ACC and City Leaders Take Action to Manage Data Center Growth As Metro Phoenix Ranks #2 in North America for Planned Development

Phoenix, Ariz.- According to the latest JLL North American Data Center Report - Midyear 2025, metro Phoenix ranks second in North America when it comes to leading locations for data center development. Among the top three, Northern Virginia ranked number one and Dallas-Ft. Worth ranks just below Phoenix at number three. Development is pushing toward the outskirts of Phoenix as operators look to secure enough acreage to build large campus developments.

In today's data center market, power has become the new real estate - and Arizona is a prime destination. A market that boasts a steadfast, reliable electricity grid combined with comparatively lower electricity prices is hard find across the country. Operators are securing land today to capture tomorrow's opportunity. Approximately 1,300 MW of data center development is currently under construction, and 4,154 MW planned, with AI driving demand.

Last year, a developer of a master-planned data center park announced the development of a 2,000-acre property in Buckeye with plans to establish a $20 billion data center park, which when completed would make the site one of the largest data center parks in the country. Meanwhile, leaders in cities like Chandler, Phoenix, Mesa, and Tempe have established new policies surrounding the rapid data center development. Tucson and Pima County officials recently developed ordinances in response to Project Blue - a proposed billion-dollar data center development.

The Commission is also considering new policies to further protect residential and small business customers, including developing new tariffs, rate structures, and a new tier of customers specifically for data centers. Meanwhile, many proposed developments are planning to provide their own power by constructing their own independent electricity generation or providing financing to expand current utility-owned power plants. "What you're seeing across the U.S., the utilities are using rate structures that explicitly put all of the costs on the data centers," said Paul Walker, an energy markets and regulation consultant with the firm Theseus, LLC.

"It's important that the Commission be proactive in reviewing existing policies and potentially forming new policies to continue to safeguard ratepayers and to ensure that large users like data centers shoulder the costs of building new electricity generation and infrastructure that solely benefits a particular business or industry," said Chair Kevin Thompson. "The Commission works vigorously to ensure that our regulated utilities are not only prepared to produce enough electricity to meet peak demand during the hot summer months, but also to expand generation and infrastructure in an efficient manner to handle the influx of new residential, commercial, and industrial growth."

The JLL North American Data Center Report reveals the vacancy rate in the Valley is at a mere 2.3%. Since 2020, Phoenix's data center project pipeline has more than tripled, currently, there are about 5 GW worth of projects in the process of being built, or still in the planning phase.

Developing data centers has become both a national economic and national defense issue, and it is bipartisan. President Biden issued an executive order earlier this year aimed at speeding domestic construction of artificial intelligence infrastructure and shoring up the national security risk involved in data center technology. President Trump issued two executive orders, one in July, concluding that data centers are essential to "national security, economic prosperity, and scientific leadership" and "data centers and infrastructure that powers them, including high-voltage transmission lines and other equipment" are national security priorities.

To read the report, go to https://www.jll.com/en-us/insights/market-dynamics/north-america-data-centers