Data centers are eyeing Nebraska. Here’s how counties are responding

Gage County constituents lined the walls of a packed courtroom in Beatrice, spilling over into the neighboring room on June 16. They sat through a four-hour Planning Commission meeting as they waited for a decision on a moratorium on data centers.

“I’m going to ask the room, how many are for the moratorium?” Janice Jacobsen of Adams asked. Just about everyone in the audience raised their hands. “Okay, so these people are needing those assurances that safety is going to be addressed.”

Attendees who spoke were worried about the environmental impacts of data centers – and the water and electricity needed to supply them.

“The people that are putting the data centers in, they don't really care about Gage County,” Wanda Garrett of Beatrice said. “They don't care what happens to Gage County. They don't care about the water, the environment or the people that live here. Their whole purpose is to make money so that they get wealthier, not Gage County.”

The only individual who spoke in opposition to the moratorium was Eli Waring, an associate developer at Tenaska, an Omaha-based energy company.

“We’ve seen other counties stay away from implementing moratoriums, even short term,” Waring said at the hearing. “You’ve heard about this from the potential signal it can send to the business community that you’re not interested in this type of development.”

The Planning Commission unanimously recommended an 18-month moratorium on data centers, which will go before the county's Board of Supervisors for consideration.

Gage County isn’t alone in working to delay or curb data center development. Garfield County is also in the process of adding a moratorium. Both counties await future votes to confirm their moratoriums.

Eleven other counties across the state already have moratoriums in place: Butler, Box Butte, Custer, Dundy, Furnas, Hayes, Harlan, Johnson, Kearney, Otoe and, most recently, Seward. Four more counties are considering moratoriums as placeholders until they can draft data center specific regulations.

The surge of moratoriums comes at a time when many Nebraska counties are revising their comprehensive plans and zoning regulations.

Nebraska Public Media News reached out to all 93 Nebraska counties, asking about current and future data center regulations. Of those that responded, 27 counties either recently updated their comprehensive zoning plans, are about to update their regulations or are in the process of doing so.

While some of these counties aren’t naming data centers as the catalyst for these revisions, they're taking them into consideration.

Cody Fenwick, Keith County’s zoning administrator, said it would be irresponsible to not plan for data centers in the county’s new comprehensive plan.

“Things are happening really fast,” Fenwick said. “We can’t keep them out. You cannot stop a legal activity, but you can regulate it.”

The surge in counties taking a look at their zoning regulations aligns with prominent legislation from this past session. LB1261, which was championed by Gov. Jim Pillen and passed in the most recent legislative session, creates a framework for private power developers to come into Nebraska and build.

The bill creates an exception to public power districts’ ability to take over generating facilities using eminent domain. The exception allows private companies to develop generating capacity on site for industrial customers, including data centers, needing more than 1,000 megawatts of power.

Supporters of the bill say it ensures large industrial customers pay the fees and upgrade costs for the project so the costs won’t be passed on to Nebraska customers.

Sen. Barry DeKay sponsored the bill on behalf of Pillen. He said his only condition was making sure that Nebraska’s public power districts were comfortable with the measure, so he brought the idea to legal counsels with public power, who then helped to draft the bill.

“It will keep public power ratepayers protected from having to build (energy) generation that they won’t be able to use, that they won’t benefit from,” DeKay said. “It puts all the financial onus on the private entity that’s building it, whether it be a data center or whoever. They will pay for the cost of construction. They will maintain the infrastructure.”

People who supported the bill, like Sen. Rita Sanders, said it is important because Nebraska needs data centers.

“Everything needs more energy,” Sanders said. “Look at hospitals, because they’re using robotics and probably AI. It doesn’t matter who is going to need to build it. If they identify that they’re going to need a lot more electricity, and they help build it, it’s a really good thing for the State of Nebraska.”

When asked about environmental concerns that have been raised at public meetings like the one in Gage County, Sanders said, as she understands it, most data centers use a closed-loop water system. This means that a data center would pull in a large amount of water and then recycle it for cooling.

“It's not like you and I, when we take a shower, it's down the drain,” Sanders said.

Sen. Danielle Conrad of Lincoln spent hours filibustering LB1261. She and her colleagues attempted to amend the bill with safeguards, like ones that would require data centers to use those closed-loop systems. That amendment and others like it were struck down. LB1261 passed with a 33-16 vote.

“I think when a lot of my colleagues get out into the real world, they are going to have a really hard time explaining to their voters why they mortgaged their future and our environmental concerns to give big business another huge giveaway,” Conrad said.

LB1261 also comes with a five-year timeline. Developers have until 2031 to find land and sign contracts. Another bill, LB663, sets up a strict timeline for county boards to follow if they get a special or conditional use permit application, which are the permits typically used by data center developers. Residents in Gage County were concerned that between the two bills, the process is now being forced to move along too quickly.

“The Nebraska Legislature is pulling out all the stops to try and fast track approval to these major data centers,” Conrad said. “There's preferential tax treatment, a bunch of it. There's direct corporate welfare, a bunch of it. There's no labor standards. There's little, if any, environmental protection, and there's a significant lack of transparency.”

Some counties, though, want data centers. For example, Holt County in northeast Nebraska is eager for development opportunities. Marv Fritz, Holt’s planning and zoning administrator, said he’d be open to anything to help develop his county.

Holt County is an example of a county that doesn’t have any regulations, and a developer would just need a special use permit to get the process started.

For those counties without specific regulations for data centers, it’s up in the air whether they will permit data centers. Some counties, like Clay and Cuming, said any application would be denied. Others, like Brown and Johnson counties, would allow for data center development with a special use permit.

There are also 10 counties that don’t have either a zoning department or a planning commission. In those counties, it’s up to the cities and villages to regulate development, including any potential data centers.

To help aid counties through these new laws, the Nebraska Association of County officials started a working group to develop a land use permitting toolkit.