Arizona deserves a transparent resource planning process, especially when major generation investments could shape the state's energy mix for decades.

Just weeks after APS testified in its rate case that it did not have a definitive plan for the future of the Cholla Power Plant, the utility announced it plans to convert the facility to natural gas.

Today, AriSEIA filed supplemental questions seeking answers about when that decision was made, what alternatives were considered, and whether renewable energy and energy storage were fully evaluated alongside the proposed gas conversion. The questions also seek information about the project's costs, supporting analyses, and how the decision relates to APS' ongoing Integrated Resource Plan.
​
As Arizona continues to experience rapid load growth, it is critical that utilities evaluate all available resources on a level playing field. Customers and stakeholders deserve confidence that major investment decisions are based on transparent analysis, sound economics, and a fair comparison of all available energy options.

AriSEIA has joined a motion asking the Administrative Law Judge to reconsider the admission of a report that claims solar energy is expensive and unreliable, arguing that the document lacks a disclosed methodology, was not authored by the sponsoring witness, and directly conflicts with substantial evidence already in the record.

The report, offered by the Arizona Free Enterprise Club, is a policy brief published by the Heartland Institute. Although the witness who sponsored the exhibit cited it in his testimony, he acknowledged during cross-examination that he did not write the report, did not develop its scoring system, and could not explain the methodology used to reach its conclusions.

The publication presents itself as an "objective scorecard" comparing different electric generation technologies. It assigns numerical scores to resources such as solar, wind, coal, natural gas, and nuclear, concluding that solar is among the least affordable and least reliable generation resources. However, the report contains no methodology explaining how those scores were calculated, how competing factors were weighted, or how the numerical rankings were derived.

AriSEIA's filing argues that unsupported conclusions should not be admitted for the truth of the matters asserted simply because they appear in a published report. Instead, parties should be required to demonstrate the analytical basis for factual claims that are central to issues being litigated before the Arizona Corporation Commission.

The filing also notes that the report's conclusions are inconsistent with other evidence already admitted into the case, including APS's own long-term resource planning and nationally recognized cost analyses showing that renewable energy continues to be among the most cost-competitive options for new electric generation.

Administrative proceedings often operate under more flexible evidentiary standards than traditional court proceedings. Even so, those standards do not eliminate the need for reliable evidence. When a publication presents factual conclusions without explaining how those conclusions were reached, and the sponsoring witness cannot explain or defend the underlying analysis, the Commission should carefully consider whether the exhibit deserves any evidentiary weight.
​
As Arizona continues to make long-term decisions about reliability, affordability, and the future of the electric grid, those decisions should be based on transparent analysis, sound methodology, and credible evidence—not unsupported scorecards.

Today, AriSEIA filed a motion asking the Arizona Corporation Commission's Administrative Law Judge to recall APS Chief Operating Officer Jacob Tetlow for limited additional cross-examination.

During the APS rate case hearing on May 26, AriSEIA questioned Mr. Tetlow about APS's plans for the Cholla Power Plant after its coal units retire. Mr. Tetlow testified that APS did not have a definitive plan for the site, that multiple options remained under consideration, and that it was too early for a stakeholder process regarding the plant's future.
On July 2, however, APS announced plans to convert the Cholla Power Plant to natural gas.
​
Because the announcement came while the rate case hearing is still underway and concerns the same subject addressed during Mr. Tetlow's testimony, AriSEIA has asked that he be recalled to answer limited questions about when APS made this decision, what planning had already occurred at the time of his testimony, and how the project fits within APS's resource planning process.

The Arizona Court of Appeals recently vacated the solar-specific charges adopted in APS's 2022 rate case, concluding that they were imposed without providing customers and stakeholders the due process required under Arizona law.
​
While the Court did not decide whether the Grid Access Charge (GAC) and Legacy Solar Rate Increase (LSRI) are substantively lawful, its decision reinforces what AriSEIA has consistently argued throughout the current APS rate case: APS has failed to demonstrate that residential solar customers impose unique costs that justify discriminatory solar-specific charges.

In response to the Court's decision, AriSEIA has recommended that the Arizona Corporation Commission:

• Reject any proposal to increase the GAC or LSRI in the current APS rate case.
• Eliminate both charges based on the existing evidentiary record.
• Decline to reopen the record or create a second phase to give APS another opportunity to justify the charges.
• Reserve only the question of potential customer refunds until the appellate process is complete, if necessary.

APS has argued that the Court's decision should have little impact on the current rate case. AriSEIA agrees that this case should be decided on its own evidentiary record. The difference is that AriSEIA believes the record demonstrates that the solar charges should be eliminated, not increased.

