The only thing bigger than the data center boom is the confusion about whether data center growth impacts reliability and affordability for SRP’s residential customers. Given the ongoing conversation, I want to use this opportunity to share the facts about data centers in SRP’s service territory. 

As a not-for-profit utility, we take pride in providing what is among the most reliable service in the nation at prices that are on average 18% lower than other major utilities in the state. We don’t have investors, which means our decisions are driven by customer needs, not maximizing profits. SRP is proud of the fact that our customers have ranked us Number One in the country in J.D. Power’s Residential Electric Customer Satisfaction study for 24 consecutive years. 

SRP has been a community-based organization since 1903. Throughout its history, we have worked with cities and towns to help the Valley become the major metropolitan area we call home. Today, local governments determine whether data centers are appropriate for their communities. Like any other customer in our service territory, once a data center secures proper zoning and local city or county approval, SRP will plan and work to serve their electrical needs.

In 2025, data center customers estimated peak demand was 441 MW, which is 5.1% of the highest peak demand total of 8,542 MW, making them a growing but still manageable share of our total electric usage.

To meet SRPs growing electric system demand, we rely on large load customer forecasts and economic forecasts, paired with our own internal expertise and industry best practices, to size infrastructure correctly and plan for future demand. Through SRP’s Integrated System Plan, presented to SRP’s publicly elected Board of Directors, we align generation, transmission and distribution to manage growth while maintaining affordability and reliability. In other words, we take significant steps to keep the lights on and our prices low.

SRP is committed to helping ensure new data centers in our service territory do not raise electric rates for residential customers. Like all large industrial customers, data centers must pay for the infrastructure to serve them, such as upgraded transmission lines, substations and more. This is a long-standing requirement that helps ensure costs to serve new data centers are not shifted to residential customers. 

We recently took additional steps to further protect residential customers from cost shifts associated with adding new large load customers: 

• Large Customer Integration Process (LCIP): Introduced in 2025, this process requires a new type of study to identify new infrastructure and other system upgrades required to serve new large load customers such as data centers. SRP gives these proposed customers cost estimates for their specific upgrades. The customer must pay these costs upfront, so they are not paid by other SRP customers. This process also helps make sure only viable projects move forward.

• Updated E‑67 Price Plan: Approved by SRP’s Board of Directors during our 2025 pricing process, this new price plan requires customers with at least 20 MW of forecasted load to meet minimum billing requirements tied to either their actual use or 80% of their forecasted demand in addition to dedicated transmission and substations. This helps prevent us from overbuilding generation and creating costly stranded power infrastructure.

There is also considerable discussion regarding data centers and their water use. SRP does not control how much water data centers use. SRP provides raw water to municipalities, not directly to data centers. Local governments, like cities and counties, set water‑use requirements and may require high‑intensity industrial users to secure independent supplies. 

The Phoenix area attracts data centers largely because of favorable tax incentives, minimal natural disasters, abundant fiber‑optic infrastructure, available land, and access to reliable, cost‑effective electricity. These market and policy factors — not utility decisions — drive data center growth.

SRP will continue to be a trusted economic partner in our communities, meeting the electric needs of large load customers like data centers while keeping the lights on and SRP electric rates low for our residential customers.

Jim Pratt is general manager and chief executive officer of SRP.