As the number of data centers across the U.S. continues to increase, so does public opposition to them. That has some cities changing their standards for what acceptable data center development looks like. Greg Hahne with member station KJZZ reports.
Protests against data centers like this one in Phoenix are becoming more common across the country. Nile Bunger is here today to tell Arizona's utility regulator it should not approve a 14% hike in electricity rates being requested by the state's largest power company, Arizona Public Service.
"The public are the ones that are going to have to be at the brunt of making sure that these corporations and these shareholders are getting profits," said Bunger.
The power company says it needs to increase prices because their costs have increased, and they're investing to meet the unprecedented demand. The company says it's also asking to raise rates for large users, predominantly data centers, by 45%. In late July, it saw record demand 400 megawatts higher than last year's record. An analysis of early information shows data centers made up half of that growth. William Carter is among the dozens lobbying the utility regulator today.
"I definitely think that data centers and large users should bear their own cost for whatever they want to do," said Carter.
A Pew Research report shows Arizona is one of the country's top data center hubs with over 180 either operating or in development. Now, cities here are reevaluating the standards they have to meet. For years, many city industrial development standards have been based on those established by a trade group called the American Society of Heating, Refrigerating and Air-Conditioning Engineers - or ASHRAE. Marcus Hassen, chair of the ASHRAE data center committee, says their standard for data centers specifically are about 10 years old and needed updating.
"It wasn't obsolete. It was still a go-to standard, and it was applicable," said Hassen.
But with data center development accelerating, ASHRAE published a new standard last year, and now it's creating an addendum to address overall water and energy use.
"You could be consuming little water at the site, but the electricity you consume, that's being produced at a power plant somewhere, right? And the generation of electricity, depending on your geography, that can be very water intensive," Hassen added.
While Phoenix incorporates some of ASHRAE's data center standards and its building codes, it uses recommendations from 2022. Mayor Kate Gallego says the recent boom in data center demand means the city needs to go further.
"We want data centers to care about our local communities and invest in a way that creates benefits locally," said Gallego.
Gallego recently signed on to a pact with about 40 other cities around the world, encouraging more stringent data center standards. Those would make sure the buildings aren't built too close to residents, don't cause pollution and that fossil fuels aren't used to power them.
"We want sustainable clean energy to power it, and we want data centers to consider and protect our water supplies," Gallego said.
And beyond resource concerns, Gallego says lack of transparency has also led to community outrage. "It's now pretty widely acknowledged that the data center community needs to do better about being a good neighbor."
Protesters like Nile Bunger want regulators to take action to protect the public as data center development continues. "Individuals are going to have higher electricity bills," Bunger noted.
Arizona's utility regulator is expected to decide on how much the state's biggest power company can raise rates by the end of the year. Meanwhile, in June, Arizona's lawmakers voted to pause tax incentives for new data centers for the next three years. But the state saw 113 new applications for developments in the weeks before the pause went into effect.
An industry trade group, the Arizona Technology Council, says data centers are a big driver of the state's $35 billion tech industry. The council's president, Steve Zylstra, said in a statement that he doesn't want to see the state abandon data centers, but he acknowledged the moratorium could be a way for Arizona to figure out how to accommodate the tech buildings responsibly.