The evidence presented in this case shows that APS has again failed to identify unique costs associated with serving residential solar customers. APS's own witnesses acknowledged that resource adequacy planning is conducted on a system-wide basis for the benefit of all customers, not solely rooftop solar customers. AriSEIA witness Kevin Lucas also identified significant methodological flaws in APS's site-load Cost of Service Study, demonstrating that it does not provide a reliable basis for discriminatory solar-specific charges.

APS has also requested that, if necessary, the Commission postpone deciding the future of the solar charges by creating a second phase of the rate case. AriSEIA opposes that request. APS filed this rate case knowing the Court of Appeals challenge was pending and chose the evidence and methodology it presented. The Commission already has the evidence necessary to decide the issue, and delaying resolution would unnecessarily prolong the case while giving APS another opportunity to justify charges it has not supported.
​
AriSEIA will continue advocating for fair, evidence-based ratemaking and equal treatment of Arizona's rooftop solar customers throughout the remainder of the APS rate case.

AriSEIA has filed supplemental testimony in the Arizona Public Service (APS) rate case, due to factually inaccurate statements made by several APS witnesses on the stand after AriSEIA's witness, Kevin Lucas, testified. We had requested to move him after the conclusion of the APS witnesses, but APS objected. We have indicated our intention to recall Mr. Lucas to discuss these issues.

Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007
 
RE: IRP Docket No. E-99999A-25-0058, Response to Staff’s June 23, 2026 Memo
 
Chairman and Commissioners,
 
The Arizona Solar Energy Industries Association ("AriSEIA") supports the Utilities Division Staff's recommendation to amend Decision No. 80699 to extend the Integrated Resource Plan ("IRP") filing schedule and establish a February 10, 2027 deadline for stakeholder comments and stakeholder deliverables.
 
AriSEIA also appreciates Staff's recommendation that the revised IRP schedule apply uniformly to all Commission-regulated electric utilities required to file IRPs. A consistent statewide schedule promotes administrative efficiency, reduces unnecessary scheduling conflicts, and allows stakeholders that participate across multiple IRP proceedings to more effectively allocate their resources.
 
AriSEIA respectfully requests one clarification to the proposed order. While Staff recommends that all Commission-regulated electric utilities follow the timeline set forth in Table 2, Table 2 itself is drafted using APS-specific references, including "APS Files IRP" and "APS Response to Stakeholder Comments." As a result, it is not clear that the February 10, 2027 deadlines for stakeholder comments and stakeholder deliverables apply to all Commission-regulated electric utilities required to file IRPs. Because stakeholders submit comments to each utility's IRP, AriSEIA respectfully requests that the Commission expressly clarify that stakeholders may submit comments and stakeholder deliverables for each Commission-regulated electric utility's IRP on or before February 10, 2027.
 
Accordingly, AriSEIA respectfully requests that Ordering Paragraph 1 be revised as follows:
 
IT IS THEREFORE ORDERED that Decision No. 80699 is hereby amended to adopt the Integrated Resource Plan timeline for all Commission-regulated electric utilities that are required to file an Integrated Resource Plan as detailed in Finding of Fact No. 6, Table 2. The February 10, 2027 deadlines for stakeholder comments and stakeholder deliverables shall apply to each Commission-regulated electric utility required to file an Integrated Resource Plan.
 
Subject to that clarification, AriSEIA supports Staff's recommendation.
 
Respectfully,
/s/ Autumn T. Johnson
Executive Director
AriSEIA 
(520) 240-4757
[email protected]

Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007
 
RE: RE-00000A-24-0025 Exceptions to the June 11, 2026 Recommended Order
 
Chairman and Commissioners,
 
The Arizona Solar Energy Industries Association ("AriSEIA") respectfully submits these comments in opposition to the Recommended Order ("ROO") recommending repeal of the Electric Energy Efficiency Standards Rules ("EEE Rules").

The record developed in this rulemaking does not support the conclusion that repeal of the EEE Rules is reasonable, necessary, or in the public interest. To the contrary, the record demonstrates that energy efficiency ("EE") and demand-side management ("DSM") programs continue to provide significant benefits to Arizona utilities, Arizona ratepayers, and the electric grid. The record further demonstrates that affected utilities continue to rely on EE and DSM as valuable planning resources and continue to achieve measurable energy savings, peak demand reductions, and reliability benefits through those programs.

