PHOENIX — The Arizona Corporation Commission has opened a docket to study the impact high-energy use data centers have on utility rates.
Data centers are facilities that house computer servers for technology companies like Waymo, Apple and Microsoft to store data. ACC Chairman Kevin Thompson opened the docket to ensure the costs needed to power data centers are not shifted onto residential consumers.
More data centers look to call Arizona home because of our relatively cheap power, our reliable energy grid and lack of natural disasters. Data centers can use anywhere from 100 megawatts up to one gigawatt a day.
Thompson said 100 megawatts is enough to power several thousand homes in a day. He added that Arizona data centers rank 4th in the nation for the amount of electricity they consume when compared with data centers in other cities.
He said Arizona data center energy use is up 600 megawatts, or a 67% increase, over last year. Not to mention the 170-175 megawatts of product under construction as of the end of 2024.
“It’s about how do we protect the rate payer. What can we do to ensure that we have power available into the future, not only to meet today’s growth, but tomorrow’s growth as well,” Thompson said.
The ACC will hold a series of meetings with stakeholders before they decide to take action. One solution Thompson suggested is that data centers could produce some of their own energy by utilizing solar or building their own nuclear plant. However, if data centers started to produce their own energy they would have to be regulated like utilities if they put energy back onto the grid.
“You need to offload that power because you don’t want to just shut down your plant,” Thompson said. “The best thing to do would be to put it back into the grid to help the grid overall.”
It took Arizona Public Service about a century to build a grid that meets the 8,400 megawatts demand it has now. Thompson said they are going to have to double or triple their current grid capacity in a very short time to meet anticipated demand.
He said the ACC is focused on finding a solution to support growth, keep the grid resilient and utility costs down.
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