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.
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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.
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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.

FOR IMMEDIATE RELEASE
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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]

AriSEIA has filed surrebuttal testimony in the APS rate case, directly challenging how the utility values rooftop solar and allocates costs.

The testimony argues APS’s “Site Load” cost of service study is fundamentally flawed and should be replaced with a standard Delivered Load approach. The current model understates the benefits of distributed solar and is being used to justify solar-specific charges that lack a valid foundation.

A key issue is APS’s reliance on transmission-level peak hours rather than retail customer load, which distorts results and minimizes solar’s contribution during high-demand periods. When evaluated using the correct framework, the testimony finds that rooftop solar significantly reduces peak demand and provides broader system benefits, including serving neighboring customers through exported energy.

AriSEIA also criticizes APS’ distributed generation study as methodologically unsound and disconnected from real-world grid operations.
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The filing urges the Commission to reject APS’ approach, eliminate unsupported solar charges, and adopt a more accurate, data-driven framework for valuing distributed energy resources.

AriSEIA filed direct testimony in the Arizona Public Service rate case. We make the following recommendations:

​Site Load COSS

• Discontinue the use of the Site Load COSS and instead direct APS to use a Delivered Load COSS going forward.
• In the alternative, direct APS to make the following modifications to the Site Load COSS
  • Use AriSEIA’s recommended methodology to determine demand reductions associated with Residential DG solar.
  • Use the same transmission cost allocation in the Solar Credit as APS does in its FERC tariff filings.
  • Do not “charge” solar customers for revenue shortfalls associated with transmission rates or EPR-6 or RCP purchases.
  • Utilize a marginal avoided energy cost rate instead of the average fuel and purchased price rate to value energy generation.
• Recognizing that the cost shift in the Site Load COSS disappears after fixing the methodological errors above, cancel the GAC and LSRI and direct APS to recalculate its rates without these adjustments.

DG Study

• Find that the Company did not follow the Commission’s directive to provide sufficient information in its application for intervenors to “scrutinize” the DG Study.
• Reject the results of the DG Study based on the myriad methodological flaws identified in my testimony.
• Do not direct the Company to perform the DG Study going forward.

SP Tariff

• Shorten the on peak window from 4 PM to 9 PM to 5 PM to 8 PM.
• Expand the SP Tariff to the E32-S and E-32M rates.
• Adjust variable cost recovery to 80% energy / 20% demand.
• Adopt AriSEIA’s “3:2:1’ variable energy rate design.
• Update its marketing materials to highlight the availability and benefits of this rate.

VPPs

• Expand the VPP program to non-residential customers.
• Update its marketing materials to highlight the availability and benefits of this rate.

AriSEIA filed a reply brief with the Arizona Court of Appeals today in the ongoing appeal from Arizona Public Service's last rate case, in which they imposed a discriminatory fee on rooftop solar customers. This is expected to be the last round of briefing and oral argument should be held in early 2026.

AriSEIA appealed the Arizona Corporation Commission (ACC) decision that allowed Arizona Public Service (APS) to impose a discriminatory fee on all of its rooftop solar customers, called the Grid Access Charge. Briefs were due to the Court of Appeals on July 18, 2025. Another round of briefs are due in September. You can read our brief here: 

APS has been charging a punitive and discriminatory fee against residential rooftop solar customers for almost a year and AriSEIA has been fighting it every step of the way. Today we joined with the Solar Energy Industries Association and two individual ratepayers in filing for an appeal with the Arizona Court of Appeals.

AriSEIA filed for reconsideration/rehearing today on the APS grid access charge and "legacy adjustment." These are two charges that uniquely punish solar customers for using less power from APS. The fee is currently ~$2.50 a month per customer, but APS has said it should be $88 a month per customer and the ACC has ordered them to increase it in their next rate case, which they plan to file this year. Applying for rehearing is a necessary step towards appealing to the Arizona Court of Appeals, which we plan to do on January 30th.

FOR IMMEDIATE RELEASE
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Contact: Autumn Johnson
520-240-4757
[email protected]

Phoenix, AZ: Today, the Arizona Corporation Commission (ACC) voted to uphold a fee on all Arizona Public Service (APS) solar customers. APS has nearly 200,000 solar customers, all of whom are paying 15% more than the rate increase approved for all residential customers this year. The ACC upheld the fees after granting a rehearing on this issue at the request of AriSEIA, Vote Solar, and the Arizona Attorney General’s Office. The ACC refused to consider key evidence in the record.

In January, the ACC surprised stakeholders by inserting a “grid access charge” into APS’ nearly completed rate case. AriSEIA argued the fee should be removed from the rate case decision, which was unheeded by the ACC. Therefore, AriSEIA and others immediately filed for reconsideration/rehearing, which was granted. After nearly a year of litigation, the ACC upheld the original decision after a number of abnormalities in the execution of the case, such as constraining the evidence to be considered, moving the hearing earlier after APS requested more time for adequate customer notice, an abbreviated briefing scheduled, and then scheduling the vote before the recommendation was even written.

​AriSEIA demonstrated at the hearing that based on a quantitative analysis of several national expert witnesses, APS had miscalculated the cost of service to solar customers. That miscalculation reflected that solar customers were not paying their fair share, when in fact, the inverse is true. Solar customers pay more than they should and actually subsidize non-solar customers.

APS testified that if the ACC eliminated the solar fees, the difference would be $.25 to residential customers. Despite the evidence, the ACC will penalize solar customers several dollars per month and approved an amendment to increase it in APS’ next rate case, which is anticipated to be filed in 2025.

“The evidentiary record makes it clear that solar customers are subsidizing non-solar customers and yet APS and the ACC continue to penalize solar customers with unfounded and discriminatory fees,” said Autumn Johnson, executive director of AriSEIA.

An appeal to the Arizona Court of Appeals is likely in 2025.