The issue before the Commission is not whether the EEE Rules have been successful. The record overwhelmingly demonstrates that they have. The ROO’s own data shows that APS recorded DSM program costs of $941,563,758 and DSM net benefits of $1,432,000,000 from 2005 through 2024. ROO ¶ 40. Staff itself stated at the oral proceeding that it did not believe EE programs would cease after repeal because “the programs offer many benefits, so utilities and their customers will want the programs to continue.” ROO ¶ 40. Nor is the issue whether individual provisions of the rules could be improved or modernized. Rather, the question is whether the record supports eliminating the EEE Rules in their entirety. The ROO does not identify substantial evidence demonstrating that repeal of the EEE Rules is preferable to amendment, modernization, or replacement of specific provisions. Instead, the ROO largely relies upon policy preferences expressed by Commissioners during Open Meetings while failing to adequately address the substantial evidence demonstrating the continued value of EE and DSM programs.

For these reasons, the Commission should reject the ROO and decline to repeal the EEE Rules.
 
I. The Commission Should Update the EEE Rules Rather Than Repeal Them
AriSEIA does not contend that the EEE Rules are incapable of improvement. The electric industry has changed significantly since the rules were adopted in 2010. New technologies, new customer programs, and new grid needs have emerged. As a result, certain provisions of the EEE Rules may warrant revision or modernization.

The existence of potential improvements, however, does not support repealing the rules in their entirety. The question before the Commission is not whether the EEE Rules should remain frozen in their 2010 form. Rather, the question is whether the record supports eliminating the entire regulatory framework governing EE and DSM programs. The record does not support that conclusion.

One of the most significant consequences of repeal would be the elimination of the existing framework governing DSM implementation plans. The EEE Rules currently establish requirements for utilities to file implementation plans and annual reports and provide a structure through which the Commission reviews and oversees DSM programs. See A.A.C. § R14-2-2405; R14-2-2407.

The ROO does not explain what framework will replace those requirements if the EEE Rules are repealed. Nor does the ROO explain how utilities will be expected to propose future DSM programs or under what standards the Commission will evaluate those filings. The absence of any replacement framework creates unnecessary uncertainty for utilities, stakeholders, and the Commission itself.

This concern is particularly important because the Commission continues to recognize the value of DSM programs. In recent years, the Commission has repeatedly approved DSM programs and has specifically approved and reaffirmed Virtual Power Plant ("VPP") programs. The Commission's recent approval of VPP and other demand-side programs demonstrates that DSM resources remain an important component of Arizona utility planning and resource management. These programs are increasingly important tools for reducing peak demand, improving grid reliability, and providing value to customers and the electric system.

Indeed, the Commission has recently approved VPP programs on multiple occasions and utilities continue to include VPPs and other DSM resources within their DSM portfolios. Yet the ROO would eliminate the very rule framework through which those programs are planned, proposed, reviewed, and monitored. The ROO does not explain how future DSM plans containing VPP programs will be filed, reviewed, or evaluated if the existing rules are repealed.

The ROO repeatedly characterizes the EEE Rules as having "expired" in 2020. See, e.g., ROO ¶ 4. The ROO itself, in footnote 19, acknowledges that this characterization is “potentially misleading” and that the EEE Rules “are still in effect.” Staff confirmed at the December 4, 2025 oral proceeding that the rules have not expired, and Staff was required to correct the record in writing on this point. ROO ¶ 71.  That characterization conflates the expiration of the numerical EE savings target with the remainder of the rule. While the original savings target concluded in 2020, the provisions governing DSM implementation plans, reporting, program review, cost-effectiveness requirements, monitoring, evaluation, and Commission oversight remained in effect. Utilities continue to file DSM plans and the Commission continues to review and approve DSM programs pursuant to that framework. The expiration of a single target does not establish that the remainder of the framework should be repealed.

The continued development of VPPs and other innovative DSM programs requires regulatory certainty. Utilities need to understand what information must be included in their filings. Stakeholders need to understand how proposed programs will be reviewed. The Commission needs a consistent framework through which it can evaluate program performance and determine whether proposed programs are in the public interest.

Repealing the EEE Rules would eliminate that framework without replacing it with an alternative. Nothing in the record demonstrates that such uncertainty would benefit ratepayers or improve regulatory outcomes. To the contrary, the record demonstrates that DSM programs continue to play an important role in utility planning and grid operations.

If the Commission concludes that revisions to the EEE Rules are warranted, the appropriate course is to amend and modernize the rules rather than repeal them. At a minimum, the Commission should preserve the provisions governing DSM implementation plans and related reporting and oversight requirements. Doing so would allow the Commission to modernize outdated provisions while maintaining a clear framework for continued development of DSM and VPP programs.

II. The Record Demonstrates That EE and DSM Programs Continue to Provide Significant Benefits
The record developed in this proceeding demonstrates that EE and DSM programs continue to provide substantial benefits to Arizona utilities, customers, and the electric grid. While the ROO recommends repeal of the EEE Rules, the evidence cited throughout the record largely confirms the continued value of the programs and resources developed under those rules.

