Elizabeth Lee of Gilbert speaks during a December hearing on a proposed artificial intelligence data center. The Chandler City Council’s 7-0 rejection of a development agreement and rezoning plan shed light on the need for more information on the sustainability, practicality and the need for such data centers, along with where these centers, if built at all, should be placed.
Courtesy of City of Chandler
This rendering shows what one of the main buildings might look like at an artificial intelligence data center. A plan to build the data center was rejected by the Chandler City Council in December, prompting questions in the Valley about the ideal location, specifications and resource use for A.I. data center plans going forward.
Chandler City Council members who spoke during a December meeting regarding an artificial intelligence data center plan explained their reasons for voting it down.
But left open in their denial was the question of where such data centers are supposed to be built, how many resources should be allotted to such centers, and how much strain do the facilities place on communities.
These are questions Chandler and other municipalities will need to answer if that type of development is going to continue across Arizona. And municipalities putting AI data center development plans under strict scrutiny are seeing it’s a new area with many questions that might be difficult to answer.
Chandler Councilmember Jane Poston said council was only provided a copy of a proposed development agreement with developer ActiveInfrastructure about a week prior to the anticipated council vote on approving the agreement and rezoning for a large project.
The proposed plan is for a 420,000-square-foot artificial-intelligence data center to be the centerpiece of a campus with five smaller research-type buildings to be constructed over about a five-year span.
“There were still a lot of questions, including how such a center was going to help us attract new employers to that Price Road corridor,” Poston said. “And we needed a better understanding of a data center versus an AI data center, and we got conflicting information each time. There just wasn’t enough time to sort all that out.”
The Chandler proposal, even though it was on that Price Road corridor, drew criticism from residents amid concerns it might bring noise and water pollution. That’s aside from concerns that massive electricity and water use at a time when AI data centers were meeting resistance across the U.S.
David De La Torre, Chandler’s acting planning administrator, said even with a committee having helped generate a new 10-year city general plan, guidelines still won’t go into great detail on data center restrictions and limits.
“There are no proposed major changes in the draft general plan regarding data centers,” De La Torre said. “An economic growth policy was added, reiterating what the zoning code already requires — that data centers are not permitted by right unless approved by city council through rezoning.”
Chandler passed a 2022 ordinance that addressed regulating data center noise, but also specified the centers as a primary use of a property, are only permitted in planned-area development zoning areas, as approved by council. If created as an ancillary use, data centers will have size limitations, must indicate a purpose and be located on-site.
The Chandler Council has since approved a handful of plans for an existing data center expansion, but staff reports stated the facility is switching from water cooling to air cooling.
Since 2022, the proliferation of AI funding and promotion and the growing awareness of some challenges of having data centers anywhere have taken off. Data Center Watch, a group funded by AI firm 10a Labs that tracks local opposition to the centers, reported in May 2025 that $64 billion in data center developments in the U.S. had been blocked or delayed in the previous 12 months.
Likewise, industry groups have lobbied both the Biden and Trump administrations for more ways to greenlight growth in the AI sector.
A group called the Data Center Coalition said part of its mission is to “advocate for a highly skilled and diverse technology workforce, greater access to clean energy, and competitive business and tax policies to support the growth and success of this essential business sector.”
On its website, DCC quotes Secretary of Energy Chris Wright saying, during his confirmation hearing, “I am committed to growing our electricity grid and our energy production and removing those barriers that are standing in the way.”
A lobbying group for tech firms hired former U.S. Sen Kyrsten Sinema last spring. The Arizona senator came to both Chandler Planning and Zoning Commission and council meetings in October to threaten “federal preemption” if the ActiveInfrastructure plan wasn’t approved. She said winning the AI race against China is imperative.
DCC echoed that sentiment in a thank-you letter to the Trump Administration in July for its pro-AI stance.
“With the right approach to deploying data center infrastructure, the U.S. can win the AI race safely, securely, and to the benefit of all Americans,” it wrote.
Water use
One element lost in some recent proposal discussions was water use. Simone Kjolsrud, Chandler’s water resources manager, spent time at the podium during the December hearing detailing the amount of water the proposed Price Road plant could use, given the hardware the city would involve in water delivery.
