The Arizona Corporation Commission has approved the latest version of data center Project Blue in Tucson. The Pima County Board of Supervisors voted to approve the land sale of a 290-acre stretch of unincorporated land for the project earlier this year.
This latest proposal would use electricity from utility company Tucson Electric Power — or TEP — to power and cool off the facility, which would aim to be operational by 2027.
Its developer, Beale Infrastructure, originally proposed using city of Tucson water to do that, but local leaders rejected the plan.
ACC commissioners voted 4-1 to allow TEP to power the project.
Commissioner Rachel Walden — the sole no vote — said she understood data centers are of interest to the federal government, and understood TEP was trying to provide service to Beale as it would any other customer.
But said she was skeptical a data center would actually come to fruition in this case.
“You know, my role exists to make sure that people are paying a just and reasonable rate of service,” she said. “If Google, Amazon or Microsoft were here today, I'd be questioning them. I'd be directing all these questions at them. What are you going to do to pay for it?,” she said during the Dec. 3 hearing.
Walden also pointed out that the energy the data center is requesting — nearly 300 megawatts — was enough to power as many as 270,000 homes.
The hearing comes amid reports that Amazon Web Services — the company that originally planned to operate inside the data center — has pulled out of the deal. Public records obtained by the Arizona Luminaria show Amazon has been behind the project since 2023, but its role was not made public until the project came under intense public scrutiny this summer.
It’s not clear who the new customer would be should the project move forward now.
Commissioners questioned leaders with Beale and TEP about rate impacts and whether the data center would be required to pay a special subsidy for the extra power it needed.
Erik Bakken, senior vice president and chief administrative officer at TEP, argued the company had the power to sustain a data center without raising rates.
“As it stands today, we believe we’ve got a gold standard, special contract for a data center with existing resources and existing capacity,” he said.
Almost two dozen people came to the hearing to speak out against the project — with many criticizing the secrecy around the project and arguing it could overburden Tucson’s electrical capacity and result in extra costs for existing customers.
Vivek Bharathan, a Tucsonan part of the group No Desert Data Center, said Beale Infrastructure and its development partner, Humphrey's Peak Properties LLC, were not being clear about the project’s details and asked commissioners to vote against the proposal.
“As far as we know, Beale doesn’t have a customer, but that’s clearly not what they told Pima County,” Bharathan said. “It’s really unclear who we’re talking to or who TEP is negotiating with.”
The ACC vote paves the way for the contract agreement between Beale Infrastructure and TEP to move forward.
