Adverse Possession over land subject to utility easement

What is the name of your state? AZ

We recently bought a house in a subdivision that dates back to 1930. There is a recorded 5' utility easement on the boundary line between our neighbor and us at the back of our house (2.5' on each side of the boundary line). To avoid building a wall within the easement, the former owner of our property built a wall 2.5' within the boundary line of the property, which means that our neighbor has had beneficial use of the entire 5' for probably over 30 years. We would either like to 1) plant a hedge in back of the wall, which would require us to enter our neighbor's property, or 2) move the wall back 2.5' to the boundary line (the easement is not being used by any utility company, but has never been extinguished).

I imagine that doing 1) would require us to get our neighbor's consent. In terms of 2), might they have a claim that they have gained adverse possession to the 2.5' of our property (subject presumably to whatever rights the utility company has?)

This issue must come up all the time, since people don't like to build within utility easements. I know the best course of action is to get the other owner to sign an statement stating that they have permission to use the property, but this was never done.

2.5" sounds very minor, but in our case, we have a small backyard in an expensive area of town, and moving the back wall that distance could make a significant difference to us. We also want to maintain good relations with our neighbors, however.

First, until or unless the utility company legally abandons the easement, it still exists.

Second, there is no adverse possession without action. So, unless the neighbor has filed an action in court to posses the land, it's a moot point.

I thought that adverse possession could occur if there has been open, intentional use of property by others (what courts call "hostile" but which really isn't). In my case, my question is whether this can occur on property that is subject to a utility easement, where the previous owners of our property never intended to convey title to the other neighbor, but just didn't want to build within the easement. Are the rules different here?

Adverse possession can indeed occur on property with an easement.