Phoenix and Arizona State Limit Data Center Expansion

Public opposition to the rapid expansion of data centers has prompted Kate Gallego, the Mayor of Phoenix, to join a global pact of approximately 40 cities. This agreement enforces more stringent requirements for data center development, specifically targeting pollution levels, proximity to residential neighborhoods, and the mandatory use of sustainable energy and water resources.

At the state level, the Government of Arizona voted in June to pause tax incentives for new data center projects for three years. These regulatory shifts follow a surge in energy demand that led Arizona Public Service, the state's largest power company, to request a 14% electricity rate hike for the general public and a 45% increase for large-scale users.

While the Arizona Technology Council notes that data centers drive the state's $35 billion tech industry, its leadership acknowledges the need for responsible accommodation. The new standards align with updated industrial guidelines published by ASHRAE to ensure the industry better manages its local footprint.