If you've ever tried to shop for a cheaper electricity plan in Arizona, you've probably noticed there's nothing to shop for. That's not a broken website — it's the system working as designed. Arizona is a regulated electricity state, and in 2021 it closed the door on retail competition for good. Here's why there's no provider to choose, what your rate actually reflects, and what a homeowner can do instead of shopping around.
The straight answer
No, you cannot choose your electricity provider in Arizona. Whichever utility serves your address — Arizona Public Service (APS), Salt River Project (SRP), Tucson Electric Power (TEP), or a local municipal or cooperative utility — is your only option. There is no Power to Choose-style marketplace, no list of competing suppliers, and no plan comparison to run, because Arizona does not allow retail electricity competition.
This wasn't always fully settled. In the late 1990s Arizona experimented with rules that would have let some customers shop for a supplier the way Texas or Ohio residents do today. That experiment never scaled statewide, and in 2021 the Arizona Corporation Commission formally repealed the retail-competition rules that made even limited choice possible. Today the state is unambiguously regulated: one utility per territory, and that utility's rates are set through public oversight rather than a competitive market.
That's not automatically bad news. Regulated monopoly service means your utility can't lose you as a customer to a cheaper competitor, but it also means it can't raise your rate unilaterally — every rate change has to survive a public case in front of regulators. The trade is stability for choice. The rest of this guide is about what a homeowner can actually control inside that trade.
What power costs in Arizona
Arizona's average residential electricity rate was 15.3 cents per kWh in 2025, per EIA's preliminary data. That's up 73 percent since 2005, and the pace over just the last decade has run about 2.4 percent a year — not a spike, but a steady, compounding climb. The chart below shows the full federal price history for Arizona, with a dashed projection of where the rate goes if the last decade's pace simply continues. Drag across it, or compare Arizona against another state.
Full Arizona electricity price data (1990–2025)
| Year | Arizona (¢/kWh) | US avg (¢/kWh) |
|---|---|---|
| 1990 | 9.0 | 7.8 |
| 1991 | 9.1 | 8.0 |
| 1992 | 9.6 | 8.2 |
| 1993 | 9.7 | 8.3 |
| 1994 | 9.3 | 8.4 |
| 1995 | 9.1 | 8.4 |
| 1996 | 9.0 | 8.4 |
| 1997 | 8.8 | 8.4 |
| 1998 | 8.7 | 8.3 |
| 1999 | 8.5 | 8.2 |
| 2000 | 8.4 | 8.2 |
| 2001 | 8.3 | 8.6 |
| 2002 | 8.3 | 8.4 |
| 2003 | 8.4 | 8.7 |
| 2004 | 8.5 | 9.0 |
| 2005 | 8.9 | 9.5 |
| 2006 | 9.4 | 10.4 |
| 2007 | 9.7 | 10.7 |
| 2008 | 10.3 | 11.3 |
| 2009 | 10.7 | 11.5 |
| 2010 | 11.0 | 11.5 |
| 2011 | 11.1 | 11.7 |
| 2012 | 11.3 | 11.9 |
| 2013 | 11.7 | 12.1 |
| 2014 | 11.9 | 12.5 |
| 2015 | 12.1 | 12.7 |
| 2016 | 12.2 | 12.6 |
| 2017 | 12.4 | 12.9 |
| 2018 | 12.8 | 12.9 |
| 2019 | 12.4 | 13.0 |
| 2020 | 12.3 | 13.2 |
| 2021 | 12.5 | 13.7 |
| 2022 | 13.0 | 15.0 |
| 2023 | 14.0 | 16.0 |
| 2024 | 14.9 | 16.5 |
| 2025 * | 15.3 | 17.3 |
Source: US EIA, average residential retail electricity price. Values in cents per kWh. * 2025 is preliminary.
