AZ Electric Energy is at an Important Crossroads
- Bradley Newman
- Jun 6
- 11 min read
Introduction
Arizona is facing unprecedented demand for electricity. Population growth, dozens of new AI data centers, semiconductor manufacturing, and ongoing electrification are pushing our grid to its limits.
The Arizona Corporation Commission (ACC) is charged with regulating our state’s electric monopolies to protect ratepayers and ensure our energy needs are met well into the future.
But is the ACC playing the role it should on our behalf?
Electric energy strategy takes years—even decades—to implement. Equally true, renewable energy strategies take years to gain momentum and years to reverse course. This has been happening for 20 years in Arizona and we are now seeing what it means for us.
Will renewable energy solve our energy problems or make them worse?
In the short term, APS has already implemented an 8% rate hike in 2024 and is now requesting another 14% increase for 2026. Your electricity bill has been going up, and continued rate growth is on the horizon. The decisions your elected leaders make at the ACC will affect Arizona for decades just as past ACC decisions are affecting us now.
There are two ACC seats up for election in 2026. It is clear ACC must play a leadership role to push Arizona utilities toward suppling Arizonans with cost effective, reliable energy for coming decades.
The Green New Deal (GND) and How We Got Here
To understand where Arizona’s electric grid is heading, it is important to understand the policy missteps—and the disregard for basic science—that have driven energy decisions for the last 20+ years.
Follow the Science
Our story starts with a trip back to 4th grade science class.
We all learned that humans inhale oxygen (O₂) and exhale carbon dioxide (CO₂). Plants take in CO₂ and emit O₂ and water. This is basic science that will not change in anyone’s lifetime… ever.
Somewhere along the way, we forgot this and believed the Green New Deal (GND) narrative advanced by Al Gore. He spent years telling us CO₂ would kill humanity and that we needed to pay billions of dollars to prevent the imminent climate collapse that was just around the corner.
Of course, you must follow the money to find the truth.
Hey, Al - you’re now a GND billionaire, but humanity is still here!
The junk science advanced by Al Gore was just that..,. junk. It has not turned out to be true and it has cost us trillions spent on GND policy initiatives. It will take a few years to reverse course and turn back toward reliable cost-effective energy capacity.
Hopefully we have learned. Our energy policy should never entertain GND thinking again. Here’s why.
The Truth About CO₂
The CO₂ Coalition is a well-respected organization of scientists and engineers who follow real science. They maintain an easy-to-understand set of facts that tells the CO₂ story clearly challenging every GND policy and renewable energy mandate ever published.
Notably:
CO₂ is Minuscule: Only 0.042% of the atmosphere is CO₂. Water vapor is 1–4% (depending on location) and is responsible for 75–90% of greenhouse gas (GHG) warming.
In the Arizona desert, our low humidity means water vapor is normally around 0.5%. Arizona’s low humidity means low GHG from water vapor which manifests as rapid heating in morning sun and quick cooling when the sun goes down. The water vapor isn’t there to slow heat transfer and CO₂ has 1/10 effect of water vapor.
In higher humidity environments in the eastern US, water vapor serves as a potent GHG that either traps heat in the summer (sweltering humidity) or prevents heat from warming us in the winter (wet cold).
Without CO₂, We Die: At less than 0.02% CO₂, humanity dies because oxygen-producing plant life is not sustainable. Conversely, commercial greenhouses use 0.12% CO₂ (3x atmospheric concentrations) because plants grow much better in higher CO₂ environments. Higher CO₂ levels have been a major factor to increased agricultural yields globally in the last 50 years. Of course, we must maintain our forests and vegetation to absorb CO₂ and produce O₂, but that is a topic for a different day.
Main Point: the dismissal of basic science across four decades has led us to misguided Green New Deal thinking—both nationally and in Arizona. Certainly, rising CO₂ levels is not a problem worth spending trillions to fix.
Poor public policy based on bad science is why we face a costly energy crunch in coming years. Not decisions made by the ACC since 2023.
Arizona’s GND-Driven Policies
In 2006, the ACC passed the REST Rules (Renewable Energy Standard and Tariff. Notably, current liberal Attorney General Kris Mayes (a “Republican” back then) was on the ACC and pushed the REST rules through. Their main goal: require 15% of Arizona energy usage to come from renewable sources (wind and solar) by 2025. The GND political environment over the last two decades fueled this “green” momentum.
At one point in the mid 2010’s some policy makers were even calling for the elimination of natural gas from the state’s power generation mix. An absurd thought.
In March 2026, the ACC unanimously eliminated the REST mandates after starting the repeal and hearing process in August 2025. AG Kris Mayes has been using lawfare to stop the REST repeal which has delayed the process. Even after the repeal in March 2026, she has filed another suit to reinstate these GND policies. (She needs to go. Warren Petersen for AG!)
So, what was the benefit of this repeal?
