Trump’s tech giants pledge to shield ratepayers doesn’t cover biggest Arizona data center projects

WASHINGTON – Prodded by President Donald Trump, top technology companies signed a “ratepayer protection pledge” this week, committing to ensure that the explosion of data centers won’t drive up consumer energy costs. 

Google, Meta, Microsoft, OpenAI, xAI, Oracle and Amazon Web Services signed on. But the three largest data centers in Arizona are being developed by companies that didn’t sign the pledge, and consumer advocates and others are skeptical about the impact of Trump’s initiative. 

“Arizona’s booming data center industry must work for the people of our state, not the other way around,” Gov. Katie Hobbs’ spokeswoman Liliana Soto said by email. “President Trump’s proposal is interesting in concept, but currently there are too many unknowns to make any type of assessment.”

Trump unveiled the pledge during his Feb. 24 State of the Union address. 

“The tech companies and the data centers will be able to get the electricity they need, all without driving up the cost for consumers,” he said at a White House meeting Wednesday with tech executives. “The big tech companies are making five important commitments to keep utility prices down for American consumers.”

Those commitments: building, bringing or buying new power supply; paying to upgrade power delivery infrastructure; paying for power they have access to whether they use it or not; investing in local job creation and workforce development; and contributing to electric grid and community resilience. 

But Tom Prezelski, senior political advisor at Rural Arizona Action, said “the president is not in a position to enforce any of that” and “where things really matter is at the level of the Arizona Corporation Commission” and other state and local agencies with direct enforcement authority.

“Utilities are allowed a modest profit, so if they have to eat a little bit of their profits in order to expand capacity, they should do that,” Prezelski said. “And that’s something that this corporation commission doesn’t seem willing to do right now.”

The developers behind the largest data center projects in Arizona – Vermaland LLC, Tract and EdgeCore Digital Infrastructure – did not respond to requests for comment on Trump’s pledge and the idea of shielding ratepayers from costs of expanding capacity to meet their demands.

At the Arizona Corporate Commission, which regulates utilities, the chair, Kevin Thompson, echoed Trump’s stance that other customers should be shielded from high costs related to data center expansion.

“We’ve said since Day 1 that development has to pay for itself,” Thompson said. “All growth, regardless of what it is … they have to pay their own way. We’re not going to put that cost onto the backs of the residential and small business consumers.”

But he said, his agency can only “mitigate the impact as much as we can.” 

The largest data center currently planned in Arizona will be south of Eloy. Vermaland, which is developing the 3 gigawatt project, has no obligation to pay for the required expansion of electric capacity, according to opponents. 

“It’s not the excess power itself that is driving up costs for everybody else. It’s the investment they have to make in expanding their capacity,” Prezelski said. 

That’s because utilities pass infrastructure costs to customers when setting rates.

Prezelski wants ironclad assurances that data center developers and the ACC won’t pass those costs to other ratepayers. “All the new lines, the new generator contracts with other utilities, that’s all very expensive,” he said. “Those costs have to be spread out in such a way that we’re not leaning on residential ratepayers to pay for all that.”

Arizona Public Service, the state’s largest energy provider, is seeking a 14% rate increase on average, with residential customers facing a 16% increase and data centers paying 30% to 45% more. 

“When the utilities build extra capacity, they’re going to have to get that paid for somehow,” Prezelski said. 

Thompson noted that the rate increases would allow the APS to recoup money it already invested. “What they’re requesting is just to recover dollars that they spent a year ago,” he said.

By 2030, according to the Electric Power Research Institute, data centers in Arizona could consume more than 20% of power used statewide. 

“As a global tech leader in AI, taxpayers shouldn’t keep subsidizing this highly profitable industry,” said Soto, the governor’s aide.

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