The Commission originally adopted the EEE Rules after finding that EE is a reliable and cost-effective resource that reduces load growth, improves system reliability, lowers costs for customers, reduces the need for additional infrastructure investment, and assists the Commission in ensuring safe, adequate, and reliable service at just and reasonable rates. Decision No. 71819 at 11-15. The ROO acknowledges those findings and reproduces them at length. ROO ¶¶ 24-30.

Importantly, the ROO does not identify evidence demonstrating that those benefits no longer exist. Nor does the ROO conclude that EE and DSM programs have failed to produce the outcomes that the Commission anticipated when it adopted the rules.

To the contrary, the record demonstrates that EE and DSM programs continue to produce measurable results. The updated Economic Impact Statement ("EIS") reports that APS has achieved more than 1,740 MW of cumulative peak demand savings through EE programs since 2005. The EIS further reports that TEP's DSM programs have delivered approximately 604.78 MW of capacity savings and 1.73 million MWh of energy savings since 2015. Exhibit C, Updated EIS at 3.

These are not theoretical benefits. They are measurable reductions in energy usage and peak demand achieved through programs implemented under the framework established by the EEE Rules. The EIS further recognizes that these investments contribute to utility resource planning, grid reliability, and peak demand reduction. Updated EIS at 3.

The EIS also acknowledges that utilities continue to view EE and DSM resources as valuable components of their planning portfolios. TEP's Smart Rewards program reportedly provides between 20 MW and 30 MW of first-hour peak demand reduction, while the utility has also launched a Storage Rewards program designed to leverage customer-sited battery storage to support grid reliability. Updated EIS at 3. These programs reflect the evolution of DSM resources and demonstrate why a regulatory framework governing DSM planning and oversight remains important today.

The record further demonstrates that repeal carries risks. The EIS concludes that repeal may result in reduced investment in EE programs, uneven program availability among utilities, diminished access to programs for low- and moderate-income customers, and higher long-term utility bills resulting from reduced energy savings opportunities. Updated EIS at 5. The EIS further recognizes that customers will continue to benefit from EE improvements already installed through programs developed under the existing framework. Id.

Taken together, the evidence demonstrates that EE and DSM programs continue to provide meaningful benefits and continue to serve many of the same purposes identified by the Commission when it adopted the EEE Rules. The record therefore does not support the conclusion that the framework should be repealed in its entirety. Rather, the evidence supports updating and modernizing the rules to reflect current technologies and utility needs while preserving the benefits that EE and DSM programs continue to provide.

III. The ROO Fails to Demonstrate Why Complete Repeal Is Warranted
A central flaw in the ROO is that it never adequately explains why complete repeal of the EEE Rules is warranted based on the record developed in this proceeding.

Throughout the rulemaking, concerns were raised regarding the structure of the EEE Rules, the expiration of the original EE standards, the design of certain programs, and the costs associated with particular program offerings. Even assuming those concerns are valid, they do not establish that the entire rule should be repealed. Rather, they suggest that certain provisions may warrant amendment or modernization.

The ROO acknowledges that the original EE standards expired in 2020 and that utilities may continue to pursue EE and DSM programs even in the absence of those standards. ROO ¶ 4. Yet the ROO never explains why the expiration of the original savings targets requires elimination of the remainder of the regulatory framework.

As discussed above, the ROO incorrectly conflates the expiration of the numerical EE savings target with the continued operation of the remainder of the EEE Rules. The expiration of the original savings target does not establish that the remainder of the framework should be repealed.

The existing rules address far more than annual savings targets. As the ROO itself recognizes, the EEE Rules establish requirements relating to DSM implementation plans, Commission review of DSM programs, cost-effectiveness standards, reporting requirements, monitoring and evaluation, and related oversight mechanisms. ROO ¶ 22. The ROO does not explain why these provisions should be eliminated or identify evidence demonstrating that they are no longer serving a useful purpose.

Similarly, the ROO repeatedly references statements made during Commission Open Meetings expressing concern regarding particular EE programs, rebates, incentives, or implementation practices. ROO ¶ 33. However, concerns regarding individual program designs do not establish that the entire regulatory framework should be repealed. If certain programs are not cost-effective, the Commission can reject them. If certain provisions require revision, the Commission can amend them. The record does not demonstrate why repeal of the entire Article is the appropriate response.

When the Commission adopted the EEE Rules, it found that EE reduced costs, improved reliability, reduced infrastructure needs, lowered adverse environmental impacts, and was reasonably necessary to help ensure safe, adequate, and reliable service at just and reasonable rates. Decision No. 71819 at 11-15; ROO ¶¶ 24-30. The ROO does not identify comparable findings demonstrating that these conclusions are no longer valid. Nor does the ROO identify changed circumstances sufficient to justify eliminating the framework rather than updating it. The ROO’s sole explanation is that its “changed position… is rational based on the factual conclusions made herein, and the Commission’s action in repealing the EEE Rules is neither arbitrary nor capricious based on its conclusions.” ROO ¶ 62. A bare assertion that agency action is not arbitrary does not substitute for reasoned explanation of why prior findings are being reversed. Where an agency departs from prior factual conclusions, it must provide more than a conclusory statement that its new position is rational.