The repeal changes the direction and tone of utility rate and capacity decisions in two important ways:
It changes the dynamic between the ACC and the utilities. For financial and political reasons, APS in 2020 set a voluntary 100% renewable energy objective by 2050 at an estimated cost of $42.7 billion to ratepayers that would also reduce grid reliability. APS has now backed away from this plan and also walked back their 2030 goals for 65% renewable energy output.
REST surcharges and subsidies go away. There were ~$3B of surcharge goodies the utilities and energy efficiency contractors could have taken advantage of—all charged back to ratepayers. (This repeal started in 2023)
One egregious example is the Solana Plant in Casa Grande. In 2013, to meet REST mandates, ACC Chair Kris Mayes pressured APS to accept a 30-year contract priced at $0.15 per kilowatt-hour—a rate that today would cost approximately $0.02–$0.03/kWh. Nearly 5x current renewable rates. The REST mandates are gone, but bad contracts like this - to drive political objectives - will remain in the rate base for a long time.
Another example is the 2013 decision to take the Cholla coal-fired plant offline by 2025. By 2023, when the current incumbents assumed office, the plant had been minimally maintained for a decade. The cost to retore the plant to long term operations was estimated to cost $2B. Reviewing all options, the best cost-time decision was to convert it to gas-fired plant to come back online later this decade for service through 2038.
After the REST rule repeal, APS is now backing the 48” Transwestern Gas Pipeline due into Arizona from Texas by 2029. The pipeline would supply new gas fired capacity that is being developed for 2031. Having said this, APS continues to tout carbon-neutral goals which is not the full commitment to reliable energy sources we would like to see, but it is a step forward.
These examples illustrate how bad GND policies can lead to a statewide economic disaster. They also illustrate that ACC decisions have a much longer gestation period than the 4-year election cycles for seats on the ACC.
Voters should consider this when evaluating hiring or rehiring candidates for the Commission.
The Problem
Arizona has been running hard toward renewable energy for 20 years—solar, wind, batteries—despite no scientific justification for abandoning reliable energy sources. Liberal GND politics based on flawed science is to blame. (Even Blackrock is seeking to buy utilities to drive GND initiatives through private equity. Something Thomson and Myers has opposed in AZ.)
While renewables are legitimate energy sources, they do not have the same grid reliability as coal, gas, and nuclear (reliable energy).
Over time, we have been reminded of an important reality of renewable energy: the sun goes down at night, and the wind does not always blow.
Compounding this, Arizona has seen explosive new demand from population growth, electric vehicles, semiconductor manufacturing, and AI data centers. APS’s peak demand has set records three years running—hitting 8,631 MW in July 2025—and is projected to reach 13,100 MW by 2038, a staggering 60% increase.
AZ Historical & Projected Electric Demand Growth
Keeping up with such aggressive demand growth would be a challenge for any grid—even one built entirely on reliable coal, gas, and nuclear capacity. Any new power plant is a massive undertaking: approval, design, and construction are measured in half and whole decades, not months.
For two decades, Arizona’s utilities have been building renewable energy at the expense of reliable—and more affordable—energy sources. This industrial complex is like a rolling freight train: it takes a long time to get moving and a long time to stop and reverse course.
Independent Report
The Always On Energy Research (AOER) report commissioned by the Arizona Free Enterprise Club estimated that APS’s Preferred Plan from 2020 (voluntary Net Zero by 2050) would cost ratepayers at least $42.7 billion through 2038, increase electricity prices by at least 45%, and add at least $1,620 per year to the average APS customer’s bill. Their analysis also found that the plan could result in rolling blackouts lasting up to 11 hours during summer peak periods if energy efficiency targets are not met.
In contrast, AOER found that maintaining existing coal plants and building largely new natural gas capacity could reliably meet demand at a cost of $20.8 billion—a savings of $21.9 billion. This is the path APS and the ACC have pursued in recent months as the REST rules were being repealed. However, we would like to see more aggressive movement toward these goals.
APS IRP Cost Comparison (Through 2038)
With recent ACC decisions, the freight trains are beginning to slow and move back toward building more reliable energy sources.
Yet we cannot simply abandon existing renewable energy projects, as recent historic demand growth requires an all-of-the-above energy sourcing strategy. You should be aware that it is likely energy costs will continue to increase while new, more cost-effective energy sources are built.
The ACC has been eliminating the residual effects of the GND political environment, shifting utility focus to reliable energy, and regulating the completion of existing renewable projects.
The results of these strategies will not be seen overnight, but it is movement in the right direction.
The ACC’s Constitutional Authority
With REST repealed, utilities’ investments must stand on unsubsidized business cases that come in front of the ACC.
The AZ Constitution gives the ACC “full power to, and shall, prescribe just and reasonable classifications [of energy]… and just and reasonable rates and charges to be made and collected by public service corporations … and make reasonable rules, regulations, and orders by which such corporations shall be governed.”
