The Sierra Club’s latest environmental report card finds Arizona’s elected leaders have taken steps that, in the organization’s view, divert attention and resources away from cleaner forms of energy — most notably solar power — even as lawmakers publicly endorse an “all-of-the-above” approach to the state’s energy mix. The report, released this summer, singles out a string of legislative proposals and enacted measures that the club says amount to a retreat from renewables and a loosening of protections for scarce water supplies. Sandy Bahr, director of the Grand Canyon/Arizona chapter of the Sierra Club, told reporters that the session produced “more bills this session to erect impediments to solar and wind, to even declare that they were a nuisance.” Bahr’s comments underscore the group’s contention that policy choices this year tilted away from the priorities typically associated with reducing emissions and bolstering climate resilience.
Lawmakers framed much of the debate as balancing growth and resource constraints with economic development. During the recent session, the Legislature approved a three-year moratorium on new data centers that is set to begin on July 1, citing concerns about the power and water such facilities use. Supporters of the moratorium argued the pause was necessary to assess infrastructure impacts, while opponents warned it could chill investment and jobs. Meanwhile, other bills advanced in committee or were introduced that environmental advocates say would have substantially weakened groundwater protections across the state. Bahr described some proposals as directly threatening rural communities, saying, “They had bills to specifically harm rural Arizona and make it easier for a hedge fund to import water into the Phoenix area from small communities in La Paz County.” That allegation highlights the tension between urban demand for water and the vulnerability of small, rural groundwater-dependent towns.
A desert river winds through an Arizona canyon, illustrating the arid landscapes and water-stress factors referenced in the state's environmental report card.
Heat and water scarcity are central elements of the report’s criticism. Arizona routinely endures prolonged stretches of very high temperatures, putting those without shelter and other vulnerable residents at especially high risk. The state’s most populous region has experienced brutal heat waves this summer: the Phoenix metro area registered a high of 118 degrees Fahrenheit one recent day, and endured a string of days with maximums of 115 degrees or higher. Those extremes have prompted local officials to expand heat mitigation strategies, and leaders in Phoenix have sought additional federal funding to enlarge those efforts. The Sierra Club’s assessment ties these climatic realities directly to the need for cleaner energy and stronger water safeguards, arguing that policy choices made during the session do not align with the need to reduce the risks posed by warming and dwindling water supplies.
At the same time, the Legislature rejected proposals that would have removed state tax incentives for solar investments. Environmental advocates took that outcome as a partial victory, especially in light of parallel developments at the federal level. The Trump administration’s budget this year eliminated some federal incentives for renewable energy, and Bahr said she was heartened that the state did not follow suit by stripping its own incentives. She warned that the combined effect of losing both federal and state incentives would have been severe for solar deployment, saying the pairing of both moves would have been a damaging “one-two punch.” The decision to maintain state-level incentives, advocates argue, leaves some policy tools intact to encourage continued private-sector investment in rooftop and utility-scale solar projects.
Lawmakers’ stated preference for an all-of-the-above energy strategy informed much of the debate surrounding renewables, fossil fuels and other generation sources. Proponents of that approach say it aims to preserve reliability and affordability while transitioning the grid, but critics contend it can be used to justify continued support for carbon-intensive generation and to slow the adoption of clean technologies. The Sierra Club’s report frames recent legislative activity in that context, documenting a pattern of introduced measures that environmental advocates say were designed to erect new barriers to wind and solar development. Bahr’s organization lays out those concerns in the broader context of a state that is already confronting frequent heat extremes and mounting competition for limited water resources.
Water policy featured prominently in the report and in advocacy throughout the session. Beyond the dispute over groundwater protections, the data center moratorium brought water use into sharper focus, with lawmakers citing potential strains on both power and water systems as a reason to pause rapid expansion. The moratorium is temporary, lasting three years, but it signals lawmakers’ recognition that data-intensive industries can present significant demands on utility systems. Even so, environmentalists remain critical of other bills and proposals they say would open the door to transferring water out of small rural communities to larger urban areas or commercial interests. Those debates underscore a longstanding friction in Arizona: how to reconcile urban growth and economic development with the sustainability of rural water sources and the rights of smaller communities that depend on local aquifers.
Silhouette of a visitor overlooking a large Arizona dam and reservoir, highlighting water-resource infrastructure as the state lags peers on environmental metrics.
The Sierra Club’s environmental report card arrives as advocates and policymakers continue to jockey over the state’s path forward on energy and water policy. Organizers who pushed legislation to protect groundwater and expand renewable energy argued that stronger protections and incentives would make Arizona more resilient to heat waves and reduce long-term dependency on imported water and fossil fuels. Opponents of some of those measures cautioned about unintended economic consequences and the need to maintain reliability in the power sector. The session’s mix of enacted measures, rejected bills and still-pending proposals leaves an uneven picture, one the Sierra Club has characterized as a setback for clean-energy progress and for safeguarding Arizona’s water future. Sandy Bahr, in her role as chapter director, has been a prominent voice calling attention to what the organization sees as legislative decisions that will complicate the state’s ability to adapt to higher temperatures and tighter water supplies.
The environmental report card frames these developments as part of a broader policy landscape in which federal and state actions interact. With federal incentives for renewables reduced in the recent budget and with state legislators opting to retain existing tax incentives for solar, the outcome is a mixed policy environment for clean-energy deployment. The Sierra Club’s critique emphasizes the cumulative effect of bills introduced this year, the moratorium on data centers set to begin July 1, and the attempts to alter groundwater protections as elements that together paint a portrait of a state at odds with the urgency many climate and water experts say is needed. Advocates and lawmakers will likely continue to debate these issues in coming sessions as Arizona grapples with sustained heat, growing demand for water, and the economic pressures that shape energy and land-use decisions.
The Sierra Club's 2026 Environmental Report Card awarded Governor Katie Hobbs an A for vetoing harmful energy, water, and wildlife bills, an improvement from prior years, with most Democrats earning top grades while all Republicans failed. The group noted that while many problematic proposals died, stronger proactive measures are still needed on renewables and groundwater protection. (Source: Sierra Club Arizona blog and State Affairs report)
The three‑year pause on data center tax breaks was written into the FY2027 budget as House Bill 4168 and signed by Gov. Katie Hobbs on June 13, 2026; the law suspends the Arizona Commerce Authority from accepting new applications for the computer data center sales‑tax exemption from July 1, 2026 through June 30, 2029 and does not prohibit data‑center construction. In the two weeks before the moratorium took effect the Commerce Authority reported receiving 113 new exemption applications—nearly matching the total number of requests filed since the program began in 2013—and said projects submitted before July 1 may still be eligible for review under the old rules.
Several specific bills this session targeted Arizona’s assured‑water‑supply framework: HB 2026 would change how the Arizona Department of Water Resources considers commingled supplies when evaluating certificates of assured water supply, HB 2094 would require ADWR to accept certain older groundwater models when re‑reviewing some applications (potentially validating earlier determinations), and HB 2100 would have given counties expanded authority over small subdivisions that critics said could skirt assured‑water‑supply requirements. ADWR’s legislative updates also noted a $100,000 appropriation tied to HB 2094 to support the department’s review of those applications.