The Commission is not limited to a choice between preserving every aspect of the existing rules and eliminating the rules entirely. Indeed, rulemaking exists precisely because regulations may be amended as circumstances change. Yet the ROO contains little discussion of whether targeted amendments could address the concerns identified during this proceeding while preserving the portions of the rules that continue to provide value.

The absence of such analysis is particularly notable given the substantial evidence demonstrating that EE and DSM programs continue to provide measurable benefits. As discussed above, the EIS acknowledges ongoing energy savings, capacity savings, peak demand reductions, and reliability benefits associated with these programs. Updated EIS at 3. The EIS also identifies potential negative consequences associated with repeal. Updated EIS at 5. The ROO never adequately explains why those benefits should be disregarded or why the identified risks are outweighed by the benefits of repeal.

The Commission may reasonably conclude that the EEE Rules should evolve to reflect current market conditions, emerging technologies, and changing utility needs. The record, however, does not support the conclusion that complete repeal is the only available option or the option most consistent with the public interest. The record instead supports updating and modernizing the rules while preserving the portions of the framework that continue to provide meaningful benefits to utilities and ratepayers.

For these reasons, the Commission should reject the recommendation for complete repeal and instead pursue targeted revisions to the EEE Rules.

IV. The ROO Relies Heavily on Policy Preferences and Extra-Record Public Statements While Failing to Address Contrary Evidence
The ROO devotes substantial discussion to Commissioner statements, Commission press releases, and a guest commentary published in the Arizona Capitol Times. ROO ¶¶ 33, 35-39, 45-46. Those materials include broad policy statements regarding subsidies, cost shifts, “free” programs, “slush funds,” “special interests,” and the asserted need to repeal outdated mandates. ROO ¶¶ 35-39, 45-46.

Those materials are not a substitute for record evidence demonstrating that complete repeal of the EEE Rules is reasonable, necessary, or in the public interest. AriSEIA does not dispute that Commissioners may express policy views regarding EE and DSM programs. The problem is that the ROO appears to give substantial weight to press releases, public statements, and opinion commentary rather than grounding the recommendation in the evidence developed through this rulemaking.

That distinction matters. The purpose of a rulemaking record is to provide a transparent basis for agency action and to allow stakeholders to review and respond to the information on which the agency relies. Press releases and opinion commentary are advocacy materials. They are not evidence demonstrating that the EEE Rules should be repealed in their entirety.

The record contains substantial evidence demonstrating that EE and DSM programs continue to provide measurable benefits, including energy savings, peak demand reductions, reliability benefits, and customer savings. Updated EIS at 3; ROO ¶¶ 40, 43-44. The ROO also acknowledges that the Commission has recently approved DSM programs, including programs related to demand response and Virtual Power Plants. ROO ¶¶ 45-47. The ROO further relies on data drawn from APS and TEP Annual Progress Reports, the Commission’s own EIS, and utility IRP filings — yet Finding of Fact ¶ 89 states that “the Commission did not rely on or consider any study in its evaluation of or justification for the proposed repeal.” This is internally inconsistent. The Commission’s own Rules Review Procedure requires that the preamble “includes a reference to any study relevant to the rules that the Commission considered and either did or did not rely on.” Decision No. 78544 at 6 (Att. A). The Commission cannot simultaneously build its factual record on program data reports and claim to have considered no studies.

The ROO further acknowledges that the overwhelming majority of comments filed in this proceeding opposed repeal. Staff reported that 1,891 individuals filed or signed comments opposing repeal, while only 6 individuals filed comments supporting repeal. ROO ¶ 11. Numerous businesses, local governments, educational institutions, consumer advocates, environmental organizations, health organizations, utilities, and other stakeholders likewise opposed repeal. ROO ¶¶ 11, 19. While the Commission is not obligated to follow the majority view expressed in public comments, the volume and consistency of opposition demonstrates that significant concerns were raised regarding the consequences of repeal. Yet despite the volume of comments and evidence submitted, the ROO ultimately does not explain why the documented benefits of EE and DSM programs are outweighed by the asserted benefits of repeal.

The existence of widespread opposition does not require the Commission to reach a particular result. However, where the record contains extensive evidence and stakeholder input supporting continued EE and DSM programs, the Commission should meaningfully address that evidence and explain why it is unpersuasive. Simply cataloging comments, then relying on public statements and press releases favoring repeal, does not adequately explain why complete repeal is warranted.

