SRP Weighs Limits on Data Center Power Deals
Salt River Project's board consulted staff on curtailing new data center interconnection agreements as its growth plans expand.
Updated on Nov. 2, 2026 in Data Centers
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Salt River Project's district board consulted utility staff on Monday about options for curtailing new data center interconnection agreements. The utility plans to add 4,700 megawatts of capacity by 2035, roughly 3,000 of which is earmarked for data centers.
Why it matters
Board members raised concerns that residential customers may end up subsidizing the growing energy costs of the AI data center boom. The debate affects how electricity infrastructure costs are shared across Arizona's largest utility customers.
SRP projects 4,700 megawatts of growth by 2035, with about 3,000 megawatts tied to data centers, compared with roughly 20 years of relatively flat energy growth. Whether the board will curtail new agreements remains undecided.
The players
Salt River Project
Salt River Project is a public power and water utility serving much of the Phoenix metropolitan area.
Michael O'Connor
Michael O'Connor is SRP's chief legal executive, who said the 3,000-megawatt data center estimate seemed plausible.
The details
Board members consulted utility staff in a Monday session on options for curtailing new data center interconnection agreements. State law requires SRP to serve any eligible customer within its exclusive service territory, which covers much of the Phoenix metro, including parts of Mesa, Tempe and Chandler, limiting the board's options.
Timeline
Last year: The board approved two new tariffs for large energy customers.
September: A Power Committee meeting presented data center capacity figures.
Monday: The board consulted utility staff on curtailing interconnection agreements.
2035: SRP's target year for 4,700 megawatts of planned growth.
Big Picture
Arizona law requires SRP to serve any eligible customer within its territory, which constrains how far the board can go in curtailing new data center agreements. The debate reflects a broader tension between that obligation and rising AI-driven electricity demand in the Phoenix metro.
Arizona residential customers could see their electricity costs affected if data center infrastructure expenses are shared across the broader customer base. The board's decision on curtailing agreements would shape how those costs are allocated.
The takeaway
Large energy customers like data centers can be charged for the infrastructure they require, but how those costs are split affects everyone on the grid. Watching how SRP allocates these expenses offers insight into the cost pressures facing Arizona households.
Further reading
Explore more on Data Centers and how grid planning is shifting across Arizona.
Source note: This article includes information reported by KJZZ.
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Should your local utility pause new data center power deals to protect household bills?
