Public Reference Briefing
Public Reference Briefing
AZDCA Community Engagement Task Force
Technologies, resource demands, regulatory guardrails, and public rights. Written for residents and local policymakers who need to evaluate a specific project in a specific place.
Most questions about data centers do not have one Arizona-wide answer. Water use depends on the cooling design. Noise limits depend on the city. Whether a project can be stopped depends on how the land was already zoned. So this briefing is organized around three things in every section:
Several of these questions have a longer answer already published in the Alliance's Insights library, and each section links to the relevant pieces. Every section lists its sources. Where the Alliance does not have a defensible answer, it says so rather than filling the gap.
Prepared by the AZDCA Community Engagement Task Force. Last reviewed September 2026.
Topic 1
What information should be available before decisions are made?
Most of what a community wants to know is knowable before a project is approved. The questions below are the ones that tend to go unanswered, and the sections further down this page explain the mechanics behind each of them.
These come up in nearly every Arizona hearing. Each one is legitimate, each one has an answer that depends on the specific project, and each has a section below.
The cost-shift question. Turns on the rate structure and the contract, not on goodwill. See section 5.
Depends almost entirely on the cooling design and the water source. See sections 4 and 6.
A continuous mechanical sound, governed by local ordinance rather than state law. See section 7.
Permitted and hour-limited by the county air authority. See section 8.
Sometimes. It depends entirely on how the land is already zoned. See section 9.
The state tax exemption is currently paused. Local property tax is a separate question. See section 10.
One thing worth saying plainly. Trust in these projects has been damaged in parts of Arizona by commitments that were made informally and then not kept. A community that wants a commitment honored should ask for it in the zoning condition or the development agreement, where it is enforceable, rather than in a public meeting, where it is not.
Go deeper, from AZDCA Insights
What a Data Center Means for My Town · What El Paso Shows About Data Centers and Community Trust
Topic 2
How and when should communities be involved?
Timing is the whole argument. By the time a project is visible to most residents, the land is often already under contract and the zoning question is already framed. The zoning section on this page sets out where the formal openings are, and they are narrower than people expect.
Topic 3
What should communities understand about impacts, promises, and accountability?
These are capital-heavy, labor-light buildings. That combination is the reason they are attractive to a tax base and the reason they disappoint on job counts. Both halves are real and a community should weigh them together.
What varies
Property tax treatment, permanent job counts, local hiring commitments and any community benefit terms are all project-specific and negotiable. None of them are automatic. A number quoted in a press release is a projection, not a commitment, unless it appears in a development agreement.
What to ask
Go deeper, from AZDCA Insights
The Tax Base Nobody Talks About · How Many Jobs Does a Data Center Actually Create? · The Per-Acre Ledger · Do Data Centers Hurt Property Values?
Topic 4
What happens after the permit is approved?
Most of the friction in Arizona has come after approval rather than before it, and it tends to come from the same few things: nobody local to call, commitments that were made verbally, and construction impacts nobody was warned about.
Topic 5
Where the water goes, and what the cooling choice decides
What is generally true
Water use is a function of the cooling design, and the range across designs is enormous. Evaporative cooling towers consume significant water and save power. Closed-loop and dry-cooled systems consume little or no water on site and use more power to do it. A facility can also be air-cooled for most of the year and switch to evaporative cooling only on the hottest days. There is no single gallons-per-megawatt figure that describes a data center.
Water source matters as much as volume. Reclaimed or non-potable industrial water draws on a different supply than drinking water, and some Arizona projects have committed to it. That is a project commitment or a provider requirement, not a statewide rule.
What varies, and this is the part most often stated wrongly
Arizona's 100-year Assured Water Supply requirement comes from the 1980 Groundwater Management Act and applies to new subdivisions inside an Active Management Area. It is not a blanket mandate covering every industrial development in the state.
Outside an AMA, the applicable program is Adequate Water Supply, which is a weaker standard and does not by itself block a development from proceeding.
For a project served by a city or town water provider, the meaningful question is usually the provider's own designation and its long-range supply plan, and whether serving this new load changes what that provider can commit to for everyone else.
What to ask
Sources: Arizona Department of Water Resources, Assured and Adequate Water Supply overview. AMWUA, Assured Water Supply Program. LBNL 2024 report, cooling and water modeling.
Go deeper, from AZDCA Insights
What Data Centers Actually Do With Water · Who Actually Drains the Colorado River
What is generally true
Everything the servers draw in electricity comes back out as heat, and it has to go somewhere. That is the whole of the cooling problem, and it is why cooling and water are the same conversation.
Open loop, or evaporative. Water is evaporated to shed heat. Efficient on power, consumptive of water, and water that evaporates does not come back.
