Bill to fast-track small nuclear reactors for data centers advances in Az Senate

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 becoming 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.

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.