Now, Arizona’s largest monopoly utility, APS, is asking the Arizona Corporation Commission for yet another rate hike. Their double-digit 14% request is bad enough on its own. But buried within APS’ ask is something even worse: automatic rate hikes for the next five years (something the Corporation Commission voted in favor of just a year and a half ago).
It isn’t just APS. At the same time, the Commission is also considering a double-digit (also 14%) rate hike for TEP, along with automatic rate increases. Arizona ratepayers are now seeing the consequences of years of bad energy policy, costly clean energy commitments, and a Commission that has not stopped any of it.
Before APS’ rate request becomes a real rate hike on your bill, the Commission still has to vote on it. Right now, the case is before an administrative law judge, with hearings expected to continue through June and July. After the hearing concludes, the judge will issue a recommended order, and then the Corporation Commission will make the final decision.
So, the question now is simple: will the Commission finally say no, or will it force ratepayers to pay for the Green New Scam?
This Rate Hike Is Not Because of AI or Data Centers
APS, Kris Mayes, and the Corporation Commission would like ratepayers to believe this rate hike is about AI, data centers, and explosive load growth. It isn’t.
Depending on how growth from AI and data centers is managed, it very well could increase costs in the future, but it hasn’t yet. Rate cases lag behind utility investments. The utility spends money then determines it has a revenue deficiency—in other words, that the money it is recovering from ratepayers is not enough to pay its expenses and provide its guaranteed profit—and then applies to the Commission to include those new costs in rates.
This specific case is based on a historic test year: 2024. That may not sound very long ago, but in the age of AI, it was several generations ago, before the grid felt any major increase in electricity demand from data centers.
Look at APS’ peak demand over the last 15 years and compare it to the growth APS is projecting over the next 15 years. In 2010, APS’ peak demand was about 7,000 MW. In 2024, it was just over 8,000 MW. By 2038, APS expects it to be well over 13,000 MW.
Growth is coming. But it has not materialized yet, so it cannot be what is driving this current rate case. Data centers will undoubtedly bring immense demand to the grid, but they will also be paying immensely to get that power. Ideally, they would simply build their own generation. Some data center owners are already doing this around the country. They build the power. They build the lines. They pay all of it. Ratepayers pay nothing. Data centers in this rate case are pushing for the ability to do it here, but the utilities are opposing that effort. The utilities, it seems, would rather build it, sell the power to the data centers, and just give us their word that “growth will pay for growth.”
The Real Cause: Expensive Green Energy Projects
The real cause is much more obvious: expensive Green New Scam projects. We knew this was coming. It is why we opposed APS’ Integrated Resource Plan that was eventually approved by the Corporation Commission in 2024. It is also why we invested in a thorough cost analysis of APS’ plan after the Commission refused to do one itself.
What we found was alarming, but not surprising.
APS’ resource plan, designed to meet its “clean energy commitment,” relied almost exclusively on solar, wind, and battery storage, while shuttering remaining coal generation and building very little new natural gas. The result was a grid with nearly triple the nameplate capacity of today’s system, but less reliable capacity than APS has now.
And the cost? A staggering $42.7 billion, or roughly $100 per month for residential customers. That means ratepayers would be paying far more for a grid that is less reliable. Had APS conducted a true least-cost portfolio, it could have met future demand with far less capacity and at a fraction of the cost. But APS did not do that. And the Commission did not direct them to do it either.
How We Got Here
So how do we get from clean energy promises to double-digit rate hikes? It’s not complicated. In 2020, APS made a clean energy commitment to go 100% clean and carbon-free by 2050. In 2023, APS produced a resource plan to meet that commitment. In 2024, the Corporation Commission approved the plan. APS then used that plan to structure its Request for Proposal process around the same green energy goals.
The RFP required that at least 70% of the resources procured be “clean.” The scoring matrix awarded more points to carbon-free resources. And in the end, APS announced that 93% of the energy contracted for in that RFP was clean.
To put it simply, APS committed to go Net Zero. They wrote a plan to achieve it. They crafted an RFP to deliver it. They contracted for renewables to actualize it. And now, APS is asking ratepayers to pay for it.
To make this real, the single most expensive project APS is seeking recovery for in this rate case is a battery storage facility, called Agave BESS. Compared to natural gas, Agave BESS costs 41% to 92% more. That is why we intervened in this case, why we submitted testimony from two expert witnesses, and why we are actively cross-examining APS’ witnesses. We do not believe ratepayers should bear the costs of radical environmental commitments.
