Pinal County rejects massive La Osa data center. Residents want more rules for future projects

Pinal County supervisors on Wednesday rejected plans to build La Osa Energy Center, a massive development planned outside Eloy. It was among the largest proposed data centers in Arizona.

The developer, Vermaland, had plans to build 11 data center buildings, a 500-megawatt natural gas plant and battery energy storage systems that could serve 1 gigawatt of total energy demands — that’s equivalent to the energy demands of a large city.

The rejection comes even after the developers proposed an 80% reduction in the original scale of the project, self-imposed limits on water use and a commitment to shoulder all of the energy costs.

But Pinal County residents weren’t buying it.

Robin Davis lives in Hidden Valley. She said she thinks the proposed reduction was “probably planned all along. Ask for more than you want and settle for what you really wanted,” she said.

Between the last public hearing in May and Wednesday’s vote, Vermaland added 22 new development conditions. These included a 600 acre-foot cap on fresh water use within the data center buildings — close to 200 million gallons worth of water — and at the on-site natural gas plant.

Vermaland said it would consider offsetting some of this consumption by purchasing effluent water, but didn’t mention firm requirements.

That water supply would have come from the Central Arizona Irrigation and Drainage District. Developers said that CAIDD’s general manager found the Eloy sub-basin of the Pinal Active Management Area adequate for meeting the demands of the site.

But Mary Eileen Flanagan, an area resident says, the aquifer has already had issues with overdrawing and land subsidence.

“Many of my neighbors’ wells have gone dry and require additional depth. It currently costs about $70,000 to drill a well to 900 feet. The problem is, for many, water is at 1,200 feet,” she said.

Supervisors also struggled to understand how the developer planned to meet the proposed energy demands.

Robert Clang, a Vermaland associate, said developers had secured 500 megawatts of natural gas from a broker, and all the necessary turbines for the proposed plant. But 500 megawatts is only half of 1 gigawatt. Clang said they would attempt to secure the rest from nearby solar facilities or even the Palo Verde nuclear generating station, which is over 100 miles from the site.

Supervisor Jeffrey McClure said that would likely be hard, as much of that solar power is already committed. “My understanding is that’s dedicated to some other companies,” he said.

La Osa Energy Center has been under county review since last September. The Planning and Zoning Commission previously approved a comprehensive plan which detailed visions for 59 data center buildings drawing on 3 gigawatts of energy demand.

But Karen Mooney, a planning and zoning commissioner, says the county received incomplete information, as well as inaccurate job and economic impact data in the earlier applications.

“Nothing was mentioned about the data center, and data centers hadn’t come here yet. So I think if they had given any bit of indication that that’s what they were looking at, we might have even started drafting a code and maybe had it ready,” said Mooney.

Residents like Mark Seidel from Florence are now calling on county leaders to create stronger guardrails for future development.

“I don’t want an incomplete and hastily built and ever-changing proposal. I don’t want stipulations that are unenforceable or not enforced. I don’t want promises from a lawyer or seller that have no meaning after the sale. I don’t want a county code structure ignorant of data center specifics,” said Seidel.

The supervisors voted 4-1 to reject La Osa’s rezoning request and plans for development.

Supervisor Stephen Miller, who has been vocal across the project’s two hearings in his stance that a ‘no’ vote would go against the U.S. Constitution and free market principles, questioned the public’s opposition.

“Individuals have a right to use their property the way they want,” he said. “I really truly believe that all the negativity on these data centers has been from our adversaries around the world. We need them. It’s national defense”

There are currently no definitions or specific development requirements for data centers under Pinal County’s zoning code. The 33 project stipulations that were initially passed by the Planning and Zoning commission covered pretty standard landscaping and setback requirements.

All of the water use restrictions, noise study requirements and limitations, and energy cost protections were self-imposed by the developer.