Utility Weighs Limits on Data Center Power Hookups

Salt River Project's planned 3,000 megawatts for data centers raises questions about who pays for the grid buildout by 2035.

Updated on Nov. 2, 2026 in Data Centers

Bold vector editorial illustration of a single coral transmission tower on desert scrub, its cables running toward a cluster of teal data center buildings on the horizon. — Salt River Project is weighing limits on new data center grid hookups as it plans to add about 3,000 megawatts for them by 2035, raising questions about who pays for the buildout. AI Illustration. Upload story photo >

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Should your local utility pause new data center power deals to protect household bills?

Salt River Project's district board consulted utility staff on Monday about options for curtailing new data center interconnection agreements. The research-stage discussion is not a policy decision, and no moratorium has been adopted.

Why it matters

SRP plans to add 4,700 megawatts by 2035, roughly 3,000 of them for data centers, and state law requires it to serve any eligible customer in its territory. Board members worry residential customers could end up subsidizing the growing energy cost of the AI data center boom.

The planning figures are utility projections: 4,700 megawatts of growth by 2035, with about 3,000 megawatts attributed to data centers, which SRP's chief legal executive called a plausible estimate. The stub does not report how the estimate was derived, and the board has not finalized any curtailment option.

The players

Salt River Project (SRP)

A public utility serving much of the Phoenix metro, which is planning 4,700 megawatts of growth by 2035.

Michael O'Connor

SRP's chief legal executive, who said the 3,000-megawatt data center estimate seemed plausible.

The details

Salt River Project is a public utility whose exclusive service territory covers much of the Phoenix metro, including parts of Mesa, Tempe and Chandler. Because state law obliges it to serve eligible customers in that territory, it cannot simply refuse connections, so curtailment would have to work through interconnection agreements, the contracts that govern when a large facility is connected to the grid. To cover future costs, SRP collects the estimated expense of meeting 80% of a data center's peak energy demand in advance, along with collateral against associated transmission costs, under two large-customer tariffs the board approved last year.

Last year: the board approved two new tariffs for large energy customers.
September: a Power Committee meeting presented data center capacity figures.
Monday, November 2, 2026: the board consulted staff on curtailing new interconnection agreements.
2035: SRP's target year for 4,700 megawatts of planned growth.

The Tech Race

Arizona's utilities are now weighing how to handle AI data center demand within legal obligations to serve all eligible customers. SRP's 2035 plan, with about 3,000 megawatts tied to data centers, places it among the utilities absorbing the largest share of new computing load in the state.

Residential customers in SRP's territory could see their bills affected if data center costs are not fully covered by the tariffs and collateral the utility collects. Any change to interconnection rules would apply to future agreements, and the stub gives no timeline for a board decision.

The takeaway

Watch whether the SRP board adopts a curtailment policy and how it changes interconnection agreements for new facilities. The 3,000-megawatt data center estimate is the figure to track against future planning updates.