Arizona Attorney General Urges Pause on New Data Centers

Arizona Attorney General Kris Mayes is calling on Governor Katie Hobbs and state lawmakers to enact a statewide pause on the approval of new data centers, specifically targeting large-scale hyperscale AI projects. Mayes argues that these facilities are too power- and water-intensive for the state, citing a nearly 30 percent reduction in Colorado River water allocations by the U.S. Department of the Interior and double-digit residential rate hike proposals from Arizona Public Service and Tucson Electric Power.

Mayes plans to host a town hall in Ahwatukee on October 14 regarding a proposed project by Menlo Digital and is considering the use of nuisance laws to assist residents in fighting unwanted developments. Local opposition is already evident in Pinal County, where the Board of Supervisors recently rejected a rezoning request for a large-scale facility.

Responses to the proposal are divided. Governor Hobbs has already secured a three-year moratorium on data center tax credits, stating she wants the industry to work for Arizonans. However, Senate President Warren Petersen and Senate Republicans dismissed the call as an election-year distraction. The Arizona Data Center Alliance also opposes the pause, asserting that the industry has too much momentum to stop.