But it might leave people wondering why APS would choose the more expensive option if a lower-cost option was available. The answer was already provided above: APS had already committed itself to green energy, and its executives tied their compensation to keep it going.
APS linked executive compensation to its clean energy goal. It linked executive compensation to capital spending. And because utilities earn a return on capital investment, more spending means higher shareholder returns. In other words, APS executives were incentivized to build more renewables, incentivized to spend more money on them, and incentivized to grow the utility’s capital base.
If the Commission does not say no, ratepayers will pay the price.
Now ratepayers are being asked to pay for the consequences. That is why we are in this fight. We are providing evidence and expert testimony to urge the Commission not to make ratepayers pay for imprudent decisions. The Commission didn’t stop the clean energy commitments. They failed to stop the Green New Deal resource plans. They failed to stop the RFP process weighted to build solar, wind and battery storage. They failed to stop the utilities from tying executive compensation to building green energy.
But now they have a chance to stop the rate hikes that flow directly from those decisions.
This should be an easy decision. The Commission should say no to making ratepayers pay for expensive renewables and it must say no to automatic rate hikes.
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After months of vetoes and walking away from the table, Hobbs has finally signed a budget. A budget that looks pretty much the same as the one Legislative Republicans sent up to her desk at the beginning of May. A budget she vetoed, and that she and her colleagues in the Legislature bashed repeatedly. So, what changed?
There were two budget priorities our organization laid out before the session began. First, anything less than full conformity tax relief from Trump’s Big Beautiful Bill would essentially be a tax hike on Arizonans. Second, an extension of Prop 123 (the increased distribution from the state land trust to K-12 schools to the tune of $330 million a year) must be a nonstarter in budget negotiations. Before getting into the details, both of these objectives were accomplished.
The biggest item in this budget fight was undoubtedly tax cuts from tax conformity. After President Trump signed the Big Beautiful Bill into law on 4th of July 2025, states faced a decision: do they pass on the tax relief Republicans in D.C. delivered, or do they effectively increase taxes on their residents. Core planks of conformity included no tax on tips, no tax on overtime, an increased standard deduction, a new deduction for seniors, among several provisions for small businesses and corporations of all sizes, most importantly allowing them to deduct expenses in the year they are made, rather than depreciating those expenses over several years. In other words, the bulk of the business provisions weren’t even a tax cut. The question is not whether businesses deduct those expenses, only when they deduct them.
This question needed to be resolved quickly, as the legislature begins session the second week of January and Tax Day is in April. In the first week of session, Republicans in the legislature sent a package to her desk that delivered full tax relief. All democrats voted no. Hobbs vetoed it.
Again, in February, to prevent confusion and chaos for taxpayers beginning to file, Republicans in the legislature sent up another bill. It received a veto. At the beginning of May, they sent up a budget that included full tax conformity relief for the third time. Again, it met a veto.
Based on all of the votetoes, relentless opposition and endless rhetoric about “tax breaks for billionaires,” you would think that the agreed upon budget must have included significant changes to the tax package. But if you are thinking that, you would be very wrong.
So What did Hobbs and Democrats actually fight for in this budget that necessitated six months of chaos and tax season confusion?
Subsidies and Tax breaks for large corporations.
That’s right. For every $1 in tax breaks for corporations that Democrats claim they removed from the Republican budget, Hobbs and her cronies added back in $3.67 in additional subsidies for her corporate friends.
Hobbs eliminated a $45.5 million deduction that all corporate entities receive with a $150 million targeted subsidy program that will primarily benefit out of state and foreign owned corporations.
Hobbs is bragging about a three-year moratorium on a data center tax credit (a credit that she supported when in the legislature) that saves $57 million over three years, but leaves out that she demanded $167.7 million in subsidies for massive solar and wind farms. These are the projects spamming our grid and land (in fact her own Land Department put out a map of state trust land prioritizing solar farms over housing) kicking multigenerational ranchers off their land to line the pockets of multibillion dollar foreign solar developers.
If that wasn’t enough, she fought to get an additional $58.5 million for the Arizona Competes Fund, a slush fund for Hobbs to give handouts to her corporate friends. A slush fund that unconstitutionally spent $2.4 million for Superbowl tickets and alcohol for out of state corporate executives.
You add it all up, and it turns out the only change Hobbs made to the budget was to increase corporate welfare spending by $274 million, essentially the entire dollar difference compared to the Republican budget she vetoed.
