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APS says data centers could help pay for new Arizona natural gas power plant

The natural gas unit at the APS Ocotillo Power Plant in Tempe.
Arizona Public Service
The natural gas unit at the APS Ocotillo Power Plant in Tempe.

As demand for energy from data centers grows, so are residential concerns that the power-hungry facilities are driving up their bills.

A newly announced gas power plant could be the testing ground for making sure data center energy costs aren’t passed onto residents.

The 2,000-megawatt Desert Sun Power Plant near Gila Bend will be done in two phases. The cost for the first phase will be covered by all users.

But officials at Arizona Public Service, which is building the plant, say the second phase will use a subscription model from large industrial users like data centers.

Jacob Tetlow is executive vice president with APS.

“They actually front some of the financials to help build it. They're committing to taking that energy for the long term. And then they get rights to that energy," Tetlow said.

He says the proposal still needs to be approved by the state agency that regulates utilities. Tetlow did not say how much the plant will cost to build, or how expensive the subscription models will be.

The gas will come from Texas through the Transwestern pipeline announced in August.

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Greg Hahne started as a news intern at KJZZ in 2020 and returned as a field correspondent in 2021. He learned his love for radio by joining Arizona State University's Blaze Radio, where he worked on the production team.