Gov. Katie Hobbs said Tuesday that she opposes a statewide moratorium on new data centers, rejecting Attorney General Kris Mayes’ request to pause approvals and construction while Arizona develops a broader plan for the industry.
The disagreement matters in the West Valley, where Goodyear already has several large data-center campuses and planners in Buckeye and the far western county are considering additional sites as part of long-range employment and industrial growth. Hobbs’ position means there is no new statewide halt on local proposals, although utility capacity, zoning, permits and recently changed tax policy can still affect whether projects move forward.
What Hobbs and Mayes are proposing
Mayes called for the pause on Aug. 31, asking the governor and Legislature to stop approval and construction of new data centers, particularly hyperscale artificial-intelligence facilities, until the state has a plan for managing growth. Her official announcement cited rising electricity costs, reduced Colorado River supplies and the water and power demands of large facilities.
Hobbs said Sept. 8 that she shares concerns about data-center impacts but does not support a statewide moratorium. “I don’t believe that a state moratorium is the right approach,” Hobbs said, according to Arizona’s Family. She said the state should seek a balance between economic development and concerns raised by residents, utilities and public officials.
The two officials therefore differ mainly on whether Arizona should stop new projects while that policy work occurs. Mayes is seeking a temporary halt. Hobbs favors continued development under tighter accountability measures.
A tax-credit freeze is already in place
The proposed construction moratorium is separate from the three-year pause on state tax incentives for new data centers that took effect July 1 as part of Arizona’s fiscal 2027 budget. The Legislature’s summary of Senate Bill 1861 says the Arizona Commerce Authority may not accept applications or grant tax relief to new computer data centers during the pause.
That measure freezes access to a state tax benefit. It does not prohibit cities, counties or utilities from considering new data-center proposals.
Arizona’s Family also reported that Arizona Public Service has not committed to serving additional data centers for about two and a half years because of grid constraints. The utility is proposing a 45% rate increase for data-center customers, a proposal Microsoft is challenging. Those proceedings are distinct from local land-use approvals and the state tax-credit pause.
Why the decision matters in the West Valley
Goodyear has promoted data centers as a major part of its employment base. Official city announcements describe a Vantage Data Centers campus near Bullard Avenue and Van Buren Street and a Compass Datacenters campus planned for as much as 350 megawatts at full buildout.
Farther west, Maricopa County recently approved zoning changes covering nearly 900 acres near 411th Avenue and Camelback Road. The entitlement framework allows potential data-center and industrial uses, but no specific data-center construction plan has been approved. Buckeye’s new airport-area planning process also identifies data centers among several possible future employment uses, not as a committed project.
For West Valley residents, the practical result is that new proposals can continue through local review while the state debates broader rules for water use, electric-grid costs and incentives. A zoning approval would still be only one step. Developers would also need utility service, detailed plans and construction permits before work could begin.
Mayes plans an Oct. 14 town hall in Ahwatukee about a proposed hyperscale project there. No date has been announced for legislation that would create the statewide pause she requested.
Image: Arizona State Capitol in Phoenix, photographed by Wikimedia Commons contributor Wars in August 2006. CC BY 2.5. The image is representative of state government and does not depict a data-center site.