Read that 73 percent honestly: it isn't one bad year, it's two decades of rate cases each nudging the number up a little. A household paying $150 a month in 2005 dollars, adjusted only for that rate increase, is paying roughly $260 today for the same usage — before accounting for the fact that Arizona summers and larger homes have likely pushed usage up too. That combination — a rate that reliably climbs and a state where air conditioning runs half the year — is exactly why the "what can I control" section below matters more in Arizona than in a mild climate with a flat rate.
Why your rate is set this way
In a regulated state, your rate isn't a market price — it's the output of a legal process called a rate case. Your utility periodically files a request with its regulator (the Arizona Corporation Commission for APS, TEP, and most co-ops; an elected board of directors for SRP, which is a different kind of public entity) laying out its costs: fuel and purchased power, grid maintenance and upgrades, storm hardening, and a regulator-approved return on its infrastructure investment. Consumer advocates, large customers, and the public can weigh in. Regulators then approve, trim, or reject the request, and the resulting rate applies to every residential customer in that utility's territory equally.
Two things drive the number up over time. First, fuel and purchased-power costs move with natural gas prices and the broader energy market — Arizona's generation mix includes nuclear, natural gas, coal being phased down, and a fast-growing share of solar. Second, grid investment is real and ongoing: new transmission, substation upgrades, and wildfire and heat-resilience spending all get folded into future rate cases. None of this is something an individual homeowner can negotiate — the rate case is public, but it isn't personal.
How to actually lower the bill
Since you can't shop for a cheaper provider, everything that moves the needle in Arizona happens on your side of the meter or inside your rate plan's structure — not by switching companies.
Efficiency first. Air conditioning is the dominant line item on almost every Arizona summer bill. A programmable or smart thermostat, a properly sized and maintained AC unit, sealed and insulated ductwork, attic insulation, and reflective or shaded windows do more for an Arizona bill than anything else on this list. If you haven't had ducts inspected for leaks, that's often the single highest-return fix in the state.
Rate structure, not rate shopping. APS, SRP, and TEP all offer time-of-use and demand-based rate plans alongside their standard flat rate. Arizona's peak demand hits in the late afternoon and early evening as the day's heat peaks and people get home from work. A household that shifts laundry, dishwashing, and thermostat pre-cooling to off-peak hours — cooling the house down before 3 p.m. rather than fighting the heat at 6 p.m. — can often cut 10 to 20 percent off the bill on a time-of-use plan without using less energy overall, just using it at a cheaper time.
Budget billing for volatility. If the problem isn't the annual total but the swing between a $90 January bill and a $340 August bill, ask your utility about budget or levelized billing. It averages your estimated annual cost into equal monthly payments with a periodic true-up, which doesn't lower your total cost but makes it predictable — useful for anyone on a fixed monthly budget.
Solar, weighed honestly. A rate that's climbed 73 percent since 2005 with no sign of flattening is exactly the condition that improves rooftop solar economics: every future rate increase is a cost you avoid on the portion of usage you generate yourself. Arizona's sun hours make the generation side of the math favorable. But the payback period depends heavily on your specific utility's net metering or net billing compensation rules, which differ between APS, SRP, and TEP and have changed in recent years — work through the specifics in our solar panels guide before signing anything.
The practical checklist
- Confirm your utility and rate plan. Find your provider (APS, SRP, TEP, or a co-op) and your current rate plan on your last bill — you can't compare options until you know your baseline.
- Ask about time-of-use or demand plans. Request a usage-based comparison from your utility using your actual billing history, not a generic estimate.
- Fix the AC system first. Filter changes, duct sealing, and a smart thermostat typically outperform any rate-plan switch in dollar terms.
- Consider budget billing if your goal is a predictable monthly payment rather than a lower annual total.
- Check your home's broader electrical health. Our electrical guide covers panel capacity and wiring issues that can also affect efficiency and safety.
- Run the solar numbers against your actual utility's terms before committing — net metering rules vary by provider in Arizona and materially change the payback period.
Sources
- U.S. Energy Information Administration — Arizona average residential electricity rate (15.3 cents per kWh, 2025 preliminary) and the 1990-2025 historical price series shown in the chart.