Governor rejects fast-track for small nuclear reactors at Arizona data centers
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Katie Hobbs vetoes Arizona small modular nuclear reactor veto bill that would have exempted unproven technology from environmental review.
This article was originally published by Arizona Mirror.
A measure that would have waived certain state regulations to allow data centers and other large industrial energy users to build small nuclear reactors in rural Arizona was vetoed last week by Gov. Katie Hobbs.
“I am supportive of conversations around the responsible adoption of emerging technologies, including the potential deployment of small modular reactors that may help address generation capacity concerns,” Hobbs wrote in her veto letter. “Unfortunately, this bill puts the cart before the horse by providing broad exemptions for a technology that has yet to be commercially operationalized anywhere in this nation.”
House Bill 2774 would have let large industrial energy users build a “small modular nuclear reactor” in their facility without having to get a certificate of environmental compatibility. And in rural Arizona, they would also be exempt from local zoning restrictions.
“Governor Hobbs’ veto is misguided and demonstrates that she does not understand the intent or potential benefits of the bill,” House Majority Leader Michael Carbone, the bill’s sponsor, said in an email to the Arizona Mirror.
Carbone said he intends to “evaluate all options” going forward and is likely “to bring the issue back in a new form next session.” Even if that new iteration doesn’t win Hobbs approval, he said it will set the stage for “when we have a Governor who is willing to support jobs and economies in rural Arizona.”
“Unfortunately, it seems our current Governor is unwilling to fight for rural jobs in Arizona,” Carbone, R-Buckeye, added.
Nuclear reactor advocacy groups have raised more than $1.5 billion to push for these style of reactors amid the ongoing AI boom. Generative artificial intelligence, like Chat GPT, is generally only possible with large amounts of power and the use of data centers.
Other states, including neighboring Utah, are also investigating the use of small nuclear reactors, often called SMRs for short. (SMR stands for “small modular reactor,” and the industry largely downplays the fact that the reactors are nuclear powered.)
Arizona Senate President Warren Petersen also recently joined in a lawsuit with other state lawmakers and energy companies to limit the Nuclear Regulatory Commission’s authority over the technology.
Nuclear energy and deregulating its use has become a major focus of the administration of President Donald Trump with some critics voicing concerns that the fast-tracking of new nuclear technologies could lead to dangerous results.
In response to those concerns and criticisms, Carbone said that this new technology will be coming and that large industrial users will likely be the ones who will see the most benefit from its development.
“They need to start planning now for the future energy demand they’ll need in 10-15 years,” he said. “That’s what this bill was about.”
Carbone added that Hobbs’ veto was “shortsighted” due to how tech companies, mainly those focused on AI, are already looking at nuclear energy for their future energy demands.
“I’m optimistic and would rather have all planning options on the table and to be prepared in all possible scenarios, than close the door on a future potential opportunity to bring new jobs and rural economic development to Arizona,” he said.
There are currently no SMRs in operation anywhere in the United States, and the few American projects have been marred by high costs or have been outright terminated.
SMR technology is still relatively new and the few operational SMRs that exist are significantly different from those used on naval vessels.
Groups like the Union of Concerned Scientists have said that many of the perceived benefits have either not been proven or are not true at all. For example, there are still debates about what to do with waste created by nuclear facilities.
Advocates for their use have said Arizona’s burgeoning semiconductor industry, led by the promise of a $100 billion investment by chip manufacturer TSMC in Arizona, will significantly increase energy demands and would benefit from the technology.
“We may see a trend where large energy users will have to bring their own generation resources to the table if they want to ensure their projects move forward on time,” Carbone said when asked how Arizona and its growing tech sector may mature.
The public policy focus, he said, should be on allowing for speedy deployment of resources to allow the sector to keep up with future demand.
“My bill provided a framework for how we can accomplish rapid speed and state-level permitting reform for all future energy projects in our state, regardless of generation type,” he said.