Don’t blame data centers for Arizona’s Colorado River cuts, water experts say
Water experts in Arizona contend that data centers are not the primary cause of the state's Colorado River water shortage, but rapid growth and insufficient water-use data are prompting calls for greater transparency. Governor Katie Hobbs signed a three-year moratorium on new data center tax breaks, and the Attorney General called for a pause on new construction, though the latter was rejected.
Amid deep cuts to Arizona's Colorado River water allocation, public concern has risen regarding water consumption by data centers. However, water law experts like Rhett Larson of Arizona State University assert that data centers are not the direct cause of the current crisis, despite their rapid growth and significant water usage, particularly for cooling and power generation. Arizona is a major hub, with 113 data centers in operation and more planned.
Arizona Attorney General Kris Mayes called for a pause on new data center construction due to power and water intensity, but Governor Katie Hobbs rejected this. Hobbs, however, signed a budget bill implementing a three-year moratorium on new tax breaks for data centers. Earlier, her proposal for a 1-cent-per-gallon water fee for data centers, estimated to generate $6 million annually, failed to advance. A major challenge in assessing impact is the lack of public water usage data, as the Arizona Department of Water Resources does not track most data centers' consumption, and utilities cite privacy policies.
While direct data center water usage for cooling is a small fraction of Arizona's total consumption, their indirect water footprint from electricity generation is much higher. Iron Mountain, for example, uses closed-loop cooling systems in its Phoenix and Scottsdale facilities to reduce water use. Agriculture remains the largest water consumer in the state, accounting for 72% of usage. Experts caution that without sustainable management, data centers could exacerbate future water issues.
The transparency issue extends beyond Arizona, with California Assemblymember Diane Papan authoring a bill to mandate data centers report projected water usage before obtaining business licenses or permits. This highlights a broader legislative movement aiming for better understanding and management of data center resource demands.