WASHINGTON – This week, major technology companies announced a commitment to protect consumers from rising energy costs due to the rapid growth of data centers. Prompted by former President Donald Trump, Google, Meta, Microsoft, OpenAI, xAI, Oracle, and Amazon Web Services are among the signatories of the “ratepayer protection pledge.” Despite this move, the largest data centers in Arizona are being developed by companies that have not joined the initiative, raising skepticism among consumer advocates and others about its potential impact.
Governor Katie Hobbs’ office expressed cautious interest in the proposal. “Arizona’s booming data center industry must work for the people of our state, not the other way around,” said Hobbs’ spokeswoman, Liliana Soto, via email. “President Trump’s proposal is interesting in concept, but currently there are too many unknowns to make any type of assessment.”
Trump introduced the pledge during his State of the Union address on February 24. Speaking at a White House meeting, he assured that “the tech companies and the data centers will be able to get the electricity they need, all without driving up the cost for consumers.” The companies have committed to five key actions: expanding power supply, upgrading power delivery infrastructure, paying for power access whether used or not, investing in local job creation, and enhancing electric grid and community resilience.
However, Tom Prezelski, a senior political advisor at Rural Arizona Action, expressed doubts about the enforceability of these commitments. He emphasized the role of the Arizona Corporation Commission and local agencies in regulating utility prices. “Utilities are allowed a modest profit, so if they have to eat a little bit of their profits in order to expand capacity, they should do that,” he added, criticizing the current commission’s approach.
Developers of Arizona’s largest data centers, Vermaland LLC, Tract, and EdgeCore Digital Infrastructure, have not commented on the pledge or on plans to protect consumers from potential cost increases. Kevin Thompson, chair of the Arizona Corporate Commission, supports the idea that development costs should not burden residential and small business consumers. “All growth, regardless of what it is … they have to pay their own way,” Thompson stated, but acknowledged limits in mitigating impacts.
The upcoming data center in Arizona, a 3-gigawatt project south of Eloy by Vermaland, faces no requirements to finance necessary electric capacity expansions, according to critics. Prezelski warned that infrastructure costs could be transferred to consumers, urging for stronger assurances against such shifts. “All the new lines, the new generator contracts with other utilities, that’s all very expensive,” he said, highlighting the risk of costs being unfairly distributed.
Arizona Public Service (APS), the state’s largest energy provider, is currently pursuing an average rate increase of 14%, with residential users facing a 16% rise and data centers seeing a 30% to 45% hike. Thompson noted that these increases aim to recover past investments by APS.
With projections from the Electric Power Research Institute indicating that data centers could consume over 20% of Arizona’s power by 2030, concerns about the financial burden on taxpayers persist. Soto emphasized the need for the profitable tech industry to bear its own expansion costs, stating, “As a global tech leader in AI, taxpayers shouldn’t keep subsidizing this highly profitable industry.”
