Attorney General Kris Mayes wants Arizona to stop approving new data centers, staking out a more aggressive position than fellow Democrat Gov. Katie Hobbs over how the state should respond to growing concerns about water and energy demand.
A spokesperson for the Attorney General’s office said Mayes’ call was prompted by proposed cuts to the state’s Colorado River allotments — despite the power to implement a moratorium lying elsewhere.
“AG Mayes called on the Governor and the Legislature to pass legislation to pause any new data center approvals or construction until we have a statewide plan to manage our water and power future,” spokesperson Richie Taylor wrote in an email to The Arizona Republic.
Taylor wrote that Mayes was not currently investigating
any data centers, but had received several complaints regarding a development in Ahwatukee. Mayes, who is running for reelection, is planning to hold a town hall over the data center in October.
Mayes has previously told The Arizona Republic that some data center projects “are nuisances to neighborhoods." She has used the state’s public nuisance law to target projects from mines to farms that slurp Arizona groundwater, drawing objections from the GOP about her novel use of the law.
The Arizona Chamber of Commerce and Industry issued a tongue-in-cheek response — without directly naming Mayes — challenging anyone advocating for a blanket moratorium to log off from “social media, artificial intelligence, streaming services, online banking and digital payments, cloud storage, GPS navigation, video conferencing, telehealth, and other cloud-based services” that rely on data centers.
Chamber Executive Vice President Courtney Coolidge said it’s “no secret” that data centers are receiving pushback around the nation, and that some projects face legitimate questions about water, power usage and siting. But she said the state is already making efforts to address those concerns, and calls to shut down construction are counterproductive.
“We just disagree that the solution is to build nothing,” Coolidge said.
She urged policymakers to come to the table to find solutions rather than propose blanket moratoriums.
“We should focus on the policy,” Coolidge said. “I know that’s hard to do during campaign season.”
Data centers aren’t new. But in recent years, bigger projects, often called hyperscale data centers, have proliferated due to demand for artificial intelligence. As these larger projects multiplied, many Americans soured on data centers. Polling from Gallup and Heatmap show a waning support among Americans for data centers hoping to set up shop in their neighborhoods.
In response, local governments have pushed for restrictions or moratoriums on data center development.
Voters’ growing objections have propelled data centers into a midterm election issue, dividing candidates of both parties. Mayes’ stance splits from that of Democratic Gov. Katie Hobbs, who has proposed a narrower approach, citing economic benefits of data centers.
Mayes' call might fall on deaf ears at the state Legislature. The recent debate over tax incentives for data centers showed little appetite for a wholesale moratorium at the state level.
While the state approved a three-year moratorium on tax incentives for data centers, it was a watered-down version of Hobbs' initial proposal, which called for the elimination of the tax incentives and a new fee on data centers for their water use.
Pro-growth Republicans rejected the original proposal, but agreed to the pause on tax incentives. Hobbs said in January that a moratorium on data centers themselves wasn't discussed.
The tax incentives were introduced in 2013, and exempted data center developers that made a certain amount of capital investment in the state from paying sales tax when buying equipment. The tax exemptions can last between 10 and 20 years, depending on the project.
Alaina Mencinger covers tech, energy and utilities for The Arizona Republic. Reach her at Alaina.Mencinger@usatodayco.com.
Reach reporter Stacey Barchenger at stacey.barchenger@arizonarepublic.com or 480-416-5669.
This article originally appeared on Arizona Republic: Attorney General Kris Mayes calls for halt to new Arizona data centers