Outside of that, every other change is a rounding error. Instead of a 5% budget cut to agencies, it became 2.5%. And then there were $500,000 appropriations here, a million there, out of an $18 billion budget. Basically, the same spreadsheets. And wildly different from her proposal in January.
Months of gridlock, chaos and confusion. And for what? So Pay to Play Katie could extract hundreds of millions in handouts for her politically connected friends. That is what a budget “win” looks like to Governor Hobbs.
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For generations, Arizona’s wide-open land has supported ranchers, farmers and the communities that helped build our great state.
Then, the climate activists came along.
Armed with nothing more than junk science from climate “experts” like Al Gore and Alexandria Ocasio-Cortez, they got busy imposing costly green energy mandates on states across the country—and Arizona’s political and corporate elites eagerly fell in line. Our state’s utilities committed themselves to achieving “Net Zero” emissions by 2050, a goal that will cost ratepayers billions of dollars while doing little to meaningfully impact the environment.
But higher utility bills are only part of the cost.
Not wanting to disappoint some of her largest campaign contributors, Arizona Governor Katie Hobbs has been quick to bend the knee to the Green New Scam time and time again. Now, these decisions are not only hitting families in the wallet, but they are transforming our state’s beautiful countryside into an industrial playground for massive, foreign-backed solar and wind developments.
Under Hobbs, the Arizona State Land Department has increasingly operated like a business partner for the solar industry instead of a steward of Arizona’s public lands. The agency now maintains detailed maps identifying the “best” locations for solar development across the state, effectively helping direct industrial solar companies toward Arizona’s most desirable land.
But surely, they must be doing the same for other industries?
Nope.
The state does not provide similar priority maps for housing, mining, grazing, or other industries. For the Hobbs administration, it appears sprawling solar projects are a much bigger priority over new housing, ranching, and rural economic activity.
And now Arizona ranchers are beginning to pay the price.
Just look at Navajo County for example. Thanks to Katie Hobbs’ desire to flood Arizona’s deserts with solar panels, rancher Casey Murph and his family are now fighting to preserve a multi-generational cattle operation that predates Arizona statehood itself! For over a century, their ranch has been part of Arizona’s agricultural backbone—raising cattle, maintaining grazing land, and sustaining a way of life rooted in stewardship of the land rather than industrialization of it.
Today, that legacy is under direct threat.
Murph and his family are facing the possibility that their state grazing lease could be altered or eliminated to make way for a large-scale solar development, effectively displacing ranching operations in favor of industrial energy production.
What was once productive rangeland supporting Arizona’s beef supply is now being evaluated as potential real estate for sprawling solar installations, driven by state-level policies that increasingly prioritize renewable energy expansion over traditional land use.
For Murph and families like his, this is not an abstract policy debate. It is the very real prospect of losing their livelihood, their land access, and a generational legacy of ranching in Arizona.
But they’re not the only ones affected.
While ranching is a part of Arizona’s heritage, it is also a critical part of our food supply chain. As more productive grazing land is converted into utility-scale solar and wind projects, Arizona families will ultimately feel the impact in the grocery aisle through higher beef prices and reduced domestic supply.
In other words, the Hobbs administration is willing to kill our ranching industry and make beef cost even more, all so we can put up more ugly solar panels and wind projects.
It’s insane. And it all needs to be shut down.
Instead of prioritizing sprawling land-intensive energy projects, the state should be focused on expanding proven, reliable generation like natural gas, coal, and nuclear power. These resources save ratepayers money and require a fraction of the land footprint, without the threat of blackout.
If Katie Hobbs truly cared about affordability, reliability, and policies that serve Arizona families, she’d make this happen. But for the last few years, Hobbs has shown she only cares about the political agendas that serve her interests. We can’t expect that to change now.
Help Protect Freedom in Arizona by Joining Our Grassroots Network
Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!
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PHOENIX, ARIZONA – The Arizona Freedom Club PAC today announced its endorsements in several key local races throughout the Phoenix metropolitan area, backing candidates committed to protecting taxpayers, promoting public safety, and advancing conservative leadership in their local communities.
“These candidates understand the importance of accountable government, strong communities, and protecting the freedoms and values that make Arizona exceptional,” said Scot Mussi, Chairman of the Arizona Freedom Club PAC.
