More than 25 years before Arizona reached statehood, the company that would eventually become APS began providing gas services to Phoenix, with the city’s first streetlamp lit in 1887. Not long after the turn of the century, Arizona farmers put their land up as collateral for federal funds to build Roosevelt Dam, ensuring a reliable flow of water and power would reach the Valley.
For decades, APS and SRP have provided the electricity needed for Greater Phoenix to spread its wings — but the region’s recent growth spurt is unlike any other period in history.
“I’ve been [in the industry] for 25 years, and there’s no other time in my career that looked like the last few years,” says Jacob Tetlow, executive vice president and COO of APS. “It wasn’t that long ago that we were talking about a utility death spiral.”
But over the last three years, the Valley’s industrial sector has boomed, bringing data centers and advanced manufacturers to the desert. That rapid expansion has led to a spike in power use that continues trending upward.
According to APS’s 2025 Corporate Responsibility Report, 2024 saw a new peak energy demand of 8,210 megawatts, breaking the previous record set the year prior.
“We’re about to celebrate 140 years as a utility, and up until recently, our largest customer ever served was a mine that needed 75 megawatts,” he continues. “Now, we have customers talking about 2,000 megawatts. These are really big numbers that require a lot of infrastructure to deliver.”
By 2038, APS resource planners expect peak demand to exceed 13,000 megawatts, increasing by 60% in just 14 years. As of today, APS has committed to just under four gigawatts for data centers, commercial, industrial and a small amount of residential development.
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There are also an additional 19 gigawatts that have been requested, but the utility hasn’t promised to deliver. That queue, Tetlow explains, is not for residential, commercial or industrial customers, but data centers present a unique challenge due to the quantity of power being requested.
“When someone asks for 1,000 megawatts, I have to build an entire power plant,” he continues. “The lead time on a turbine is about four years and another two to build the plant once I get it.”
Not every data center is put on this list, and Tetlow notes that the 19-gigawatt number is somewhat misleading since many of these developers are making requests across the country, as speed to market is critical in that sector. Keeping up with load growth requires investing in infrastructure that takes time to complete. As those projects are built out, Tetlow says APS has two guiding principles that inform its decision-making.
“We can’t put reliability at risk. It’s too important when it’s 118 degrees outside, and we will not compromise the well-being of our customers,” he continues. “Second, we won’t serve [a company] if it comes at a cost to the residential customer.”
That’s why the utility created a subscription model, where APS asks businesses in the queue if they’re willing to commit resources toward infrastructure costs, resulting in a shorter wait time for service.
“We have an obligation to serve every customer, including the data centers, and we’ll work to do that,” Tetlow says. “But it takes time.”
Feeding the pipeline
Located west of Greater Phoenix, Palo Verde Nuclear Generating Station is the nation’s largest nuclear power plant by output, with a capacity of approximately 4,000 megawatts. APS calls Palo Verde the “cornerstone” of its clean energy mix, along with solar, batteries and a small amount of wind.
When it comes to providing power for customers like data centers, Tetlow says that solar can only do so much. A household’s energy consumption varies as the AC kicks on more frequently during the day and less at night. Data centers, however, need the same amount of power at all times, meaning solar can only meet part of that demand.
The answer, Tetlow says, is adding dispatchable generation that can be used when the sun isn’t shining.
“This state is not going to grow at the level people are asking for unless we get new [natural gas] pipeline infrastructure,” he continues. “Our country needs a nuclear renaissance, but it would take 10-plus years to build another nuclear plant,” he concludes. “The bridge is natural gas. When our Transwestern Pipeline goes into service in late 2029, we’ll have much greater capacity to serve our backlog.”
