Arizona HVAC Regulatory Oversight for 2026: Complete Guide

Understanding Arizona HVAC regulatory oversight is essential for contractors, businesses, and homeowners navigating the state's energy landscape. Arizona's regulatory environment involves multiple agencies overseeing utility rates, contractor licensing, and energy policy in one of America's hottest and fastest-growing states. This comprehensive guide covers everything you need to know about Arizona HVAC regulations heading into 2026.

The regulatory oversight framework in Arizona affects how HVAC contractors operate, what utility rates consumers pay, and how energy infrastructure develops across the state. Whether you're an HVAC contractor seeking licensure or a business evaluating Arizona's energy market, understanding these regulatory structures is critical for success.

Arizona Corporation Commission: Primary Regulatory Oversight

The Arizona Corporation Commission (ACC) serves as the primary regulatory body for Arizona's investor-owned utilities. Established by Article 15 of the Arizona Constitution, the ACC is one of only fourteen states with elected commissioners. The Arizona Constitution explicitly calls for an elected commission, as opposed to a governor-appointed commission, because its drafters feared governors would appoint industry-friendly officials.

The ACC is composed of five elected commissioners serving staggered four-year terms. In 2000, Arizona voters approved Proposition 103, which expanded the Commission from three to five members, shortened terms to four years, and prohibited Commissioners from serving more than two consecutive terms. As of January 2025, the commissioners are Lea Márquez Peterson, Nick Myers, Rene Lopez, Kevin Thompson (Chair), and Rachel Walden.

The ACC's regulatory authority includes regulating public utility companies, regulating incorporation of businesses, securities regulation, and railroad/pipeline safety. The scope is generally larger than most Public Utility Commissions in other states.

The ACC does not regulate electric service provided by cities or municipalities, irrigation districts, electric districts, or utilities operated by tribal authorities. The Commission also does not regulate solar installation companies, cell phones, internet services, or cable TV.

Agency: Arizona Corporation Commission
Address: 1200 W. Washington Street, Phoenix, AZ 85007
Tucson Office: 400 W. Congress Street, Tucson, AZ 85701
Website: https://www.azcc.gov/

Understanding Arizona's Regulatory Environment for 2026

The regulatory environment in Arizona has seen significant changes in recent years. In August 2025, the all-Republican ACC voted unanimously to begin repealing the Renewable Energy Standard and Tariff (REST) rules established in 2006, which required utilities to generate 15% of energy from renewable sources by 2025.

Arizona's two largest regulated utilities have already exceeded the REST requirements: Arizona Public Service (APS) reports about 19% renewable energy in its portfolio, while Tucson Electric Power (TEP) reports about 29%. The Commission argues market forces will continue driving renewable development without mandates.

Key regulatory considerations for 2026 include the ongoing formula rate plan controversy, which consumer advocates argue allows utilities to raise rates annually without full rate cases. The Courts of Appeals has revived a lawsuit challenging this process, giving the Residential Utility Consumer Office (RUCO) the chance to argue the regulators must go through formal rulemaking.

Arizona HVAC Licensing Requirements for 2026

The Arizona Registrar of Contractors (ROC) governs all contractor licensing in Arizona, including HVAC contractors. To legally perform heating, air conditioning, and refrigeration work valued at more than $1,000 in Arizona, you must be a licensed contractor or work under someone who is licensed.

The state does not license technicians at the state level, but some Arizona cities (like Phoenix) do license at the journeyman level. Always check with local jurisdictions for additional requirements.

There are three types of HVAC contractor licenses in Arizona:

C-39 Commercial Air Conditioning and Refrigeration: For commercial and industrial HVAC work.

R-39 Residential Air Conditioning and Refrigeration (including Solar): For residential HVAC work.

CR-39 Dual Air Conditioning and Refrigeration: For both residential and commercial work.

Pathways to Arizona HVAC Licensure

To qualify for an Arizona HVAC contractor license, applicants must meet these requirements:

Experience: At least four years of practical HVAC experience in the relevant specialty. Up to two years can be from an apprenticeship.

Exams: Pass the Arizona Statutes and Rules Exam (SRE) with a minimum score of 70%, and pass the relevant Trade Exam (R-39, C-39, or both for CR-39).

Background Check: Complete a mandatory criminal background check.

Business Registration: LLCs and corporations must register with the Arizona Corporation Commission. Sole proprietorships and partnerships register with the Arizona Secretary of State.

HVAC License Fees and Requirements

The following fees apply to Arizona HVAC licensing in 2026:

R-39 License Fee: $720
C-39 License Fee: $580
Trade Exam Fee: Varies by exam
Surety Bond: $2,500-$50,000 for commercial (based on volume); $4,250-$7,500 for residential
License Renewal: Every two years

All Arizona HVAC contractors must carry general liability insurance and workers' compensation insurance if they have employees. EPA Section 608 Certification is required for any technician handling refrigerants.

Agency: Arizona Registrar of Contractors (ROC)
Phone: (877) 692-9762
Email: ask@azroc.gov
Website: https://roc.az.gov/

Reciprocal HVAC Licensing Agreements

Arizona allows open endorsement with all states where applicants hold similar licenses. Pursuant to Arizona Revised Statutes section 32-4302, a person shall be granted a license if they have been licensed in another state for at least twelve months in the same discipline and at the same practice level. The AZ Statutes and Rules Exam cannot be waived as it covers Arizona-specific laws.

Directory of Arizona Electric Companies

Arizona's electricity market includes major investor-owned utilities, electric cooperatives, and municipal utilities. Understanding the utility landscape is essential for HVAC contractors and energy service providers.

Arizona Investor-Owned Utilities

Arizona Electric Cooperatives

Arizona Municipal Utilities

Energy Policy and Renewable Energy in Arizona

Arizona's energy policy is in transition. The state ranked fourth nationally for solar-powered electricity generation in 2024, trailing only California, Texas, and Florida. Despite the move to repeal REST rules, market forces and corporate demand continue driving renewable development.

Key energy considerations for 2026 include:

Renewable Energy Standard Repeal: The ACC voted in August 2025 to begin repealing the REST rules. Utilities have already met or exceeded the 15% renewable requirement, and commissioners argue renewable energy can compete without mandates.

Data Center Demand: Arizona is seeing significant interest from data centers and large tech companies (Google, Microsoft, Amazon), many with their own clean energy goals that influence utility portfolios.

Grid Reliability: Legislation has been proposed requiring the ACC to ensure dispatchable energy increases by at least 5% between 2025 and 2030 before authorizing retirement of generation facilities.

Formula Rate Controversy: Consumer advocates continue challenging the ACC's formula rate plan process, which allows annual rate adjustments without full rate cases.