Controversial Surprise data center project clears key environmental review

The Arizona Corporation Commission unanimously approved the project's environmental certificate despite concerns from nearby residents.

Published on Feb. 4, 2026

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A controversial data center and power plant development in the West Valley of Arizona has cleared a key hurdle with a unanimous vote by the Arizona Corporation Commission in favor of a Certificate of Environmental Compatibility for Project Baccara. The project, which would include a 700-megawatt gas-fired power plant to fuel a data center, is offering an alternative to the typical data center model that can strain the grid and contribute to rising utility costs.

Why it matters

In Arizona, where utilities are struggling to keep up with the explosive growth of data centers, Project Baccara is proposing a 'bring your own power' approach that could help meet the state's energy needs. However, nearby residents are concerned about the potential environmental and public health impacts of the gas-fired power plant, including water use, air pollution, and its proximity to homes and personal wells.

The details

The environmental certificate approval process examines new developments and their impact on water, noise and air pollution. While the Line-Siting Committee preliminarily approved the certificate, saying the project's 'contribution to meeting the need for an adequate, economical, and reliable supply of electric power outweighs the minimized impact of the project on the environment and ecology of the state,' residents of nearby communities argue the potential impact on the environment is not minimal. They are concerned about the plant's water use, air quality, and its location in one of the most air polluted counties in the country.

  • On February 4, 2026, the Arizona Corporation Commission voted unanimously in favor of the Certificate of Environmental Compatibility for Project Baccara.
  • In December 2025, the commission's Line-Siting Committee preliminarily approved Baccara's environmental certificate.

The players

Project Baccara

A controversial data center and power plant development in the West Valley of Arizona that is proposing a 'bring your own power' approach to meet the state's growing data center energy needs.

Arizona Corporation Commission

The state regulatory agency that voted unanimously to approve the environmental certificate for Project Baccara.

Takanock

The Michigan-based developer behind Project Baccara, which could produce up to 100 permanent jobs and $50 million in tax revenue for Maricopa County.

Hollie Tolmachoff

A resident who lives near the proposed Project Baccara site and expressed concerns about the project threatening the rural character of the area and the way of life for her family.

Margaret Little

A member of the Line-Siting Committee who voted against recommending the environmental certificate, citing concerns about the air quality issues in the area.

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What they’re saying

“The West Valley is really taking a lead in educating the future workers for data centers. Estrella Mountain Community College, as well as Glendale Community College have data center academies. Our point is always 'let's educate them at these community colleges. Let's employ them at Project Baccara.'”

— Cepand Alizadeh, Government affairs specialist for The Arizona Technology Council (azcentral.com)

“We pull our water from a well. We grow our vegetables, harvest fruit from our small orchard, and raise chickens for eggs and meat every day. Our children climb trees. Race across the grass, check on our neighbor's cattle and catch toads at sunset. This is the life we hoped for. Project Baccara, planned just a half mile from our home, is threatening all of this.”

— Hollie Tolmachoff (azcentral.com)

“I don't believe that this is a good location for the project. The air quality issues in this area concern me immensely. To add a power plant to this populated area is not the right move.”

— Margaret Little, Committee member (azcentral.com)

What’s next

The project still needs approvals from Maricopa County and from Luke Air Force Base, a training facility about a mile away from the site, to move forward.

The takeaway

This decision by the Arizona Corporation Commission highlights the ongoing tension between the state's need for reliable and affordable energy to support its growing data center industry and the environmental and public health concerns of local residents. As Arizona grapples with these competing priorities, the outcome of Project Baccara could set an important precedent for how future data center and power projects are evaluated and approved.