Arizona cities are taking different approaches to regulate large water users like data centers

A number of Arizona cities have adopted rules restricting water deliveries to users who use a lot of water. Many of these cities have done this recently — including Tucson this summer — but Chandler approved its ordinance a decade ago.

The notion of large water users is often thought to be targeted at data centers, which are top of mind for many Arizonans at the moment. But they can also include places like golf courses and some manufacturing facilities.

A new study looks at the kinds of rules cities have imposed, and it found that cities have, by and large, taken different approaches.

Sarah Porter is director of the Kyl Center for Water Policy at Arizona State University’s Morrison Institute for Public Policy. She joined The Show to talk more about what the research shows.

Arizona State University

Full conversation

MARK BRODIE: Sarah, what stands out to you about the findings here?

SARAH PORTER: I could say three things really stood out to me. The first thing is that so many very large water providers have the ordinances in place to get a handle on new demand from high volume water users that a huge number of people live in a place where their provider is on it.

Another thing that struck us was that many of these ordinances have come into place pretty recently. The first one was adopted by Chandler in 2015, and then there was, you know, sort of a slow move toward this. And then in the last two or three years, there have been quite a number of water providers that have decided that they want to have these measures in place.

And then finally, it's that different water providers have adopted different approaches to large volume water users, largely, I would say, based on that provider's water portfolio, and that provider's intentions or, or kind of vision of the future of that community.

BRODIE: One of the things that I thought was so interesting was that you found that there's no like uniform definition of what is a big water user, like how big is considered big. And I wonder what are the implications of that for some of these cities that are looking at potential projects or looking at potential ordinances to regulate some of these projects.

PORTER: Yeah, you know, we talk about it in the report that some cities have gone with the size of the meter or number of bigger meters, 3.5 inch meter, way of deciding, is this a large volume water user or not? Some other cities are looking at the average gallons per day. In most cases, those differences reflect the provider's portfolio and its capacity to meet peak demand, maybe peak demand of that large volume user. It really has a lot to do with the idiosyncrasies of any individual city.

One concern that we raise in the report is that as more and more water providers, whether it's a city or a private water provider, put into place these kinds of measures, there's a possibility that they are pushing high volume water users out to areas where they can get what is called an industrial use permit, where they can get a permit to use unreplenished groundwater for their needs.

And in those instances, to some extent, it may be defeating the purpose of the high volume water use in some cases. So it's a tricky problem for a city or a private water company to handle. They don't necessarily want to discourage all high volume use. They don't want to drive the high volume user into the same aquifer, but not within their system, where they can impose efficiency requirements and demand replenishment or other types of concession.

BRODIE: Yeah, I mean, it seems like as you say, it would kind of defeat the purpose if, you know, user X doesn't go to city Y because there are rules in place about what the, what the user can use, but then just goes a little bit beyond where city Y is and just uses all that water anyway. like you're still using and losing that amount of water.

PORTER: Yeah, and I think it really highlights that cities have water portfolios that, and especially these larger providers, they tend to have diverse supplies in their portfolios. So they have a mix of Colorado River water, they have reclaimed water, they have some groundwater. Some of them have water from the Salt Verde system.

So the water supply that water providers are probably most concerned with protecting these days is groundwater because that's the kind of the long term savings account for, you know, backfilling if there's a shortage of the other supplies. So driving a large volume water user out of the water provider's area but still within the same aquifer to use groundwater really does undermine the purpose of the high volume water user.

BRODIE: I wonder then if this maybe calls for a bigger, more cooperative approach, maybe like a county-wide approach or maybe even a statewide approach in terms of having one uniform set of rules, as opposed to each provider, each municipality sort of doing its own thing.

PORTER: I think time will tell on that. Right now, we're in a time where we suddenly have, you know, in a short amount of time, we have a lot of different approaches, and the water providers, mostly cities have decided this approach meets our needs. This approach does what we want to do. And it will be, I think, worthwhile to see how that plays out.

For the most part, we put water supply planning at the local level. And so what we're seeing is that at that local level, cities are showing concern about new high volume uses through these ordinances. So time will tell if we need something more regional to kind of even out potential loopholes and disparities.

BRODIE: OK, would it be your expectation that looking forward that more municipalities, more providers are going to be coming up with rules like this to deal with high volume water users?

PORTER: I expect that many more municipalities will take a look at these high volume water user approaches and figure out, you know, what's best tailored to them. And I think it's a good idea for the water experts in those cities and their economic development people and their city managers and their elected officials to have that conversation to talk before it becomes a big issue about, you know, what do we have the capacity for, what does what does large volume mean to us, and how do we want to deal with the opportunity cost issue?

BRODIE: Well, I want to ask you about that because I'm curious based on what you've seen and what you hear from folks. Do you get the sense that that city officials, city leaders are having the right conversations about seemingly trying to find this balance between economic development, between jobs and business and all that, and also making sure that using the resources that they have and that they're going to have in the near future are appropriate for the kinds of economic development they're doing?

PORTER: My sense is that a lot of people are trying really hard. But this is, it's complicated. Even data centers, you know, data centers are important. We all love our smartphones. I love Zoom calls, you know, I save, I save gas by doing Zoom calls. I mean, there's so many reasons why we rely on cloud storage and servers, and, and even bigger reasons than my personal, you know, preferences for not driving, but things like national security or economic development.

And some, there are places or there's some types of industries that need to have the data centers nearby. They need them for security reasons or to avoid latency and so it's very hard to have that conversation about, is this high volume water user right for us at this time? My sense is they're trying and that these types of trade-offs are difficult. And the more we can support those conversations, the better the decision making will be.