The Arizona Corporation Commission, the state's elected utility regulatory board, has repealed electric energy efficiency standards that advocates say have helped stabilize utility bills and grid reliability since they went into effect in 2011.
The July 8 vote was unanimous among the four commissioners present, with former Chair Kevin Thompson, who spearheaded the original repeal effort, absent.
The change layers onto a vote by the same board in March that undid the renewable energy standard, passed in 2006, which required regulated utilities to generate 15% of their electricity from renewables like wind or solar by 2025.
State leaders, environmental groups and consumer advocates say these two repeals will cause energy demand and electricity rates to go up while committing the state to decades of unnecessary climate-warming air pollution from additional fossil fuel infrastructure.
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“Utilities will now have less reason to invest in efficiency and every reason to build costly new infrastructure they can charge customers for," Arizona Attorney General Kris Mayes told The Arizona Republic. "Families will pay more, and the grid will be under more strain during peak summer hours. The ACC had a choice between protecting Arizona ratepayers from higher costs or protecting the profits of monopoly utilities. It chose utility profits."
Mayes, who served as a Republican commissioner from 2003 to 2010 and chaired the regulatory board at the end of that term before switching parties and running for attorney general, issued a statement of opposition in September 2025 when the commission voted to initiate the repeal of the energy efficiency standard.
In March, she formally challenged the repeal of the renewable energy standard on the basis that the commission had not done the legally required economic analysis — a move the commission has since taken its own steps to check her on and assert its authority.
Electric energy efficiency standards that advocates say have helped stabilize utility bills and grid reliability since they went into effect in 2011 have been repealed by the Arizona Corporation Commission, the state's elected utility regulatory board.
Current commission Chair Nick Myers contends that both standards were outdated and imposing unnecessary costs on ratepayers since the energy efficiency and renewable energy landscapes in Arizona have "changed dramatically in the past 20 years." He told The Republic immediately after the vote on July 8 that modern advances in home appliance technology mean efficiency is improving over time anyway and doesn't need to be subsidized by ratepayers.
"A lot of these programs really aren't moving the needle the way people think they are," Myers said in a call with The Republic. "They are basically just shifting money and giving certain classes of customers, like home builders, cash for something they were going to do anyway."
But in a state juggling escalating energy demand from new data centers, population growth and a rising need for air conditioning as extreme heat worsens, others warn that any additional strain on the grid from missed efficiency opportunities could also strain low-income families, small businesses and public health.
Energy efficiency as the 'gift that keeps on giving'
Arizona Gov. Katie Hobbs' Office of Resiliency is among those arguing that energy efficiency standards have helped leverage technology advances to boost progress and cut costs.
"The repeal of the energy efficiency standard signals to utilities that energy efficiency as a resource is no longer a priority and the Commission does not support this least-cost resource," Maron Mahoney, director of Hobbs' Office of Resiliency, told The Republic in a statement. "(This) may result in higher bills for utility customers."
Mahoney oversees the office's Efficiency Arizona program, which has delivered rebates for home energy efficiency upgrades totaling nearly $5 million for 660 households through HEEHR and HOMES grants funded by former President Joe Biden's Inflation Reduction Act. The office expects to be able to serve about 7,000 more households in the state before the program ends in 2031, pending available funding. The upgrades have already saved an estimated 809,124 kWh, the equivalent of powering 75 homes for one year, representatives said.
These programs are not income-limited, as are many of the electric bill assistance programs offered by local, state or federal entities. Myers pointed to this feature of similar utility-backed efficiency programs mandated by the repealed standard as one of their central flaws.
"What we end up finding is that low-income folks are the ones that can't really afford much of this anyway," the commissioner said, referencing high-end energy-efficient washing machines as an example. "So a little bit of a rebate isn't really going to help them, but the utility rates are raising to compensate for everybody else that is getting them."
Advocates for the standard, however, argue that every efficiency gain combines to keep costs low for all ratepayers by stretching the existing electricity supply across more users to reduce the need for new, expensive infrastructure.
“The word mandate is tossed around like it is a significant burden on ratepayers," Diane Brown, executive director of the Arizona PIRG Education Fund, a public interest research group that advocates for consumers, told The Republic. "But, in fact, Arizona’s energy efficiency standard has been a blessing for ratepayers, saving a net of more than $1.7 billion and over 2,000 megawatts of energy since it went into effect on January 1, 2011."
The $1.7 billion calculation, also referenced by Mahoney, comes from a compilation of demand-side management reports filed annually with the commission by Arizona Public Service and Tucson Electric Power, two major utilities it regulates. Brown said it represents a conservative estimate of savings from the initiation of the standard through 2023.
“Energy efficiency is the gift that keeps on giving," she said. "(Once an upgrade is installed) ratepayer savings continue month after month, year after year in that household or business. With the significant influx of electricity needs due to data centers, large loads and population increases, energy efficiency offers grid stability that can help increase reliability and avoid blackouts.”
