Court of Appeals Sides with Attorney General Mayes, Vacates Corporation Commission’s Solar Surcharge on APS Customers

PHOENIX — Attorney General Mayes today announced that the Arizona Court of Appeals has vacated the Arizona Corporation Commission’s decision authorizing Arizona Public Service Company (APS) to impose a special surcharge on residential customers with rooftop solar, ruling that the charge was adopted without proper notice and that a later rehearing failed to cure the violation.

“APS customers with solar panels were blindsided by a rate hike that the public was never told about,” said Attorney General Kris Mayes. “The ACC cannot spring a new charge on ratepayers and then call it fair just because they later offer a rushed do-over. My office will keep fighting for the notice and fair hearing the Constitution guarantees utility customers.”

The charge was never proposed by APS or disclosed in the public notice of APS’s 2022 rate case, yet was approved anyway. The Court held the Commission’s subsequent rehearing didn’t fix that problem because the presiding judge cut off the State’s expert witness, a key APS witness was unavailable for cross-examination, and the Commission discouraged parties from presenting relevant evidence by declaring in advance — including in public remarks by then-Chairman Jim O’Connor — that the underlying cost of service study was already final.
 
The Court also held the Commission wrongly placed the burden on the State and its co-challengers to disprove the charge, when the law required APS to prove that substantial evidence supports the charge.
 
The Court vacated the Commission’s December 2024 Rehearing Decision and the underlying charges, and remanded to the Commission for further proceedings.
 
A copy of the ruling is available.