Arizona's utility regulators have decided to eliminate rules that require power companies to buy renewable energy. This could end nearly 20 years of green energy requirements in the state, as reported by Factor This Media.
All Commissioners Vote Yes
On August 14, 2025, the Arizona Corporation Commission voted 5-0 to start removing the Renewable Energy Standard and Tariff rules. All five commissioners agreed to instruct their staff to initiate the process of repealing these regulations.
The previous report mentioned that rules have been in place since 2006, requiring electric companies to obtain 15% of their power from renewable sources like solar and wind by 2025.
They also require 30% of that renewable energy to come from smaller sources instead of big power plants.
Power Companies Initiatives
Arizona's two biggest power companies are already beating the targets the state wants to eliminate. Arizona Public Service Company currently gets about 19% of its electricity from renewable sources in 2024. That's up from 13% in 2023.
Tucson Electric Power is doing even better, getting 29% of its power from renewable sources in 2024, compared to 27% in 2023. Both companies have reached these levels without needing government rules to force them.
The Commission's primary concern is how much customers are paying for expensive contracts signed years ago when renewable energy cost much more than it does now.
The most prominent example is the Solana Generating Station near Gila Bend. Arizona Public Service (APS) signed a 30-year contract in 2008 for this solar plant, agreeing to pay about 15 cents per kilowatt-hour when it started working in 2012.
Today, Solar Topps explains that the price is way too high. APS says current market prices for electricity usually cost between 2 and 3 cents per kilowatt-hour. That means the old solar contract costs five times more than what companies pay now.
Customers Have Paid Extra
Since the renewable energy rules started in 2006, Arizona customers have paid about $2.3 billion in extra charges on their electric bills. These charges helped cover the higher costs of buying green energy.
The Commission says these costs aren't needed anymore because renewable energy has gotten much cheaper. Power companies are now choosing to build solar and wind projects without government requirements because they make financial sense.
While the Commission aims to save money, the renewable energy rules have brought some benefits to Arizona. The state received increased investment in clean energy businesses, creating jobs in the renewable energy field. The rules also reduced air pollution from coal and gas power plants.
The requirements helped make renewable energy technology cheaper as more companies got involved. They also saved water compared to traditional power plants that require a significant amount of water for cooling.
The Commission's vote starts a formal process that could take several months to finish. There will likely be public hearings where utilities, consumer groups, and environmental organizations can share their opinions about the changes Factor This Media explains.
It's not clear if this approach will keep Arizona moving toward clean energy. The state is preparing to remove one of its oldest environmental policies, and time will tell whether power companies will continue investing in renewable energy without government requirements.
