TUCSON, Ariz. (KGUN) — As electricity costs climb across the country, experts say Arizona is not immune, and one energy-hungry industry is playing a growing role in those higher bills.
Data centers, which power everything from streaming movies to artificial intelligence, consume massive amounts of electricity. The U.S. Energy Information Administration reports the nationwide average residential electricity rate rose more than six percent over the last year, while Arizona saw an increase of nearly two percent from May 2024 to May 2025.
In Tucson, the proposed “Project Blue” data center promised jobs and tax revenue but drew strong opposition over water use, secrecy, and long-term power demand.
“Your vote earlier today to put Project Blue in the past tense is a massive win for Tucson,” one resident told the City Council during public comment.
According to analysis from Sky Island AI, the facility could have required up to 1.3 gigawatts of electricity, roughly equal to the power needs of the entire city of Tucson, or more than one million homes.
“In addition to the water use, this is a problem because of the energy use,” said council member Kevin Dahl.
A 2024 Electric Power Research Institute report estimates Arizona’s data centers could more than double their energy use by 2030, consuming up to 16.5% of the state’s total electricity. That means higher utility costs could hit Arizonans even if no new facilities are built in Tucson.
Mayor Regina Romero said the city is working on new rules for future proposals.
“Tucson needs and deserves clear and enforceable guardrails to provide the greatest protection to our residents and environment when it comes to data centers,” Romero said.
Meanwhile, the company behind Project Blue, Beale Infrastructure, has hinted it may pursue a location elsewhere in Pima County.
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Kenny Darr is a reporter for KGUN 9. He joined the team in January 2023. Before arriving in Arizona he was an Anchor and Reporter at KADN in Lafayette, LA. Share your story ideas with Kenny by emailing kenny.darr@kgun9.com or by connecting on Facebook, Instagram or Twitter.