Primary Endorsements – Local
Fountain Hills Town Council
Mathew Corrigan Ben Larrabee Dan Kovacevic
Glendale City Council
Michael Calles (Barrel District)
Mesa City Council
Aleks Vranicic – District 5 Ray Johnson – District 4
Scottsdale City Council
Michelle Ugenti-Rita Barry Graham
Freedom Club PAC is dedicated to advancing policies that protect liberty, promote economic opportunity, and hold government accountable for Arizona taxpayers.
PAID FOR BY THE FREEDOM CLUB PAC, with 0% from out-of-state contributors. Not authorized by any candidate or candidate’s committee.
For decades, Arizona has been a national model for how to responsibly manage and develop water resources. As a result, our state has enjoyed years of economic growth while welcoming millions of new residents to live and work here.
Then, Governor Katie Hobbs came along.
In 2023, the Hobbs administration imposed sweeping new water rules that effectively halted new home construction across much of the Valley, under the guise that it was needed to “save water.”
Now, a court has struck down the policy, ruling that state regulators ignored the law when creating the rules behind it. But the fallout from this disastrous decision is only beginning. And Arizona taxpayers could soon be forced to pay more than $1 billion for the damage.
Arizona Is Not Running Out of Water
Despite the alarmist rhetoric coming from Hobbs and the Arizona Department of Water Resources (ADWR), our state is not running out of water.
In fact, our state uses less water today than it did in 1990—even though our population has doubled to more than 7 million residents. That’s not a typo. Over the past three decades, Arizona has welcomed millions of new residents while reducing total water consumption.
How is that possible? Through better water management, technological advancements in conservation and reuse, and the gradual conversion of agricultural land to residential development. The result is a system that has allowed Arizona to grow responsibly while protecting its long-term water supply.
But instead of building on this successful model, Hobbs declared a sweeping housing moratorium—halting new single-family housing construction across much of the Phoenix metropolitan area.
A Manufactured Crisis With Real Consequences
In addition to destroying billions in economic activity and further exacerbating the housing shortage crisis, Hobbs’ moratorium created a number of additional problems.
Her rule did not halt development across the board. Instead, it targeted the construction of much-needed single-family homes while allowing all other forms of development—including apartments, condos, and data centers—to continue moving forward.
This makes zero sense from a water policy standpoint. Prior to the Hobbs’ moratorium, single-family housing in Arizona was already required to demonstrate a 100-year assured water supply before construction can begin. Commercial and industrial has no such requirement, despite consuming substantially more water per acre than residential subdivisions.
Even more absurdly, Hobbs’ moratorium blocked one of the very activities that actually reduces water consumption in Arizona: converting agricultural land into residential communities.
In most cases, farmland uses significantly more water than single-family housing developments. When agricultural land is converted into neighborhoods, overall water usage can decline dramatically. Yet Hobbs’ moratorium stopped precisely the kind of development that lowers water use while creating a perverse incentive for landowners to pursue water-intensive commercial and industrial projects that bypass both the 100-year certification requirement and the moratorium.
In effect, Hobbs figured out a way to implement a policy that will likely increase water usage in Arizona, not decrease it.
Hobbs Loses in Court — Taxpayers Could Be on the Hook for More Than $1 Billion
Last month, a Maricopa County Superior Court judge struck down the Hobbs administration’s housing moratorium, ruling that state officials failed to follow Arizona law when creating the new water rules.
It’s another in a long line of embarrassments for Katie Hobbs. The court made clear that her administration attempted to impose sweeping new regulations without going through the legal process required under state law.
But the consequences of her failed policy may not end there.
Because Hobbs’ moratorium stopped or delayed major housing projects across the Valley, Arizona taxpayers could now be forced to compensate property owners harmed by the policy. Developers have already filed claims seeking hundreds of millions of dollars in compensation. And if additional lawsuits are filed, total taxpayer costs could exceed $1 billion.
That’s right. At a time when Arizona families are already struggling with higher housing costs, inflation, and budget pressures, taxpayers may be forced to clean up another mess created by Katie Hobbs.
This should serve as a warning to every person in our state.
For decades, Arizona successfully balanced economic growth with responsible water management. But instead of trusting that proven system, the Hobbs administration chose fearmongering, unlawful regulations, and an anti-growth agenda that harmed homebuilders, squeezed working families, and may now leave taxpayers with a billion-dollar bill.
Arizona voters cannot afford to forget it this November.
Help Protect Freedom in Arizona by Joining Our Grassroots Network
Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!
Join our FREE Grassroots Action List to stay up to date on the latest battles against big government and how YOU can help influence crucial bills at the Arizona State Legislature.
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