Arizona Senate Propels Legislation to Accelerate Small Nuclear Reactors for Data Centers

A Republican bill aimed at relaxing state regulations to facilitate the construction of small nuclear reactors for industrial energy use in rural Arizona advanced in the legislature on Tuesday.

House Majority Leader Michael Carbone informed the Senate Natural Resources Committee that his initiative seeks to eliminate regulatory barriers and enhance Arizona’s competitiveness against both allies and adversaries embracing similar technologies. “We should not be afraid of this,” Carbone emphasized, advocating for open discussions about the potential of small modular nuclear reactors (SMRs).

Carbone’s House Bill 2774 proposes allowing large industrial facilities to install SMRs without the necessity of obtaining a certificate of environmental compatibility. Additionally, these entities would be exempt from local zoning laws, facilitating the rapid deployment of such energy sources.

Nuclear reactor advocacy groups have mobilized significant funding, exceeding $1.5 billion, to promote the adoption of SMRs, particularly amid the rise of artificial intelligence. The technology supporting generative AI, like Chat GPT, demands substantial energy, often supplied by extensive data centers.

Neighboring states, such as Utah, are similarly exploring the feasibility of SMRs. The term “small modular reactor” is frequently used for this new technology, which its proponents argue is safe. However, critics point out that to date, there are no operational SMRs in the United States, with previous projects facing financial hurdles and, in some cases, cancellation.

Critics of the bill have raised important concerns. While the bill’s supporters assert that SMRs could enhance Arizona’s competitiveness, environmental groups have voiced worries about granting substantial leeway to data centers, which are already significant consumers of water. Sandy Bahr, director of the Grand Canyon Chapter of the Sierra Club, remarked, “This is basically another gift to data centers, which are already pretty unaccountable.”

Sen. Priya Sunderashen, D-Tucson, challenged Carbone on the necessity of deregulating emerging technologies, prompting him to respond that discussions around these innovations must occur to ensure Arizona keeps pace with nationwide advancements.

The bill has garnered mixed reactions from lawmakers. Some, like Sen. David Gowan, R-Sierra Vista, suggested that the reach of SMRs should not be confined to rural regions, while others perceive this technology as a solution for areas preparing for the cessation of coal operations. The anticipated energy demands from Arizona’s expanding semiconductor industry, particularly with TSMC’s $100 billion investment, further underscore the urgency for new energy sources, which could increasingly rely on SMRs.

However, dissenting voices caution against hastiness. Sen. Rosanna Gabaldón, who opposed the bill, expressed concerns regarding the lack of oversight it introduces. She emphasized the importance of responsible application of nuclear energy, echoing sentiments shared by other lawmakers. “We need to ensure that the process does not skip any steps,” noted Sen. Sundarashen.

The bill, which passed out of committee along party lines, will soon be presented for a full Senate vote, following its earlier approval in the House. If it advances, it will subsequently require the assent of Governor Katie Hobbs.