“In the case of ActiveInfrastructure, they proposed a closed-loop, air-cooled system, and the Tier 1 allocation was sufficient for their needs,” Kjolsrud told Independent Newsmedia. “Tier 1 allocation ... is the threshold by which the regulations distinguish an average water user from a large water user. For developments requesting more water than average, more than the Tier 1 allocation, the city would apply the regulations for large water users and discuss options available for a Tier 2 or Tier 3 high volume user. Tier 2 or Tier 3 water requires city council approval.”
While switching from water cooling to closed-loop air cooling appears to be the main industry talking point used to address water use, the general public appears either unconvinced or unfamiliar with that message.
Nearly all of the 30-plus opponents who spoke during Chandler’s December hearing — coupled with hundreds of submitted and online comments — said something to the effect of “data centers use too much water.”
Yegor Zenkov, a Chandler resident who said he works in the industry, said the closed-loop air-cooling concept is mysterious and unproven.
“If no one actually needs this (A.I. technology), then why are we building this?” Zenkov asked. “The scope of the misdirection makes my position clear.”
More power to them
Salt River Project spokesperson Jennifer Schuricht said the utility relies on its customer to provide accurate estimates about power load requirements so it can properly size equipment and infrastructure to fit the customer’s needs and account for this power load in SRP’s load forecasts and plans.
ActiveInfrastructure, according to plans presented, entailed burying an all-new high-megawatt line across south Chandler, which recently endured the headaches of its streets being torn up to bury a similar line for Intel’s expansion.
Even with ActiveInfrastructure on the hook, in writing, for much of the cost, the power delivery itself was a detailed, multiyear process that would take careful planning and coordination.
“This year, SRP launched a new large customer integration process to better address customer requests for major infrastructure and load,” Schuricht said. “This process includes a transmission cluster load impact study, which reviews multiple large transmission-load projects together to determine what additional infrastructure is needed to meet their service needs.”
Once the initial cluster study is completed, Schuricht said, SRP provides financial estimates to these potential large load customers about their specific incremental infrastructure costs.
“That’s so that these costs are borne by the large load customer, not SRP’s other customers, including residential and low-income customers,” she said. “Participants must make payments and satisfy other conditions to continue in the process.”
As part of its 2025 pricing process, Schuricht said, SRP’s board of directors modified the standard price plan for large load substations customers — known as its E-67 category — to ensure capacity and energy costs are not borne by other customers.
“Under the updated E-67 rate plan, new accounts with at least 20 MW of forecasted load will be subject to minimum billing requirements based on the greater of their actual demand or 80% of their forecasted load,” she said.
Faced with a massive cost of building infrastructure or facing high bills for years to come, Schuricht said some potential customers work with SRP to find ways to limit electricity use for their operations.
“SRP does offer options to large load customers, including data centers, that can help them reduce their projected load,” Schuricht said.
A plan that gets support
Chandler’s Development Services staff told the Planning and Zoning Commission, in writing, it was recommending disapproval of ActiveInfrastructure’s plans. As an alternative, staff put together a long list of detailed stipulations, and insisted the developer negotiate a development agreement with the city.
That development plan include guarantees of certain quantities of on-site, high-paying jobs by specific dates. But Chandler councilors — particular Matt Orlando — seemed doubtful ActiveInfrastructure could find investors willing to wait years into massive electrical infrastructure buildup and campus construction before making any products to sell.
De La Torre said while the business sense of a project is largely for council to consider, location and fit are staff’s responsibility.
“Both location fit and potential resources used are taken into equal consideration when reviewing a proposed development,” De La Torre stated. “One does not weigh more heavily than the other because both factors need to comply with city adopted policies.”
Jason W. Brooks News Editor | Chandler Independent
Jason W. Brooks joined Independent Newsmedia, Inc., USA, in July 2021 as an associate editor. After a year covering Buckeye, he has covered Chandler since the fall of 2022, in addition to assisting the Daily Independent throughout his time at INI.
Education: University of New Mexico, bachelor of arts in journalism and mass communication, print emphasis, English minor.
Random Fact: He and his siblings witnessed a Space Shuttle launch and landing in the same year in person, on opposite coasts.
Hobbies: Karaoke, bicycling and American Sign Language.
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