Graded Moderate and tightening. 20 laws, orders, rulings and local actions, each with its source, reviewed 4 November 2026.
APS, the largest utility, has taken no new data center customers since 1 Jan 2024 (stated Sept 2026); SRP makes 20 MW loads prepay studied upgrades.
TEP's Project Blue contract (3 Dec 2025) carries minimum bills and exit fees, SRP bills 80% of forecast load, and the Aug 2026 coop checklist bars subsidy.
Pima County's 120-day pause to 20 Jan 2027 and Tucson's Aug 2026 ordinance cover the Tucson market; Phoenix's 2025 rules add buffers; Marana tightened.
HB 4168 bars new Computer Data Center exemption applications from 1 July 2026 to 30 June 2029; certified sites keep theirs.
HB 2756 (June 2026) puts semiannual reporting and cost studies on utilities, not developers; Tucson bars drinking water for cooling without an agreement.
Scored on rules in force, 1 to 5. 5 is the most regulated. Pending rules set the arrow.
Arizona stopped taking new applications for its Computer Data Center sales tax exemption from 1 July 2026 to 30 June 2029, and Governor Hobbs wants it ended for good, though she said in September 2026 that she opposes the statewide moratorium Attorney General Mayes has called for. The Corporation Commission applies a 'growth pays for growth' approach: it approved the Tucson Electric Power contract for Project Blue with minimum bills and exit fees, set a standard review for cooperative large-load contracts, and is deciding an APS rate case that resets the extra high load factor rate. APS says grid limits have kept it from committing to any new data center customers since January 2024. Hobbs has twice vetoed bills that would have let data centers add small nuclear reactors outside county zoning. Local governments are adding rules: Tucson requires council approval above 20 MW, Pima County paused new projects for 120 days from 22 September 2026 while it writes a conditional use permit ordinance, Marana tightened its code, Phoenix faces property-rights claims over its 2025 rules, and Pinal County turned down a large rezoning.
Governor Katie Hobbs won a second term on 3 November 2026 (AP call) and keeps saying a statewide moratorium is not the answer while backing the three-year tax exemption pause and vetoing reactor co-location bills; Attorney General Kris Mayes, who wants a statewide pause, was also re-elected. Democrats led for majorities in both legislative chambers for the first time in decades as of 4 November, with several seats uncalled, which would let a 2027 session take up Mayes's pause, a permanent end to the tax exemption and the large-load cost bills Republicans had blocked, subject to the governor's position. Two Corporation Commission seats are not yet called; Democrats Clara Pratte and Jonathon Hill led, and if both win the commission goes from 5-0 to 3-2 Republican when the new members are sworn in in January 2027, after the sitting commission votes on the APS rate case and its extra high load factor rate by 31 December 2026 (recommended order expected late November, new rates early 2027). Mayes's motions to disqualify Chairman Myers from the APS and TEP cases and the Residential Utility Consumer Office suit against formula rates are still pending. Locally, Pima County's moratorium runs to 20 January 2027 with a supervisors' vote on the conditional use permit ordinance expected in December, Phoenix defends its 2025 ordinance at a 17 November hearing, Page's commission hears draft data center districts on 17 November and Gilbert's council takes up its ordinance on 15 December. The tax exemption window reopens 1 July 2029 unless lawmakers act.
Results as called on 4 November 2026. Positions are the winners' own statements; a platform is not a rule and does not change the grade.
No statewide moratorium, but 1 local pause is in force as of 4 November 2026, in Pima County. Proposals and expired pauses are not counted.
Tightening. Arizona is graded Moderate, which means incentives alongside new costs, limits or local pushback. Three-year pause on the data center tax exemption began July 2026. The outlook above says what is pending.
Arizona sits in The West outside California. The grid operator decides how a new large load is studied, what it must bring or pay, and whether it can be curtailed first; the state decides siting, permits, tariffs and incentives.
Yes. Arizona has paused, narrowed or ended a data center incentive in 2025 or 2026: HB 4168: three-year pause on the Computer Data Center tax exemption.
