December 3, 2025 Open Meeting Highlights

Phoenix, Ariz. - The Arizona Corporation Commission voted on 10 matters, including securities, water, and electric items. Highlights from the meeting include:

Utilities

• CG Apache County Solar LLC and CG Apache County Wind

• Arizona Public Service Company

• Sulphur Springs Valley Electric Cooperative, Inc.

• Tucson Electric Power Company

CG Apache County Solar LLC and CG Apache County Wind LLC(L-21365A-25-0198-00250and L-21364A-25-0198 00250) - The Commission voted unanimously to remand this application for a Certificate of Environmental Compatibility (CEC) for the Repsol Lava Run Project back to the Arizona Power Plant and Transmission Line Siting Committee. The Commission also requested Apache County to file a notice of interest in this matter. The Line Siting Committee previously voted 8-2, approving the CEC. However, the Commission received correspondence from Apache County officials on the day of the Open Meeting, requesting to delay a vote on this matter pending the County Planning and Zoning Commission's approval for a Conditional Use Permit for the project. The vote could potentially delay construction of two renewable energy generating facilities. The ACC does not have jurisdiction over renewable energy projects; the ACC's jurisdiction covers the construction of transmission lines, generation tie lines, and related infrastructure that would connect the facilities to the state's electricity grid. The Lava Run Project would consist of a 27-mile long 345-kilovolt ("kV") transmission line, that would connect a proposed 500 MW wind facility a proposed 450-MW solar facility with on-site battery storage. Several area residents voiced concerns about environmental and safety issues before the Commission. The proposed transmission projects would be located on State Trust Land.

Arizona Public Service Company (E-01345A-23-0088) - The Commission voted unanimously to approve Chair Kevin Thompson's amendment that cut approximately $51 million from the proposed Demand Side Management Implementation Plan filed by the Arizona Public Service Company ("APS"). APS originally requested an annual budget of $90,887,913, but the approved amendment reduces the budget to $40 million. The annual ratepayer surcharges fund demand side management and energy efficiency initiatives. The new rates will take effect January 1, 2026, and will result in a monthly decrease in APS ratepayer surcharges on their bills.

Programs or incentives that were not approved include: incentives for horticulture or livestock fans, incentives for electric golf carts, incentives for high frequency golf cart battery chargers, incentives for UTC Gator off-road vehicles, incentives for EV charging stations for passenger vehicles driven by multifamily residents, incentives for advanced power strips, and incentives for air dryer upgrades. The Commission authorized several programs to continue including: the Cool Rewards demand response program, tribal community energy efficiency programs, energy efficiency programs for schools, funding for the recently approved Bring Your Own Device battery storage project that allows ratepayers to "sell" power back to the utility on demand response events, and limited income weatherization programs.

Sulphur Springs Valley Electric Cooperative, Inc. (E-01575A-24-0246) - Sulphur Springs Valley Electric Cooperative, Inc. (SSVEC) is a nonprofit distribution cooperative that provides electric service to about 42,500 members in Cochise County, and portions of Graham, Pima and Santa Cruz counties. The Commission voted unanimously to approve the settlement agreement reached between Commission Staff, SSVEC and IBEW Local 1116 with minor modifications. As part of its rate case, and in an effort to eliminate subsidization across customer classes, SSVEC will eliminate Net Metering for all non-residential customers. The Commission also voted unanimously to approve Commissioner Rachel Walden's amendment clarifying the length of the Grandfathering with accepted Sunwatts Interconnection agreements. For non-residential customers with net metering or those customers having an accepted interconnection agreement by the date of the Decision, Net Metering will be available until the earlier of (i) 20 years from the date of the installation of the Net Metering facility; or (ii) November 17, 2037 (the "Grandfathering Period).

Tucson Electric Power Company (E-01933A-25-0187)- The Commission voted 4-1, with Commissioner Rachel Walden casting the dissenting vote, to approve an Energy Supply Agreement (ESA) between Tucson Electric Power Company (TEP) and Humphrey's Peak Power LLC for a planned data center campus proposed to be built in Pima County. The Commission's role in this case is to review the ESA to ensure it meets regulatory requirements and provides protections for all TEP customers.

"TEP has an obligation to serve all customers within their territory," said Commissioner Lea Márquez Peterson. "While the County Board of Supervisors has voted to rezone and sell the land for this development, the Commission's vote this week to ensure that residential ratepayers are protected from cost shifts is vitally important to the region… as a Commissioner and a Tucson resident, I believe it is in the best interest of the ratepayers to approve the Special Contract and the protections it provides."

"Regrettably I had to vote against this contract", said Commissioner Rachel Walden. "I am fully supportive of the buildout of this industry in our state, and the potential it holds for Arizona. But TEP's contract with the developer did not go far enough in providing ratepayer protections for existing customers. I want to see longer-term contracts that contain upfront requirements to offset infrastructure needs, and early exit consequences that will make TEP whole; not leave existing customers holding the bag."

The 10-year agreement includes minimum monthly billing requirements, the gradual increase in load over 18 months to ensures safe and reliable service for all TEP customers, and provisions that confirm Humphrey's Peak Power LLC will be financially responsible for all costs related to building new infrastructure that serves only the proposed data center campus. More than 100 comments were submitted to the docket, and more than three dozen members of the public spoke before the Commission during the Open Meeting. The Commission asserts that its jurisdiction in this case is only over the generation tie lines and transmission infrastructure, the rates charged to customers and whether they are just and reasonable for all customers; the Commission's vote is not affected by the type of project associated with the ESA.