The facts about SRP and data centers
News ClipArizona Capitol Times·Phoenix, Maricopa County, AZ·3/31/2026
Jim Pratt, CEO of SRP, provides an overview of how the utility manages the growing demand from data centers within its service territory, ensuring reliability and affordability for residential customers. He explains SRP's policies, including the Large Customer Integration Process (LCIP) and the updated E‑67 Price Plan, which require data centers to cover their infrastructure costs. The article also touches on water usage, noting that local governments set water-use requirements, and that market factors like tax incentives drive data center growth in the Phoenix area.
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Gov: SRP, SRP’s Board of Directors, Local governments, cities, counties
Jim Pratt, General Manager and CEO of Salt River Project (SRP), addressed concerns regarding the impact of data center growth on electric reliability and affordability for the utility's residential customers in a guest commentary. Pratt emphasized that SRP, as a not-for-profit utility, prioritizes customer needs and maintains service at prices on average 18% lower than other major utilities in Arizona.
He stated that local governments determine the appropriateness of data centers, and once approved, SRP plans to meet their electrical needs. In 2025, data centers accounted for 441 MW of peak demand, or 5.1% of SRP's total peak demand. To manage this growth, SRP relies on an Integrated System Plan, approved by its publicly elected Board of Directors, which aligns generation, transmission, and distribution to maintain affordability and reliability.
Pratt highlighted SRP's commitment to ensuring data centers do not raise residential electric rates. Like all large industrial customers, data centers are required to pay for their dedicated infrastructure, such as upgraded transmission lines and substations. To further protect residential customers, SRP introduced the Large Customer Integration Process (LCIP) in 2025, which requires proposed large load customers to pay upfront for identified system upgrades. Additionally, the updated E‑67 Price Plan, approved by SRP’s Board of Directors in 2025, mandates minimum billing requirements for customers with at least 20 MW of forecasted load, linked to actual use or 80% of forecasted demand, to prevent the creation of stranded power infrastructure.
Regarding water use, Pratt clarified that SRP provides raw water to municipalities, not directly to data centers, and local governments are responsible for setting water-use requirements. He concluded by noting that favorable tax incentives, minimal natural disasters, abundant fiber-optic infrastructure, available land, and reliable, cost-effective electricity are the primary market and policy factors attracting data centers to the Phoenix area.