On Genloop's five-line rubric (1 least regulated, 5 most) Arizona scores grid connection 4, power rates 3, siting and land use 3, tax treatment 4, permits and water 2, a mean of 3.2. The most regulated line is tax treatment: HB 4168 bars new Computer Data Center exemption applications from 1 July 2026 to 30 June 2029; certified sites keep theirs.
Katie Hobbs (D) won the governor's race. Hobbs said on 4 September 2026 that 'I don't think a statewide moratorium is the answer', that 'there are places where data centers make sense' and that 'we need to make sure that they are doing that sustainably'; she signed the three-year pause on the data center tax exemption and vetoed SB 1418 on co-located small reactors. Legislature: Republican both chambers before the election; Democrats lead for majorities in both chambers, not yet called, control changed. The arrow is tightening: Hobbs and Mayes re-elected, Democrats lead for both chambers and two commission seats; APS large-load rate and Pima ordinance decided by year end.
20 items: each is a law, order, tariff, ruling, utility action or local decision that changes what a data center must do, pay or disclose, or where it may be built. Failed and pending measures are marked. Each links to its source.
On 20 October 2026 the Marana Town Council voted 5-1 to amend its 2024 data center zoning code. The changes add C-weighted noise limits for low-frequency equipment hum, larger penalties for exceeding noise limits, decommissioning procedures for servers, cooling equipment, generators and batteries, and upfront financial assurance for decommissioning costs.
Source: kjzz.orgAttorney General Kris Mayes filed motions, docketed 19 October 2026 and reported 21 October 2026, in the APS and TEP rate cases asking Chairman Nick Myers to disqualify himself for bias and for prejudging the formula rate policy he voted to adopt, or at least to stay out of the formula rate deliberations. Myers says he has found no basis to recuse himself. If he stays, the Attorney General will ask the administrative law judge to admit the bias evidence to the record for any appeal. The APS case carries the proposed extra high load factor rate and must be decided by 31 December 2026, and a separate Residential Utility Consumer Office suit against the formula rate policy is ongoing.
Source: kjzz.orgOn 28 October 2026 the Pima County Planning and Zoning Commission voted 8-1 to send a data center ordinance to the Board of Supervisors, with a vote expected in December 2026 before the moratorium ends on 20 January 2027. Data centers would need a Type III conditional use permit in the CI-2 heavy industrial zone with two public hearings and supervisor approval, open-loop cooling would be barred, and developers would need written guarantees of water and power before approval. Staff added PFAS limits, larger setbacks, lower sound limits and tighter generator and decommissioning rules.
Source: kjzz.orgA Maricopa County Superior Court judge dismissed West Buckeye Road LP's claim that Phoenix's 2025 data center ordinance itself allows a developer to sue for compensation, but will hear its Proposition 207 claim for more than $54 million in lost property value. An evidentiary hearing is set for 17 November 2026 at which Phoenix must show the ordinance is a necessary public health protection, which would end the suit.
Source: kjzz.orgOn 20 October 2026 the Gilbert Town Council voted 6-1 to postpone its proposed data center ordinance until 15 December 2026. The draft would confine data centers to light and general industrial zones, require a special permit instead of a conditional use permit, and bar potable water and open-loop systems for server cooling.
Source: kjzz.orgPage held a public hearing on 28 October 2026 on draft rules that would create data center districts near high-voltage lines and industrial zones, require notice to residents within half a mile and two neighborhood meetings, require water and energy supply certificates showing no effect on other users, set a 55 dBA sound limit and require 24 hours' notice before generator tests. The Planning and Zoning Commission hears it on 17 November 2026.
Source: kjzz.orgAPS said in early September 2026 that grid constraints have kept it from committing to serve any additional data center customers since 1 January 2024, and that it cannot do so under its current pricing. It has about 4,000 MW already committed to data centers, set a peak demand record above 9,100 MW in August 2026 and plans a 1,280 MW gas plant near Gila Bend. Microsoft has intervened in the APS rate case to oppose the proposed 45% increase for data centers.
Source: kjzz.orgOn 22 September 2026 the Pima County Board of Supervisors voted 3-2 for a 120-day moratorium on data center projects in unincorporated areas, with Supervisors Rex Scott and Steve Christy opposed. It applies to projects that had not yet applied for grading, paving, flood control or construction permits, so pending applications such as Project Blue continue. The pause ends 20 January 2027, the board can revisit it before then, and the Health Department must prepare a risk assessment.
