How AI Could Spike Costs for Arizona’s Energy Customers

AI use is going mainstream, whether we're ready for it or not.

I admit that I use AI every day. It's like having a personal assistant who can help me research, generate topic ideas, and summarize articles so I can get to the heart of topics I'm interested in. I don't have to spend hours doing research anymore. 

With the right AI prompt, the information is aggregated and right there at my fingertips in seconds.

Like any new technology, there are people who misuse it. There are students who use AI to write their school papers, people who create those "not quite right" images, and then try to pass them off as "historical" or original (we see you, you 6-fingered freak!).

And yes, there are even "content creators" who use AI to write their articles. Just like those uncanny valley images, we detect that "electronic voice" and reject it. However, AI can be a valuable asset as a tool rather than a crutch.

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Data Centers are Expanding in Arizona

The increased use of AI needs data. A lot of data. You've probably noticed that everything from the search engine you rely on to your favorite online retailer has an AI assistant. All that data has to come from somewhere. The answer is data centers.

Wikipedia describes a data center as "a physical facility used to house computer systems and associated components, such as telecommunications and storage systems."

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"Data centers organize, store, manage, and process critical applications and data." In other words, "the cloud" requires physical locations and real computer technology to handle our myriad requests.

All this growth has led to great expansion. According to Axios, the Phoenix metro area is "the second-largest data center growth market in the United States. "

Phoenix currently has around 7 million square feet of inventory with another 5.5 million square feet of space planned or under construction.

The rapid expansion of AI-driven data centers has a downside. Data centers require a tremendous amount of electricity to run, and the spike is creating a significant increase in energy consumption in Arizona. The most considerable burden is falling on the Phoenix metropolitan area, which is rapidly becoming a major data center hub.

AI's Impact on Arizona's Rising Energy Costs

AI queries require ten times the electricity of traditional search engines, and data centers are creating an ever-increasing demand for power.

They used 7.5% of Arizona's electricity last year. By 2030, that number is expected to jump to 16.5%.

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Arizona Public Service (APS), the state's largest power company, is accounting for demand not only from data centers but also increased demand from electric vehicles and advanced manufacturing. They estimate that by 2031, peak electric load will jump to around 40%.

Arizona's Residential Customers Could Pay the Increased Energy Costs

All that energy consumption is going to come with a price, and guess what? You could end up paying for it.

APS plans to shift the cost away from its residential customers by imposing energy tariffs on the data centers. The company is still looking at options, but if nothing is done, residential customers could end up paying higher utility bills.

Cities like Mesa have seen the writing on the wall and have opted out of the data center expansion in their area. As the economy struggles, increasing the cost of this necessity could severely impact Arizona's residents. Let's hope the decision makers use AI to grow smarter, not just faster.

Sources: Wikipedia | Axios Phoenix | News12 | Straight Arrow News