In 2006, the Arizona Corporation Commission enacted a Renewable Energy Standard (RES) requiring utilities to generate 15 percent of their power from renewable sources by 2025. Qualifying sources include solar, wind, biomass, biogas, and geothermal. Originally, 60 percent of the standard was to be met by solar energy by 2007. However, that mandate was dropped in favor of a mandate of 30 percent from local distributed generation.
Utilities must obtain renewable energy credits (RECs) from eligible renewable sources to meet the standard.
The added costs to utilities are offset by an increase in the Environmental Portfolio Surcharge for residential customers from 35 cents to $1.05 per kilowatt-hour. The surcharge for nonresidential customers increased from $13 to $39 per kWh. The cap for energy intensive industrial customers is $117 per kWh.
Source: Arizona Corporation Commission, Database for State Incentives for Renewables and Efficiency