Governor’s office unveils state strategic energy plan

Governor Katie Hobbs' office in Arizona has unveiled a state strategic energy plan, a comprehensive report developed by her Arizona Energy Promise Task Force. The 36-member task force, established via executive order in September, produced 31 recommendations to address critical energy challenges, including significant load growth driven by data centers and semiconductor manufacturers, rising utility bills, supply chain issues, and extreme weather. The plan, spearheaded by Hobbs’ Office of Resiliency Director Maren Mahoney, emphasizes transitioning to renewable energy sources while acknowledging the current reliance on natural gas. Key recommendations include supporting coal plant conversion, increasing solar and wind deployment, and developing "low-carbon, water-use firm" technologies. The governor anticipates challenges in securing support from the Republican-controlled Arizona Corporation Commission and Legislature, which are largely supportive of fossil fuels. Specifically addressing data center growth, the report recommends incentivizing developers to engage proactively with communities and invest in local priorities, along with increased collaboration with local governments to inform the public about projects. It also suggests exploring "bring-your-own-capacity" programs to mitigate the impact of data center costs on utility bills. Notably, the report recommends revisiting state tax incentives for data center projects, a suggestion that faced objections from the Data Center Coalition, Microsoft, and Google, and has shown little interest from the Legislature. Additionally, the task force explored advancing geothermal and nuclear energy, with recommendations for tax incentives and streamlined permitting for new nuclear projects, despite disagreement from the Arizona Public Interest Research Group on nuclear energy's affordability.