Several of the concerns repeated in the ROO relate to particular program designs, incentives, rebates, or implementation decisions. ROO ¶¶ 33, 35-39, 45-46. Those concerns may support revisions to specific rules or greater scrutiny of individual DSM programs. They do not support eliminating the entire regulatory framework, particularly where the same ROO recognizes that DSM and VPP programs continue to provide value and should continue to be available. ROO ¶¶ 45-47.

For these reasons, the Commission should not adopt a ROO that devotes substantial attention to press releases, public statements, and opinion commentary while failing to adequately address contrary evidence in the record. The appropriate course is to update and modernize the EEE Rules, not repeal them.
 
V. The Commission Cannot Bypass Attorney General Certification on the Contested Claim That This Repeal Is Wholly Authorized by Its Exclusive Ratemaking Authority
The ROO concludes that this repeal “is wholly authorized by the Commission’s exclusive and plenary constitutional ratemaking authority under Arizona Constitution Article 15, § 3” and on that basis declines to submit the rulemaking to the Office of the Attorney General for review and certification under A.R.S. § 41-1044. ROO ¶ 61, 94-95; Conclusions of Law ¶ 3. That determination is legally untenable and exposes the repeal to challenge.

The ROO itself acknowledges the problem. In Finding of Fact ¶ 52, the ROO states that the Arizona Supreme Court’s 2020 decision in Johnson Utilities, L.L.C. v. Arizona Corporation Commission, 249 Ariz. 215 (2020) (“Johnson”), “suggests that the Arizona Supreme Court, if asked, may not view the EEE Rules as having been wholly authorized by the Commission’s constitutional ratemaking authority.” ROO ¶ 52. The ROO further acknowledges that the Johnson Court characterized as “flawed” the prior holding in Arizona Corporation Commission v. State ex rel. Woods, 171 Ariz. 286 (1992), on which the Commission had previously relied for the proposition that its ratemaking authority empowered it to adopt broad regulatory programs like the EEE Rules. ROO ¶ 52. The Johnson Court also expressed disapproval of Court of Appeals decisions, including Miller v. Arizona Corp. Comm’n, 227 Ariz. 21 (App. 2011), which had upheld the REST Rules under this same theory. Id.

Despite this frank acknowledgment of legal uncertainty, the ROO presses forward and claims the exemption from A.G. review. That is precisely backwards: where the constitutional basis for a rulemaking is genuinely contested in light of intervening Supreme Court authority, the cautious and legally sound course is to obtain A.G. certification, not to skip it. The original EEE Rules were submitted to the Attorney General for certification “out of an abundance of caution,” notwithstanding the Commission’s position at the time that they were wholly authorized by ratemaking authority. Decision No. 71819 at 17; ROO ¶ 30. No principled basis exists for applying less caution now, when the Supreme Court has cast additional doubt on the underlying constitutional theory.

The Attorney General of Arizona filed comments in this very docket opposing the repeal and stating that it “jeopardizes the Commission’s core responsibility to power Arizona’s future safely, reliably, and affordably, and is unlawful.” ROO, Exh. D at 6 (A.G. Comment). The ROO’s response to the A.G.’s comment never meaningfully addresses the A.G.’s argument that the Commission lacks an adequate evidentiary basis for repeal and never explains why A.G. certification is unnecessary given the uncertainty identified in Johnson. The Commission should not bypass A.G. certification on the basis of a legal claim its own Recommended Order concedes may not withstand judicial scrutiny.
 
VI. Repeal Creates an Unresolved Conflict Between Eliminating the Mandate and Preserving the Surcharges That Fund It
The ROO acknowledges a significant unresolved consequence of repeal: when the EEE Rules are eliminated, “there will no longer be even an illusory DSM/EE mandate (such as the expired EE standard that currently appears in the EEE Rules) to support the concept of the LFCR.” ROO Ƃ 49. The Lost Fixed Cost Recovery Mechanism (“LFCR”) is the surcharge mechanism through which APS and TEP customers pay for the revenue reductions caused by DSM programs reducing volumetric sales. ROO ¶ 49.

The ROO, however, does not order the elimination of the LFCR. Instead, the ROO states that the surcharges “will continue unless and until specific Commission decisions eliminate them.” ROO, Exh. C (EIS) at 5. This creates a direct conflict with the Commission’s own ratemaking obligation. If the Commission has determined that the EEE Rules are no longer in the public interest and that the mandate underlying the LFCR has expired, continuing to collect LFCR surcharges from ratepayers without a corresponding regulatory obligation raises a serious question under Article 15, § 3 of the Arizona Constitution as to whether those rates remain “just and reasonable.” The Commission cannot simultaneously declare the mandate that justifies the surcharge to be contrary to the public interest and continue charging ratepayers for it without explanation.

