Arizona homeowners with rooftop solar panels have won another legal round against their utility company — and the fight is far from over. An Arizona Court of Appeals panel has again rejected a monthly surcharge that Arizona Public Service wanted to impose on solar customers, keeping the fee blocked while the legal battle continues.
The disputed charge — ranging from $2 to $3 per month — was first approved by the Arizona Corporation Commission as part of a broader APS rate increase in 2024. The utility argued the fee was necessary to cover what it described as “extra costs” involved in supplying power to solar customers during times when their panels underperform or stop generating electricity altogether.
The Court of Appeals first blocked the fee in June, ruling that regulators had not given opponents a proper chance to argue against it before approving it — and that APS had failed to provide evidence that solar customers actually cause higher costs for the grid.
A Second Hearing Didn’t Settle the Dispute
Following that initial ruling, both APS and the Corporation Commission asked the court to reconsider. They pointed to a rehearing held by the commission in December 2024, where pro-solar advocates were given the opportunity to present their arguments. The commission ultimately upheld the fee after that hearing.
The appeals court, however, was not persuaded. It found that even with the rehearing, opponents of the fee were still not given
“a full and fair opportunity to contest the solar-specific charges.”
A key example cited by the court: the administrative law judge overseeing the December hearing cut off testimony from an economist who was serving as a witness for the Arizona Attorney General’s Office, which had taken a position against the fee. The court viewed that decision as a meaningful denial of due process for those opposing the surcharge.
What Happens Next
The ruling effectively kills the extra fee for now, though it does leave a path forward. The Corporation Commission has the option to hold yet another rehearing — one that would need to give fee opponents a more complete and fair opportunity to present their case.
APS, meanwhile, is not backing down. The utility has announced it plans to escalate the matter to the Arizona Supreme Court. Spokesperson Ann Porter explained the company’s reasoning in an email statement:
“APS would like additional review so that we can ensure appropriate rates for residential customers with rooftop solar. APS remains committed to providing safe, reliable service while supporting rates that are fair for all customers,”
Porter said.
The Corporation Commission, for its part, has not yet decided on its next move. A spokesperson for the agency said the decision is currently under review by the Office of General Counsel, which handles legal matters for the commission.
The case is one of several ongoing disputes shaping Arizona’s energy landscape. Outside groups have poured nearly $2 million into the race to elect Arizona Corporation Commission members, reflecting just how high the stakes are for utility policy in the state. Separately, surging energy demand from data centers is pushing power companies to consider expanded natural gas development, while the Central Arizona Project has joined a Colorado River water lawsuit against the federal government. An internal employment dispute at the Corporation Commission has also spilled into public view, adding another layer of turbulence to the agency overseeing these critical decisions. Meanwhile, researchers have found that AI data centers in the Phoenix area use relatively little water directly on site, but drive significant water consumption through their heavy demand for electricity.
Comments are closed.