Can Arizona water systems keep up with development?
Arizona's rapid industrial growth, including expanding data center campuses and semiconductor facilities, is putting a strain on the state's water infrastructure. The article highlights the critical need to upgrade aging water systems and plan for the significant water demands of large industrial users to sustain future development. Ensuring robust water and power infrastructure is becoming a key determinant for project feasibility across the state.
Andrew Goodwin, president of PPS, a Phoenix-based specialty contractor, reports that Arizona's rapid industrial expansion, including data center campuses and semiconductor facilities, highlights a critical challenge: the state's water infrastructure. While growth above ground is evident, the underground systems for water and wastewater are becoming the primary determinant for continued development, shifting Arizona from a land-driven to an infrastructure-driven market. Industry leaders at the 2026 AZRE Forum emphasized that long-term access to reliable water and power dictates project feasibility.
The article details three key issues: replacing decades-old infrastructure with minimal service disruption, early planning for large industrial water users, and ensuring physical systems can support new water-management technologies. The EPA estimates Arizona requires approximately $12 billion over 20 years for drinking-water infrastructure, with complex upgrades often needing to keep systems operational during construction. PPS specializes in rehabilitation and repair approaches to restore aging pipelines from within, minimizing excavation and disruption to communities and critical facilities like hospitals and manufacturing plants.
Industrial users, particularly those in metro Phoenix, account for nearly 40% of municipal water use, with varying demands for cooling, process requirements, and reuse strategies. The availability and redundancy of water capacity, much like power, now critically influence site selection and project viability for data centers and other industrial facilities. Arizona is investing in solutions like smart leak detection and advanced water purification, such as Phoenix's Pure Water initiative, but these technologies still require robust physical infrastructure for distribution and storage. Goodwin stresses that water infrastructure must be integral to economic development discussions to ensure Arizona can compete for future industries.