Arizona Data Center Growth Lacks Uniform Public Planning
By Drew Williamson
©2026 Williamson News Service LLC
Proposed large data centers could be bringing higher electric rates, dwindling water supplies and increased pollution to Arizona in the absence of uniform public planning.
The state’s relatively cheap land is attracting the data centers, which have tremendous appetites for electricity and water.
How many data centers do the people of Arizona need? How many data centers can the people of Arizona afford? What is the best design for a data center in Arizona? These and other basic economic planning questions remain unanswered.
Large data centers have been proposed for Tonopah (804 megawatts), Marana (550-750 megawatts) and Southeast Tucson (286 megawatts). Arizona currently has 161 data centers: 151 in the Phoenix area; 9, Tucson area; and 1 near Nogales, according to Data Center Map https://www.datacentermap.com/usa/arizona/
Focusing on clean, renewable solar, wind and geothermal sources seems to be a possible solution for the data center growth dilemma but the current economic and political environment is tilting away from renewable energy. Solar and wind energy are the two cheapest sources of electrical power. https://www.statista.com/chart/35117/levelized-cost-of-energy-generation-by-source/
The federal government has moved away from renewable energy in favor of oil, coal and nuclear power. The 28% federal tax incentive for new residential solar projects was repealed starting this year. Wind power projects have been throttled. Permitting for renewable energy projects now requires several levels of new review and sign off.
One environmental advocacy group claims canceled or delayed solar and wind projects would be sufficient to power 13 million homes nationwide. https://climatepower.us/energy-crisis/
Data centers are an important part of national defense, said Nick Myers, chairman of the Arizona Corporation Commission, which oversees rates for private utilities such as Arizona Public Service. Myers agreed to being interviewed for this story with the understanding that his comments are his own opinions and not necessarily those of the other members of the commission.
If the next war is fought using artificial intelligence, then the U.S. doesn’t want to be disadvantaged compared to possible adversaries, such as China, Myers said. He doubts that solar energy could provide enough electricity to meet the expected increase in demand. He endorses a mix of energy sources.
Here’s the mix we have now in Arizona: Natural Gas, 45%; Coal, 10%; Nuclear, 22%; Hydroelectric, 4%; Wind, 1%; and Solar, 15%. https://www.gridinfo.com/arizona
Solar might work for smaller data centers but several proposals require large amounts of electricity, Myers said. As a result of rapidly increasing demand and changes in federal energy policy, Myers sees the mix tilting more toward natural gas, coal and nuclear.
A data center is a collection of computer servers. The older, smaller centers were used to access information through the internet. The newer centers are much larger and are used for computer services that require more power, such as to support artificial intelligence. For example, an older, smaller data center would require 1-5 megawatts of electricity. The new larger data centers can require 20-1000+ megawatts of continuous power. A large data center (100 megawatts) would use the same amount of electricity as a small city of 20,000 to 75,000 homes. https://iaeimagazine.org/electrical-fundamentals/how-much-electricity-does-a-data-center-use-complete-2025-analysis/
Super-sized data centers to serve the growing artificial intelligence (AI) industry have taken electrical rates in Arizona from a fairly level rate of growth to a steep rise in the last 5 years – a rise that projects to even higher electrical rates if left unchecked. Because many data centers require cooling with water, this trend of increasing electrical use is expected to cause water supply problems as well. Arizona Public Service recently submitted a 14% rate increase request, based in part on expected data center demand. Electrical energy rates have jumped 6% nationwide in 2025, according to a study by Goldman Sachs. Electricity is going up more than twice as fast as inflation (2.9%). Prices are expected to rise through the end of the decade. Data centers will push 40% of the growth in electrical demand, Sachs reported. https://www.cnbc.com/2026/02/12/electricity-price-data-center-ai-inflation-goldman.html>
Recent political developments might point a way forward for data center growth.
A bi-partisan bill has been introduced in the U.S. Senate that would provide 4 main guardrails for data center growth according to NBC News:
*No price increases for consumers;
*Priority grid access to everyday electricity users;
*Data center operators would be required to use off-grid sources for electricity, including a 10-year off ramp for existing data centers;
*Data centers would be required to publicly disclose current and future power usage.
The bill, introduced by Sen. Josh Hawley (R-Mo) and Sen. Richard Blumenthal (D-Conn), follows a similar bill introduced in the Senate and 3 similar bills in the House. Pres. Donald Trump has expressed strong support for both data center growth and protection of rates paid by consumers. https://www.nbcnews.com/politics/congress/senators-introduce-first-bipartisan-effort-curb-utility-bill-hikes-rel-rcna258577
Noticeably missing from the bill is protection for water users.
In Pennsylvania, that need has been partially addressed in a policy proposal “Governor’s Responsible Infrastructure Development” put forth at the state level by Gov. Josh Shapiro (D-Penn) who called for “the highest level of water conservation.” https://www.nbcnews.com/politics/2028-election/josh-shapiro-unveil-plan-managing-data-center-boom-pennsylvania-rcna257087
In Illinois, a state bill was signed into law in January to create an integrated energy planning process. “This process will find cost-effective ways to keep energy bills low and make necessary adjustments to State programs. The Illinois General Assembly will also have a period of time to reject any Illinois Commerce Commission (ICC) decisions to raise rates.” https://gov-pritzker-newsroom.prezly.com/gov-pritzker-signs-historic-clean-and-reliable-grid-affordability-act
The task of creating an integrated energy planning process in Arizona would require considerable changes to the current laws, according to Autumn Johnson, executive director for the Arizona affiliate of the Solar Energy Industries Association.