Source: tucson.comOn 12 August 2026 the commission unanimously approved a standard checklist and review for electric service agreements between six cooperatives and large loads. Each agreement comes back for approval, and staff must find it is in the public interest, reasonably priced and not subsidized by other customers.
Source: azcc.govAdopted 5 August 2026 by a 6-1 vote and effective immediately. Data centers over 25,000 square feet or 20 MW need a planned development rezoning with a neighborhood meeting, a zoning examiner hearing and a final mayor and council vote. They must sit at least half a mile from homes and schools and 1,000 feet from commercial development, stay under 50 feet in height, cover no more than 40% of the site, submit a noise study, run backup generators only in outages or scheduled tests, and may not use drinking water for cooling without a formal water agreement. A floor amendment directs staff to keep researching a legal route to an outright ban, which the city attorney said could conflict with Proposition 207.
Source: kjzz.orgOn 31 August 2026 Attorney General Kris Mayes asked lawmakers and the governor to pass a law pausing approval of new data centers, citing power bills and a planned cut of about 30% to Arizona's Colorado River supply. It has no legal force; Senate Republicans dismissed it and the industry alliance opposes it. Governor Hobbs answered on 8 September 2026 that a state moratorium is not the right approach.
Source: azfamily.comOn 26 August 2026 the Pinal County Board of Supervisors voted 4-1 to reject the rezoning and site plan for Vermaland's La Osa Energy Center outside Eloy, a campus planned with 11 data center buildings, a 500 MW gas plant and batteries after the developer cut its original 3 GW scale by about 80%. The county zoning code has no definitions or development standards for data centers, and residents asked the board to write some.
Source: kjzz.orgAPS's rate case includes a separate rate for its largest, steadiest users. The hearing ran 18 May to 7 July 2026, a recommended order is expected by late November, and the commission must vote by 31 December 2026.
Source: azcc.govThe fiscal 2027 budget bars the Arizona Commerce Authority from accepting new certification applications from 1 July 2026 to 30 June 2029. Centers certified before the pause keep their sales and use tax exemptions.
Source: kpmg.comSigned 4 June 2026 as Chapter 111. Regulated electric utilities must file semiannual reports with the commission, and public power entities with more than one million connections must report to their boards, on interconnection requests and completed interconnections for new extra high load factor customers. On request they must file a cost-of-service study within 180 days of the effective date, and the commission may set minimum bills, contract terms, exit provisions, security and infrastructure payments for such customers. Cooperatives and utilities with 40,000 or fewer connections are exempt; the reporting chapters are repealed after 31 December 2033.
Source: azleg.govOn 19 June 2026 Governor Hobbs vetoed Sen. Frank Carroll's bill, which would have let utilities build small modular reactors co-located with an extra high load factor customer after 30 days' notice to the commission and without a certificate of environmental compatibility or hearing, and would have barred counties under 500,000 people (all but Maricopa and Pima) from regulating their land use. Her veto letter called the catch-all approach irresponsible; similar bills were vetoed in the 2025 session.
Source: azmirror.comTucson's council voted in August 2025 not to annex or supply water to the roughly $3.6 billion Project Blue; Pima County approved it in December 2025 and site work began in late April 2026. In Marana a residents' referendum bid failed and the council approved rezoning for a 600-acre Beale campus.
Source: aljazeera.comPhoenix adopted rules in summer 2025 that make it harder to build data centers near homes. Landowners have filed property-value claims under Proposition 207 (KJZZ reported eleven owners seeking $753 million), and the city has granted waivers to some sites rather than pay.
Source: azfamily.comApproved 4-1 on 3 December 2025. Ten-year agreement with Humphrey's Peak Power LLC with an 18-month load ramp, minimum monthly bills and termination fees; the developer pays for line extensions and a switchyard that serve only the campus.
Source: azcc.govNew accounts with at least 20 MW of forecast load are billed on the greater of actual demand or 80% of forecast load. Under the Large Customer Integration Process they pay up front for the upgrades a study identifies.
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