The ROO’s failure to resolve this conflict is an independent ground for rejection. If the Commission intends to repeal the EEE Rules, it should simultaneously address the continued collection of LFCR surcharges and provide ratepayers with a clear and lawful basis for any ongoing charges.

VII. The Economic Impact Statement Does Not Support Complete Repeal
The Economic Impact Statement ("EIS") provides further evidence that complete repeal of the EEE Rules is unwarranted. Exhibit C.

An EIS is intended to evaluate the probable costs and benefits associated with a proposed rulemaking. Here, however, the EIS repeatedly identifies benefits associated with EE and DSM programs and acknowledges potential adverse consequences associated with repeal.

The EIS reports that APS has achieved more than 1,740 MW of cumulative peak demand savings through EE programs since 2005. It further reports that TEP's DSM programs have delivered approximately 604.78 MW of capacity savings and 1.73 million MWh of energy savings since 2015. Updated EIS at 3. The EIS also recognizes that EE investments contribute to utility resource planning, grid reliability, and peak demand reduction. Id.

The ROO further acknowledges substantial net benefits associated with DSM programs. According to the ROO, APS reported DSM program benefits of approximately $1.432 billion compared to costs of approximately $941 million. ROO ¶ 40. These figures reflect substantial net benefits to customers and undermine the assertion that the existing framework has failed or no longer provides value. Notwithstanding these figures, the ROO concludes in Finding of Fact ¶ 84 that “the probable benefits of the proposed repeal of the EEE Rules in Arizona outweigh the probable costs.” The ROO offers no analysis reconciling that conclusion with the documented $490 million net surplus in ratepayer benefits, nor does it explain why a program generating a greater-than-1.5:1 benefit-to-cost ratio should be eliminated in the public interest.

The EIS further notes that TEP's Smart Rewards program has consistently delivered between 20 MW and 30 MW of first-hour peak demand reduction and identifies newer programs, including battery storage programs, that are intended to further support grid reliability. Updated EIS at 3. These findings demonstrate that DSM programs continue to provide measurable value and continue to evolve in response to changing grid needs.

The EIS likewise identifies several potential adverse consequences associated with repeal. The EIS states that reduced investment in EE programs may increase customer energy consumption and contribute to higher long-term utility bills. Updated EIS at 5. The EIS further concludes that repeal may result in inconsistent program availability across utility service territories, reduced access to EE programs, and disproportionate impacts on low- and moderate-income households. Id.

Importantly, the EIS does not conclude that EE or DSM programs have failed. Nor does it conclude that the framework established by the EEE Rules has been ineffective. To the contrary, the EIS repeatedly acknowledges the benefits associated with EE and DSM programs and identifies risks associated with eliminating the regulatory framework that supports those programs.

The EIS therefore raises the same question left unanswered elsewhere in the ROO: if EE and DSM programs continue to provide measurable benefits, and if repeal carries identifiable risks, why is complete repeal preferable to amendment?

The EIS does not answer that question. Instead, the EIS supports a more measured approach. If the Commission believes portions of the EEE Rules require revision, those provisions can be amended. If the Commission believes the expired EE savings standards should be updated, those standards can be revised. The EIS does not support the conclusion that the entire Article should be repealed.

Accordingly, the Commission should give substantial weight to the EIS findings recognizing the ongoing benefits of EE and DSM programs and should pursue modernization of the EEE Rules rather than their elimination.

VIII. Recommendations and Conclusion
For the reasons discussed above, AriSEIA respectfully recommends that the Commission reject the ROO's recommendation to repeal the EEE Rules. The record demonstrates that EE and DSM programs continue to provide substantial benefits to Arizona utilities, ratepayers, and the electric grid. The record further demonstrates that DSM programs continue to evolve and play an increasingly important role in resource planning, peak demand reduction, grid reliability, and customer participation. Nothing in the record demonstrates that those benefits have disappeared or that the regulatory framework governing such programs should be eliminated.

AriSEIA recognizes that portions of the EEE Rules may warrant revision. The electric industry has changed considerably since the rules were adopted in 2010, and the Commission may reasonably conclude that certain provisions should be updated to reflect current technologies, market conditions, and utility needs. The existence of potential improvements, however, does not support complete repeal of the rules. Accordingly, AriSEIA recommends that the Commission update and modernize the EEE Rules rather than repeal them.

At a minimum, the Commission should preserve the provisions governing DSM implementation plans. The ROO does not identify any replacement framework through which utilities will file future DSM plans or through which the Commission will review and oversee those filings. Eliminating those provisions would create substantial regulatory uncertainty for utilities, stakeholders, and the Commission.