It's also immediately deployable, said Jason Lowry, director of public policy initiatives for Local First Arizona. Building new transmission lines or generating facilities, on the other hand, is often a long process with a variety of hurdles.
"With siting new energy generation, whether it's fossil fuel or renewables, we're seeing this tremendous backlash across the state," Lowry said, speaking about communities that fight new facilities in their backyards. "Energy efficiency has the ability to be scaled up relatively quickly, and we see the benefits as soon as those projects are done."
Local First Arizona is a nonprofit focused on community and business interests across Arizona. The efficiency measures offered by APS and TEP, as mandated by the newly repealed standard, have helped employers upgrade their lighting, cooling systems, thermostats, improve the seals around refrigerators and more. This has helped keep electric bills manageable for Arizona's small business sector, Lowry said, which constitutes 99% of registered business entities in the state and employs 1.2 million workers, or about 43% of the workforce.
"A lot of this is looking at short-term costs versus long-term benefits, and this (repeal) really does feel penny-wise and pound-foolish in a lot of ways, where (the commissioners are) arguing that these are immediate savings in terms of what future rates will be while we are confronting a reality of rising utility bills across the board," Lowry said. "They're taking away one of the few tools that can help people, whether businesses owners or residents who are on the edge financially, be able to incentivize projects that could actually save them money for the long haul."
The bigger energy, climate and political picture
Reducing the need for additional power infrastructure through energy efficiency programs is also one of the most straightforward and affordable solutions to human-caused climate change, a problem experts say will continue to add to the expense and danger of life in Arizona.
Scientists have long been clear that greenhouse gas emissions released into the atmosphere, primarily by burning fossil fuels for energy, have led to higher average temperatures, water shortages in the Colorado River and worse wildfires as landscapes dry out. When electricity demand spikes quickly, as with the influx of data centers, utilities and companies often choose to build fossil-fueled natural gas plants due to more streamlined, long-standing procedures for this option. This sets off a cycle where higher temperatures drive up energy demand for air conditioning even more.
One central solution has been to clean up the energy grid by increasing the percentage of electricity generated by non-fossil sources, as Arizona's renewable energy standard aimed to do. The global renewables market is increasingly economically viable, but regulatory obstacles and recent cuts by the Trump administration to Biden-era clean energy tax incentives have stalled progress, as reporting by The Republic in 2025 on solar and battery bankruptcies showed.
Solar and wind power generation is also not without its own environmental costs. That's why climate scientists, environmental groups and consumer advocates have aligned on simply scaling back energy needs through improved efficiency as a relatively easy and affordable solution to several problems at once.
As data centers have broken ground in Arizona, many have opted to bypass negotiations over connecting to the grid by building their own gas power plants. Still, utilities are ubiquitous in their push for additional infrastructure. As part of its ongoing rate case, APS published an infographic outlining its need to raise rates due to the "sharply increased prices for components like power poles, wires and transformers."
That rate case has been met with strong backlash from the public over APS' attempt to increase customer rates by 14%. A final decision by the commission is expected later this year.
Myers told The Republic on July 8 that he didn't think the repeal of efficiency standards, which he said he voted for hoping it would help cut unnecessary expenditures for utilities that get passed on to ratepayers, would be a factor in the rate case.
Neither APS nor TEP responded to The Arizona Republic's requests for comment about their stance on the repeal or how it could influence electricity rates.
Brown said that while the utilities initially fought the efficiency standard in 2010, they have since easily met its demands and that TEP has "remained steadfast in their support for the offerings they provide." APS, which scaled back its clean energy commitments last year, has been quiet about its intentions for ongoing efficiency measures, she said.
Myers said the vote this week doesn't immediately change anything, since they are not discontinuing the programs but simply phasing out the mandate for utilities to offer them. He said he favors a market-driven approach to regulating Arizona's electricity market, and that both renewables and efficiency upgrades will create their own demand.
Myers and fellow energy regulator Thompson, both Republicans, will be up for reelection to the Arizona Corporation Commission later this year. They face challenges from two Democratic candidates, Jonathon Hill and Clara Pratte, as well as at least one Republican.
State House Rep. Ralph Heap, R-Mesa, whose candidacy is backed by the conservative group Turning Point Action, may be more directly anti-renewables than the sitting commissioners. In the last legislative session, Heap, along with former Rep. David Marshall of Snowflake, who has dropped out of the commissioner race, introduced several bills attacking wind and solar siting that align with steps President Donald Trump has taken to cut support and revoke permits for the wind, solar and battery industries.
Meanwhile, Lowry said there's no time to waste when it comes to making choices that could simultaneously protect the future of Arizona's energy access, economy and climate. With Arizona already on the front lines of extreme heat deaths and illness, and Americans nationwide struggling to pay their electric bills, state leaders and community advocates worry the two rule repeals are a dangerous misstep.
"As these things are unfolding, as summers are getting hotter, the timing (of this repeal decision) is just not great," he said. "We've repeatedly heard utilities themselves recognizing that context of these rate increases, that summers are now hotter and longer. It feels like a perfect storm."