There is a lot in that statement centered on the word “reasonable”. With the REST rules repealed, the mandate for renewables is gone, but it is not a prohibition of renewables within the ACC’s mandate under the AZ Constitution. By focusing on the most cost-effective choices for Arizonans going forward, the ACC is meeting its “reasonableness” mandate by allowing only the most cost-effective means of new energy sources to be charged to ratepayers. Generally, coal, gas and nuclear will win these business cases based on reliability, operation efficiency and longevity of these plants. Renewables must be replaced every 15-25 years whereas new coal, gas and nuclear plants have 30-60 service lives before replacement.
Importantly, the ACC does not have an obligation to allow private investors or utilities to recover capital costs for any renewable project from ratepayers. The ACC only has an obligation to allow generation that meets its standards supply the grid at reasonable rates. Many of the remaining solar and wind projects in AZ are by private investors that will not be entitled to capital reimbursement from ratepayers.
Hiring the Right Team - '26 ACC Primary Election
CrimsonSaguaro believes strongly that your vote is a hiring decision. The ACC job requirements are an important consideration in who to hire. As we have argued, utility decisions cannot be taken lightly.
The ACC commissioner role is not the glamorous government executive position many might think it is. It requires long hours of tedious technical and business case considerations to arrive at sound decisions on behalf of Arizonans. This analysis has shown how critically important selecting the right people for this job really is. Our future—literally—rides on the ACC making smart, non-politicized decisions on behalf of ratepayers.
Your informed vote is a VERY IMPORTANT hiring decision in 2026.
The Incumbents: Thompson & Myers
Kevin Thompson and Nick Myers are seeking to be rehired.
In any rehiring decision, you’d ask: “Have they done what they said they would do?”
2022 Promises
Thompson and Myers ran on three main issues:
Eliminating Mandates and Subsidies
Stopping “California-Style” GND Policies
Grid Reliability & Consumer Protection
What They Actually DID
Thompson and Myers ran on three main issues:
Thompson and Myers can point to multiple accomplishments. They led the unanimous repeal of the REST mandate approved in March 2026, ending the 15% renewable requirement and associated GND surcharges funding many unneeded rebates. Their actions also show a change from GND momentum across AZ utilities goverance to that of business-case based policies governing our resources.
However, conservative critics raise questions about the pace and aggressiveness of their work. But, as we have shown, there has been real movement in AZ policy despite an Attorney General that is blocking their work at every turn while working within the realities of the AZ Constitution.
The Arizona Free Enterprise Club and Arizona Freedom Caucus concluded that Thompson and Myers have been too accommodating of APS and have not aggressively implemented the energy reforms they campaigned on. This is why they recruited challengers to primary the incumbents. However, the evidence above does not paint such a clearcut picture as to primary them.
Let’s remember it is easy to do jobs we don’t have. Thompson and Myers have been doing this very unsexy work and have solid results to show for it. Voters should consider the depth to which AZ’s grid had fallen by 2023 when the incumbents began reversing course. It will take time and an experienced team to set AZ on the right course.
Ralph Heap: The Challenger
Ralph Heap is a fourth-generation Arizonan, retired orthopedic surgeon of 40 years and a current Arizona State Representative (District 10). He serves as Vice Chair of the Health and Human Services Committee in the Arizona House.
Heap does not have utility-specific experience. He has acknowledged this openly, saying, “I think it’s an advantage, not a disadvantage, to be a little bit disconnected. We’re very capable of learning whatever we need to do the jobs.”
Casting no disrespect toward Dr. Heap, this elected role requires insight into complex ratemaking, integrated resource planning, and energy economics. Being a principled conservative is valuable, but the question is whether ideological commitment alone will be sufficient to drive energy policy, rates and investment going forward.
The ideological heavy lifting has been done with the repeal of the GND policies in AZ. Now, it is time for the Commission members to drive the details of many complex infrastructure decisions.
Conclusion: Who Are the Best Hires?
Arizona’s energy future hangs in the balance.
We face explosive demand growth driven by data centers and population increases, a grid that has been steered toward intermittent renewable sources for two decades, accelerating rate hikes that are squeezing families and businesses, and the urgent need to build reliable, dispatchable generation capacity before it’s too late.
Certainly, there is no justification for spending billions to address GND climate change. Those days are over, but completing this path will require continued depth and insight into how utilities make investment decisions and set objectives.
Experience does matter on the ACC:
Thompson and Myers have done the heavy political lifting to turn the tide on GND momentum. Perhaps it took longer than some would have liked, but they did get it done. Remember, it is easy to be critical of a job you don’t have. It is much harder to do it.
Thompson and Myers have utility experience and have taken important steps—most notably the REST repeal after years of political momentum to blindly implement GND objectives.
Thompson and Myers promised to eliminate mandates and subsidies, stop Green New Deal policies, and protect ratepayers. Voters must judge for themselves how well those promises have been kept, but they have delivered tangible results meaningful to our future.
CS believes the case has been made to rehire Thompson and Myers for another term.
In 2028, the remaining three conservative commissioners will be up for reelection. We need to see meaningful movement away from GND policies and capacity for our support to remain steadfast in the 2028 Election.
Thank you to Dr. Terry Winters of the CO₂ Coalition for his assistance in developing this article.
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