This concern is particularly significant because the Commission has repeatedly approved DSM programs, including VPP programs, and utilities continue to rely on DSM resources as part of their planning portfolios. If the Commission intends for DSM and VPP programs to continue, a regulatory framework governing those programs must also continue.

The record supports modernization. It does not support elimination. AriSEIA therefore respectfully requests that the Commission reject the ROO and pursue amendments to the EEE Rules in lieu of repeal.
​
Respectfully,
/s/ Autumn T. Johnson
Executive Director
AriSEIA 
(520) 240-4757
[email protected]

FOR IMMEDIATE RELEASE
​
PHOENIX, Ariz. – June 16, 2026 – The Arizona Court of Appeals has vacated the Arizona Corporation Commission's decision approving Arizona Public Service's (APS) solar-specific charges, including the Grid Access Charge (GAC) and the Legacy Solar Rate Increase (LSRI), marking a significant victory for Arizona's rooftop solar customers and the rule of law.

The Court concluded that the Commission's decision cannot stand and remanded the matter for further proceedings after finding that the process used to adopt the charges deprived affected parties of a meaningful opportunity to challenge them.

Importantly, the Court recognized that APS never proposed the solar-specific charges in its rate application and instead sought a uniform residential rate increase. The solar charges were introduced only after the evidentiary record had closed, leaving customers and stakeholders without an opportunity to fully address the proposal.

"This decision confirms what AriSEIA has argued from the beginning: Arizona's rooftop solar customers should not be singled out for discriminatory charges that were never properly proposed or supported," said Autumn Johnson, Executive Director of AriSEIA. "The Court has now vacated those charges, and the Commission should act quickly to eliminate both the Grid Access Charge and the Legacy Solar Rate Increase in the pending APS rate case."

The Commission itself previously found that APS had not demonstrated that rooftop solar customers impose unique costs warranting separate treatment. In this appeal, the Court further recognized that APS did not seek approval of the solar charges in the underlying case and that affected parties lacked meaningful notice that such charges were under consideration.

Rather than continue to defend charges that have now been vacated by the Court of Appeals, AriSEIA urges the Arizona Corporation Commission to use the ongoing APS rate case to permanently eliminate the use of a site load cost of service study and the GAC and LSRI and restore a fair, transparent, and evidence-based approach to ratemaking.

"The Commission has an opportunity to put this issue behind it," Johnson said. "Arizona should encourage customer investment in rooftop solar, not burden it with unlawful and discriminatory charges that have now been rejected by the courts."

For more than four years, AriSEIA has worked alongside its members, national partners, fellow appellants, and Arizona solar customers to challenge these charges and advocate for policies that are lawful, transparent, and support customer choice.

About AriSEIA
The Arizona Solar Energy Industries Association (AriSEIA) is a statewide nonprofit trade association representing the solar, storage, and electrification industry. AriSEIA's mission is to develop and support policies that create opportunities to advance Arizona's economy through solar energy, storage, and electrification. AriSEIA advocates for sustainable job creation in the deployment of solar and complementary technologies and collaborates with stakeholders to encourage utilization of Arizona's greatest natural resource: the sun.
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Media Contact
Autumn Johnson
520-240-4757
[email protected]

Arizona Public Service (APS) filed for a 90-day extension of their integrated resource plan (IRP). If that is granted, the stakeholder comments would be due in January instead of October. AriSEIA filed to ask for stakeholder comments for all utility IRPs be due in January if the APS request is granted, regardless of whether or not other utilities file their IRPs in August. 

APS recently filed a motion asking the Arizona Corporation Commission to restrict witness examination in its pending rate case.

APS is seeking approval of significant rate increases and numerous policy proposals that could affect Arizona customers for years to come. As the applicant, APS bears the burden of proving that its requests are just, reasonable, and supported by the evidence. Cross-examination is one of the primary tools available to test that evidence and ensure the Commission develops a complete record before making decisions that will impact ratepayers.

Arizona courts have recognized that, while ratemaking is legislative in nature, the proceedings leading to those decisions are quasi-judicial and subject to due process requirements. Limiting parties' ability to question witnesses and test evidence raises serious concerns about whether the record will be fully developed before rates are approved.

AriSEIA believes APS's request is both premature and unnecessary. The hearing remains underway, and APS has not demonstrated that additional hearing days will be needed. If scheduling concerns ultimately arise, the Commission can address them through additional hearing days rather than restrictions on the examination of witnesses.
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When a utility seeks to increase customer rates, the answer should not be less scrutiny. Arizona ratepayers deserve a full and fair review of the evidence before any decision is made.