Closed loop. The same water circulates and is not consumed in normal operation. Uses more electricity to reject the same heat.
Higher-density AI hardware is pushing toward direct liquid-to-chip and immersion cooling, which move heat more efficiently than blowing air across a room. These change the water and power picture, and they are new enough that a community should ask what specifically is being installed rather than assume.
What varies
There is a real tradeoff between water and power here, and where a project lands on it is a design decision. In a hot, dry climate the evaporative option is more attractive on efficiency and more costly on water. A community that cares more about one than the other should say so while the design is still open.
What to ask
Source: LBNL, 2024 United States Data Center Energy Usage Report.
Go deeper, from AZDCA Insights
Topic 6
How large energy users affect the grid, infrastructure, and customers
What is generally true
Service comes from the utility with territory over the site, usually APS, SRP or Tucson Electric Power. These are flat-load customers, drawing close to the same amount around the clock, which is a different shape from a residential neighborhood and is the reason they get their own rate treatment.
The demand is not hypothetical. SRP reported serving 59 large load customers totaling roughly 7,000 megawatts. APS estimated its large customer peak would reach about 13.1 gigawatts in 2026. TEP and UNS Electric reported 8 to 10 gigawatts of speculative projects in their queue against no data center customers currently in service.
What changed in 2026
House Bill 2756 was signed on June 4, 2026. It creates a state framework for extra high load factor customers and authorizes the Arizona Corporation Commission to set service characteristics including minimum bills, minimum contract terms, early-termination provisions, collateral or guarantees, and customer payment for infrastructure. It also requires utilities to report semiannually on new large-load interconnection requests and, on request, to file cost-of-service studies showing how costs are allocated to those customers.
Separately, the Commission opened Docket E-00000A-25-0069 on large load and data center regulation and held its first workshop in April 2026. That docket is open and takes public comment.
What varies
Whether a specific project pays for its own substation, transmission and generation depends on the tariff it takes service under and on the terms of its individual agreement with the utility. Extra high load factor rates, minimum bills, collateral requirements and up-front contributions are the tools, and they are applied case by case. "Developers pay for their own infrastructure" is the intent of the framework, not an automatic outcome for every project.
What to ask
Sources: Arizona HB 2756, Chapter 111, 2026. Arizona Corporation Commission workshop summary and Docket E-00000A-25-0069. APS Rate Schedule XHLF. SRP large general service price plans.
Topic 7
Where projects belong and how local decisions are made
This is the section that decides whether a community has leverage, and it is the one most worth reading closely. The answer turns on a single question: does this project need something from the city, or does it already have what it needs?
Why this causes so much anger
Residents frequently learn about a project at the point where the decision has already been made, because the land was zoned industrial years earlier by a council that was not thinking about this use. The frustration is real and it is usually not the current council's doing. The practical response is to look at industrial-zoned parcels in your jurisdiction now, before an application arrives, and to decide whether the existing code says what you would want it to say.
What to ask
Source: A.R.S. § 9-462.01, zoning regulations, public hearing, definitions. Local zoning ordinances govern the specifics and vary by jurisdiction.
Go deeper, from AZDCA Insights
If Not Here, Then Where · I Live Five Blocks From an Intel Fab
Topic 8
What nearby communities actually experience
What is generally true
The sound comes from mechanical equipment, chiefly cooling fans and rooftop units, plus periodic generator testing. It is continuous rather than intermittent, which is why it registers differently from traffic or construction noise even at a lower measured level.
The engineering answers are well understood: sound-attenuating walls, acoustic baffles, low-RPM variable speed fans, and orienting mechanical yards inward and away from homes. These work, and they are cheaper to require before a building is designed than to retrofit after.
What varies
Arizona has no statewide data center noise standard and no statewide setback requirement. Both are set locally, in the city or county code and in the conditions attached to a specific approval, and they differ substantially between jurisdictions. Any claim that a particular decibel limit or a particular setback distance applies everywhere in Arizona is wrong.
Two details make a real difference and are worth arguing about specifically. Whether the standard is measured at the property line or at the nearest residence. And whether it accounts for low-frequency sound, which travels further and is what people usually complain about, or only for an average decibel reading.
What to ask
What is generally true
Backup generators exist so the facility survives a grid outage. They are permitted air sources and they are regulated. In Maricopa County the relevant instrument is the Air Quality Department's general permit for stationary emergency internal combustion engines, which limits each emergency engine to 500 hours of operation in any 12 consecutive months. Pima County permits through its Department of Environmental Quality, and other areas through ADEQ.
Diesel units typically run on ultra-low sulfur or renewable diesel and use aftertreatment such as selective catalytic reduction. Some newer projects are moving toward battery storage for part of this role.
