaws.com/wp-content/uploads/2024/09/DSIRE_Storage_Targets_September_2024.pdf

[4] Lazard LCOE, June 2025, available here https://www.lazard.com/news-announcements/lazard-releases-2025-levelized-cost-of-energyplus-report-pr/.

[5] Strategen, Arizona REST 2020 Progress Report, Mar. 3, 2020, available here https://www.ceres.org/resources/reports/arizona-renewable-energy-standard-and-tariff-2020-progress-report.

[6] Arizona Corporation Commission, ACC Directs Staff to Draft Rules to Repeal Renewable and Energy Efficiency Mandates, February 2024 available here https://www.azcc.gov/news/home/2024/02/07/acc-directs-staff-to-draft-rules-to-repeal-renewable-and-energy-efficiency-mandates
Arizona Corporation Commission, Chairman O’Connor and Commissioner Thompson Act to Sunset Energy Surcharges that Have Cost Arizona Ratepayers Nearly $3.4 Billion Dollars, February 2024, available here https://www.azcc.gov/news/home/2024/02/08/chairman-o-connor-and-commissioner-thompson-act-to-sunset-energy-surcharges-that-have-cost-arizona-ratepayers-nearly-3.4-billion-dollars.

[7] AriSEIA submitted over 450 pages of studies supporting the economics of renewables in Arizona. All such studies, including our county economic impact studies can be found with our October 1, 2024 comments filed in this docket, available here https://docket.images.azcc.gov/E000038867.pdf?i=1754888599487.

[8] The Western Way: Arizona’s Pro-Business Climate Drives New Jobs and Workforce Needs, available here https://www.thewesternway.org/tww-blog/2023/11/2/report-release-arizonas-pro-business-climate-drives-new-jobs-and-workforce-needs.

[9] Rhodium Group & MIT CEEPR, Clean Investment Monitor Database. Available at: https://www.cleaninvestmentmonitor.org/database.

[10] See Re100 members, Available at: https://www.there100.org/re100-members.

[11] AZ Central, APS to walk back clean energy goals, drawing criticism from environmentalists, available here https://www.azcentral.com/story/money/business/energy/2025/08/07/arizona-utility-will-walk-back-its-clean-energy-goals/85534895007/.

[12] APS SEC Form 10-K, December 31, 2024, P.5, available here https://d18rn0p25nwr6d.cloudfront.net/CIK-0000764622/4703b2d6-ddea-44b3-85bf-ef9814d7d691.pdf.  

[13] TEP 2024 Energy Mix, available here https://www.tep.com/our-energy-mix/.

[14] Yavapai County Planning & Zoning Ordinance, Section 608.

[15] Mohave County Ordinance No. 2024-10.