In the ongoing legal battle between the Goldwater Institute and the Arizona Corporation Commission (ACC) over the ACC's adoption of its Renewable Energy Standard and Tariff (REST) rules, the Arizona Court of Appeals has affirmed the Superior Court's ruling in favor of the ACC. In its opinion, the three judge panel concluded that the ACC's "promulgation of the REST rules falls within its plenary power over ratemaking under Article 15, Section 3" of the Arizona Constitution. The Phoenix Business Journal is already reporting that the Goldwater Institute is likely to appeal the ruling to the State's Supreme Court (subscription required).
The REST rules, among other things, require regulated utilities to obtain a certain percentage of their retail electricity sales from renewable resources. The required percentage increases from 1.25% in 2006 (the year the rules were adopted) to 15% in 2025. The Goldwater Institute believes the rules impose unnecessary costs on ratepayers but was largely prevented from making these arguments in court because it failed to participate in the public process used to develop the rules. Because it failed to participate in the rule-making process, the lawsuit was a collateral attack that could challenge only the ACC's authority to adopt the rules -- the court could not consider "whether the REST rules represent prudent public policy or make economic sense."