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A Republican measure that would waive certain state regulations to allow data centers and other large industrial energy users to build small nuclear reactors in rural Arizona inched closer to coming law Tuesday.
House Majority Leader Michael Carbone told the Senate Natural Resources Committee on March 11 that his legislation is about removing state regulation — and beating foreign adversaries who are doing similar things. Multiple other countries have begun to pursue the technology, including allies and adversaries to the United States. Carbone gave his colleagues in the House a similar pitch last month.
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His House Bill 2774 would do that by letting large industrial energy users place 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.
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.)
“The point is to have a conversation. We should not be afraid of this,” Carbone told senators, adding that the technology is safe. “We are not going to be able to have these conversations in a couple of decades, I don’t think.”
Carbone admitted to the committee that 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.
Carbone attempted to compare SMRs to nuclear powered submarines, though the comparison isn’t a great one. SMR technology is still relatively new and the very 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.
“This is basically another gift to data centers, which are already pretty unaccountable,” said Sandy Bahr, director of the Grand Canyon Chapter of the Sierra Club, pointing out that data centers are large users of water in the state.
The bill’s sponsor, as well as other Republicans on the committee, said that SMRs are needed to make Arizona competitive, adding that they believe renewable energy cannot meet the demands of data centers, although Carbone contended that all energy options need to be considered.
“I just feel that we shouldn’t be left behind when other folks are talking about this conversation across the country,” Carbone said in response to a question from Sen. Priya Sunderashen, D-Tucson, about why a new technology should not be subject to regulations. “Deregulation has to occur in Washington, first off, but let’s start having the conversation so we aren’t left off the map.”
Republicans on the committee applauded the idea, with Sen. David Gowan, R-Sierra Vista, saying that he believes that SMRs should not be limited to rural areas.
“We could introduce these around the state itself. I think it is good everywhere,” Gowan said.
Others, like Sen. Tim Dunn, R-Yuma, said they saw SMRs as an opportunity for areas of the state that will soon be impacted by the closure of coal plants.
And advocates 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.
“Semiconductors use a hell of a lot more energy than data centers,” said Russ Smoldon, a lobbyist representing the Arizona Municipal Power Users Association.
But critics said the state would be wise not to move too fast.
“This bill removes critical oversight and public oversight creating unnecessary risks for Arizona,” said Sen. Rosanna Gabaldón, who voted against the bill. The Green Valley Democrat said she is not opposed to nuclear energy but wants to see it “applied responsibly,” a sentiment echoed by her colleagues.
“I think there is a lot that is exciting about SMRs, but we need to make sure that the process does not skip any steps,” Sundarashen said.
The bill passed out of committee along party lines and will head to the full Senate for a vote next. It passed out of the House of Representatives along party lines, and if the Senate approves it, the bill will head to Governor Katie Hobbs.
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