What varies
The number of generators, their total rated capacity, the permit class the facility falls into, and the testing schedule. A site with dozens of large units is a different air permit conversation from a site with a handful, and the permit application is a public document.
What to ask
Sources: Maricopa County Air Quality Department, Emergency Engine Use. Maricopa County general permit for stationary emergency internal combustion engines. ADEQ air quality permitting.
Topic 9
What does the community actually gain?
Construction and operations are two different workforces on two different timescales, and the public conversation usually collapses them into one number. The economic section above covers what these projects bring and where communities have found the result disappointing.
Topic 10
What do cities and towns need to evaluate these projects well?
Small jurisdictions are being asked to evaluate proposals involving water, power and infrastructure at a scale they have never had to assess, often on a short clock and without in-house expertise. The tax section below is part of that picture, because the revenue question is usually the first one a council is asked.
Current status, and this changed recently
Arizona's Computer Data Center Program, established under A.R.S. § 41-1519, exempts qualifying equipment purchases from Transaction Privilege Tax and Use Tax at the state, county and local level. Certification requires a minimum capital investment of $50 million in counties with more than 800,000 people, which includes Maricopa and Pima, and $25 million elsewhere. The exemption runs up to ten years, or up to twenty for a project certified as a Sustainable Redevelopment Project.
The 2026 state budget placed a three-year moratorium on new certifications. The Arizona Commerce Authority cannot accept new applications from July 1, 2026 through June 30, 2029. Facilities certified before that date keep the exemption they were granted. Any discussion of this incentive as currently available is out of date.
What this does and does not cover
The state program is about sales tax on equipment. It is separate from local property tax, from any abatement negotiated with a city or county, and from any development agreement. A project can be outside the state program entirely and still carry local tax treatment worth arguing about.
What to ask
Sources: A.R.S. § 41-1519. Arizona Commerce Authority, Computer Data Center Program. Arizona Capitol Times, three-year incentive pause, July 2026.
Go deeper, from AZDCA Insights
Topic 11
How a site may change over time
Most approvals are granted on a description of phase one. What happens in later phases, or if the project changes hands, is decided by what was written down at the start.
Topic 12
Background on what these buildings are and what they run
A data center is a building full of computers that runs continuously under tight temperature and humidity control. What matters for a community is not the building, it is the workload inside it, because the workload sets the power draw, the heat, and therefore the cooling and water demand.
| Workload | What it does | Power and resource profile |
|---|---|---|
| Traditional cloud and enterprise | Web hosting, file storage, corporate email, payments, streaming. | Moderate and fairly predictable. Usage tracks the business day. |
| AI training and high-performance computing | Training and running large machine learning models on specialized GPU clusters. | Continuous, at much higher power density per square foot. This is the category driving the growth. |
| Edge and emerging | Latency-sensitive work placed close to where it is used. | Smaller sites, variable load, more of them, closer in. |
Scale, for context
US data centers used about 176 terawatt-hours of electricity in 2023, roughly 4.4 percent of national electricity consumption, and the growth rate has been accelerating since 2017. In Arizona, the Corporation Commission counted about two dozen operating data centers with more than 2,000 megawatts of capacity in April 2026, and more than 10,600 megawatts of additional capacity planned.
What to ask
Sources: Lawrence Berkeley National Laboratory, 2024 United States Data Center Energy Usage Report. Arizona Corporation Commission, Data Center and Large Load Workshop, April 2026.
Go deeper, from AZDCA Insights
What 100 Megawatts Actually Does · The Building With No Windows · Origins, Infrastructure, and Why Everything Is Where It Is
If you only take four questions into a hearing, take these.
1. Is this by right, or does it need a vote?
Everything else follows from the answer. If it is discretionary, conditions are available. If it is by right, the conversation is about code enforcement and about changing the code before the next one.
2. What cooling design, and what water source?
This one answer determines most of the water impact, and it is a design decision that can still be influenced while the project is in review.
3. Who pays for the power infrastructure, in writing?
Rate schedule, contract term, collateral, and up-front contribution. The framework exists to prevent cost shifts. Whether it was applied here is a project-specific fact.
4. Which commitments are enforceable?
A commitment in a zoning condition or a development agreement can be enforced. The same words in a public meeting cannot.
Produced by the Arizona Data Center Alliance Community Engagement Task Force. It is written to be useful to people on every side of these decisions, and it deliberately avoids taking a position on whether a given project should be approved.
If something here is wrong, out of date, or missing a source, tell us and we will fix it. That is the standard this document is trying to hold itself to.
Corrections and questions: [email protected]
Last reviewed September 2026. Statutes, tariffs and local ordinances change. Verify anything you intend to rely on against the linked source.