Arizona AG: No new data centers

For Tucson residents, Arizona Attorney General Kris Mayes’ call to halt new data center approvals could shape the state’s future water, electricity and land use decisions, even though the most immediate controversies are in the Phoenix area and Pinal County. Mayes is asking Gov. Katie Hobbs and the Legislature to pause approval and construction of new facilities until Arizona adopts a statewide plan for managing water and power. Her proposal comes as the state faces a nearly 30% reduction in its Colorado River allocation and residents continue to confront rising electricity bills.

Mayes is particularly focused on large hyperscale facilities built to support artificial intelligence and other cloud based services. In a written statement, she said data centers consume substantial amounts of both water and electricity, resources Arizona is already struggling to manage. Her office said the request was driven in part by the proposed Colorado River cuts. The attorney general cannot impose a statewide moratorium herself, and her spokesperson said she is asking the governor and lawmakers to act through legislation instead.

The issue has a direct local connection through complaints about a planned data center in Ahwatukee, where neighbors near a proposed 1 million square foot facility say they did not understand its potential effects when the project received approval two years ago. Mayes has received several complaints about the development, although her office is not investigating any data centers. She plans to hold a town hall in Ahwatukee on Oct. 14 to hear from residents. Her office has also said Mayes previously described some data center projects as nuisances to neighborhoods, using the state’s public nuisance law in other disputes involving developments that consume large amounts of groundwater.

Recent events elsewhere in the state have added momentum to the debate. In Pinal County, residents crowded a Board of Supervisors meeting last week to oppose a rezoning request for a large scale data center. The board rejected the request, effectively ending that project. The vote reflects growing resistance in Arizona communities where residents are concerned about industrial facilities, their water demand, energy needs, noise and effect on nearby neighborhoods. Nationally, polling by Gallup and Heatmap has found declining support for data centers locating in people’s communities, and local governments in other states have responded with restrictions or temporary bans.

Mayes’ office cited a 2025 analysis from Ceres, a sustainability nonprofit, which estimated that water demand from data centers in the greater Phoenix area could increase by more than 450% if every planned project is built. Mayes said cooling systems at individual facilities can use tens to hundreds of millions of gallons of water annually. She also pointed to water consumption at the power plants needed to supply the facilities. Even projects that avoid water based cooling can have environmental effects, she said, citing an Arizona State University study that found such facilities may increase nearby temperatures by as much as 4 degrees.

The proposal puts Mayes at odds with Hobbs, although the governor has also called for tighter controls on the industry. Hobbs’ office said the governor wants data centers to benefit Arizonans rather than shift costs onto them. She previously secured a three year pause on the state’s data center tax credit, and her office said she wants to permanently eliminate that credit, require data centers to pay a fair share for the water they consume and prevent their energy use from increasing utility bills. The office said it is exploring additional steps to reduce costs and protect Arizona’s water supply.

The tax credit dispute offers a preview of how difficult a broader construction moratorium could be. Arizona created the incentives in 2013 for developers making a specified level of capital investment. They exempt qualifying purchases of equipment from sales taxes, with benefits lasting from 10 to 20 years depending on the project. Lawmakers recently approved a three year pause, but it was narrower than Hobbs’ original proposal to eliminate the incentives and add a water use fee. Republicans who favor economic growth rejected that broader plan. Hobbs said in January that lawmakers had not discussed a moratorium on data centers themselves, and Mayes’ new proposal could face similar resistance.

Business and industry representatives argue that stopping construction entirely would go too far. Courtney Coolidge, executive vice president of the Arizona Chamber of Commerce and Industry, acknowledged that some projects raise legitimate questions about water, electricity and location. She said the state is already working on those concerns and that a blanket pause would be counterproductive. In a pointed response, the chamber challenged supporters of a moratorium to stop using services such as artificial intelligence, streaming, online banking, cloud storage, GPS navigation, video conferencing and telehealth, all of which depend on data centers. The Arizona Data Center Alliance also opposes a pause. Andrea Clinton, who represents the group, said the industry needs shared standards and a common approach, but argued that the current level of activity makes stopping development impractical.

The fight is also becoming part of Arizona’s 2026 political campaign. Mayes is seeking reelection, while Senate President Warren Petersen, a Republican, is running against her. Petersen accused Mayes of changing positions for political reasons and cited her past votes on utility rate increases while serving on the Corporation Commission, as well as her involvement with Proposition 127, an energy measure he said would have raised electric bills. A Senate Republican caucus spokesperson called the moratorium request an election year distraction, criticized Mayes over her handling of a separate Sunshine Residential Homes investigation and said she should present a concrete plan through the Legislature. Mayes’ office maintains that Arizona is especially vulnerable to the costs of unchecked data center growth. For Tucson and other communities planning for a hotter, drier future, the central question is whether the state will establish limits before additional projects are approved, or continue development while regulators and lawmakers work out the rules.