The Arizona Corporation Commission sets pricing for non-public electrical utilities, like Arizona Public Service and Tucson Electric Power. The governor and her agencies, the state legislature, city and town councils, county boards of supervisors, and private and public utilities (such as Salt River Project) all have substantial impact on energy policy in Arizona.
A unified energy planning agency in Arizona similar to the one just created in Illinois probably isn’t needed, Myers said. While the commission doesn’t approve plans, it does make sure that the utilities it oversees do plan, he said. The commission does planning with the governor’s Office of Resiliency.
The governor’s office had an energy planning program for 40 years. The program helped the state win more than $100 million in federal grants before being eliminated by then-Gov. Doug Ducey in 2015 to cut government overhead.
One of Gov. Katie Hobbs (D-Ariz) first steps in 2023 was to empower the Office of Resiliency. The goal of the office is to unite water, land use, transportation, and energy policy areas under one umbrella, with the purpose of providing leadership that addresses the compounding threats to Arizona’s water, natural resources, and impacts of the climate crisis.
The program lacks the teeth of the new integrated energy planning process in Illinois, resulting from a new law which was created by an act of the legislature and the signature of the governor.
In March, the governor is expecting to receive recommendations from her Arizona Energy Promise Task Force, a 38-member group with representatives from utilities, business, state government and consumer advocacy groups. The task force has been at work for the last 5 months. The topics being studied include large load growth from data centers, nuclear energy, geothermal energy, and generation and transmission.
“I am not an advocate for data centers,” Johnson said. She does understand the value of artificial intelligence. “Bring your own power” is a good goal for data centers, she said, adding that air-cooled processes use less water.
Air-cooled data centers that rely on solar energy and wind power don’t require great volumes of water or generate great amounts of air pollution.
One idea that has been raised is for data centers to purchase “Renewable Energy Credits” to off-set the effects of using non-renewable sources on site. While helpful to the greater good in general, Renewable Energy Credits won’t help local residents if they experience air pollution or water supply problems.
“Opponents highlight that by purchasing RECs a customer can claim emissions ‘reduction’ even if they do not actually reduce their end-use at all - or even increase it. Proponents counter that more REC purchases drive increased production of renewable power which can replace conventional production,” according to Wikipedia https://en.wikipedia.org/wiki/Renewable_energy_credit
Google seems to be setting a course for using more renewables in the future. Google has partnered with NextEra Energy and Salt River Project to power Sonoran Solar Energy Center. a 260-megawatt (MW) solar facility with the ability to charge a 1 gigawatt-hour (GWh) battery energy storage system. The plant is located south of Buckeye. https://media.srpnet.com/arizonas-largest-battery-is-now-operating-on-srps-power-grid-supporting-google-along-with-other-clean-energy-resources/
The tech giant also has recently signed contracts for a total of 1200 megawatts (1.2 gigawatts) of solar electricity to power data centers in Texas. https://www.msn.com/en-us/money/news/totalenergies-locks-in-15-year-solar-deal-to-power-googles-texas-data-centers/ar-AA1VYQJI
Myers is optimistic about the use of nuclear power for electrical generation. It offers reliability that offsets the intermittent problems for renewables when the sun doesn’t shine and the wind doesn’t blow. Also, technological strides have been made in the recycling of nuclear waste, he said. A nuclear waste recycling facility – the first of its kind – has been announced in Tennessee. https://www.oklo.com/newsroom/news-details/2025/Oklo-Announces-Fuel-Recycling-Facility-as-First-Phase-of-up-to-1-68-Billion-Advanced-Fuel-Center-in-Tennessee/default.aspx
Several other large data centers powered by solar energy have already been built, including: Switch SuperNAP (315-495 megawatts) in Las Vegas; Eagle Mountain (800 MW) in Utah; and Moro Hub (100 megawatts) in Dubai. The solar power for the Moro Hub comes entirely from on-site solar generation. https://energydigital.com/top10/top-10-data-centres-using-100-renewable-energy
Solar-powered data centers do require more land than conventionally-powered centers. Practical challenges like the lack of sunshine at night can be managed with battery storage and links to the existing power grid.
“Flexibiity” is a word that is increasingly being applied to data centers. While solar and wind energy might not be able to provide power 24/7, perhaps a more sustainable strategy might involve supplementing renewable power with battery storage and traditional sources. https://www.forbes.com/sites/annabroughel/2026/02/16/flexible-data-centers-soon-to-run-on-batteries-and-renewables/
The attraction of more tax revenue and local jobs provided by data centers is powerful. But public concerns over electricity prices, water supplies and air quality are proving to be powerful as well. Consider the “Project Blue” proposal in Tucson, which was relying on city council approval to access city water. Public sentiment has proven so strong that the council declined approval and the project is in limbo. https://www.theguardian.com/us-news/2025/oct/15/tucson-arizona-ai-data-center-project-blue
Jess White is a spokesperson for the Arizona chapter of Solar United Neighbors (SUN), a nationwide group with about 78,000 members in Arizona. She said there is a great deal of disappointment with the repeal of the federal tax incentive for residential rooftop solar. The decision is especially disappointing for people who were unable to have solar installed before the tax incentive was repealed at the end of 2025.
Myers said residential solar systems present a challenge for utility companies. The utilities are expected to be able to take excess residential solar power whether they need it or not. The problem is less challenging if the residential systems have battery storage to help manage the load, he said
Drew Williamson is a freelance writer in Arizona. His professional expertise includes newspaper reporting and editing, advertising sales and management, and investment advising and retirement planning. He has a BA in Journalism/Political Science from the UA in Tucson and a MBA in Strategic Management from ASU in Tempe. He is a proud member of the Valley of the Sun Chapter of the Society of Professional Journalists (SPJ).
