The state's highest court refused Tuesday to overturn a requirement on utilities to generate at least 15 percent of their power from renewable sources by 2025.
Without comment, the Arizona Supreme Court refused to hear arguments by the Goldwater Institute that the Arizona Corporation Commission exceeded its constitutional authority in imposing the mandate. The lawsuit challenged not only the requirement but the legality of the surcharge that utilities are passing along to their customers.
Tuesday's ruling does not end the legal fight. It simply means that the justices are unwilling to wade in at this point - if ever.
Clint Bolick, director of the Center for Constitutional Litigation at the organization, said the case will be refiled, either in Maricopa County Superior Court or perhaps at the Court of Appeals. Bolick said he still believes a case can be made that the requirement is illegal.
But Kris Mayes, one of the members of the commission, said the ruling is still a victory because it leaves the mandate in place. "This is good news for renewable energy in Arizona," she said.
At the heart of the dispute is a decision by the commission that alternate sources of energy should become part of each utility's energy "portfolio." That includes not just solar but also wind, geothermal and biomass.
Recognizing the higher costs - at least now - the commission agreed to let the utilities charge higher rates. For residential customers that is capped at $2 a month for Tucson Electric power, $1.32 at Arizona Public Service and $1.05 elsewhere.
Commercial and industrial users can be forced to pay more.
Commissioners said the mandate - and the charges - make sense, not only to cut greenhouse gas emissions but to force utilities to diversify their sources of energy.
Bolick said whatever the merits of those goals, the move is illegal.
"The Corporation Commission has no constitutional authority over energy policy," he said.
Bolick said an argument might be made that the regulators could force an individual utility to diversify its energy sources if its current activities are jeopardizing future energy supplies.
"But here the commission is simply making a broad assumption that it knows what energy supply will look like for the next two decades," he said. "That's as ludicrous as it is arrogant."
"I think it's ludicrous and arrogant not to plan for Arizona's energy future and continue to rely on fossil fuels," Mayes responded.