Mayes calls for a ban on data center development, cites water and energy concerns

Arizona Attorney General Kris Mayes is calling on state lawmakers to put a pause on data center development until it is clear they won’t impact residential energy rates or water supplies.

Given their immense energy needs, Mayes says data centers could lead to more water shortages, climbing power bills, higher temperatures and emissions.

“I think most Arizonans agree that right now, Arizona is not the best place to build data centers,” Mayes told KJZZ.

She pointed to the fact that both APS and Tucson Electric Power are seeking to raise residential rates by more than 10%, a historically huge spike, with data centers mostly to blame.

“The utilities have already said that they have interconnection queues that are clogged with data centers, and that means they are going to be building infrastructure — costly infrastructure like power plants and transmission lines — to get energy to these data centers, and they’re going to try to put that in rates,” Mayes said.

“I just think that’s unfair, and we can’t afford it right now,” she added.

While the two utilities are considering special tariffs for data centers, Mayes says they do not go far enough in protecting other consumers. She says that’s why her staff intervened in the APS rate case, which is pending a judge’s review and Arizona Corporation Commission’s approval.

“We don’t think the out-of-state billionaires who are building these data centers are being asked to cover their full costs. We would tell folks if we believe that, but we don’t see it yet,” said Mayes.

Mayes says there shouldn’t be any more data center development until the impact on water supplies is clearer, as well.

Arizona is preparing to lose a third of its Colorado River supply, amid the latest round of federal cuts. Data centers drive water demands in two ways — first, water is needed for on-site staff facilities, landscaping and industrial cooling systems. And substantially more water is needed for powering the buildings.

“Those power plants use water, especially natural gas power plants and coal, or pretty much any form of baseload energy,” said Mayes.

Renewable energy resources like solar and wind, use little to no water, but they’re more difficult to store when natural supplies are low, making them less reliable. And data centers overwhelmingly prefer reliability.

An analysis by Ceres, a nonprofit focused on corporate sustainability, estimates that water demands could surge by more than 450% if all the planned data center projects in Phoenix are built.

In the meantime, Mayes says she will consider using nuisance laws to help communities fight unwanted data centers, potentially starting with Ahwatukee. Mayes plans to meet with residents there in the fall to discuss their options.