Nebraska's new regulations: infrastructure protection or a disguised lockdown?

Author: Colin Crossman, Bitcoin Magazine; Translated by: Wu Zhu, Golden Finance

Nebraska lawmakers have just passed Legislative Bill 526 (LB526). Although the bill does not explicitly oppose Bitcoin, its impact may not be neutral. The state legislature passed the bill with a unanimous vote of 49 to 0 and sent it to Governor Jim Pillen, who is expected to sign it into law. Supporters describe it as a commonsense infrastructure bill, while Bitcoin miners call it a slow retreat that is brewing.

The paper data for LB526 is aimed at large energy users. However, in reality, it is specifically targeted at Bitcoin mining facilities whose electricity load reaches or exceeds 1 megawatt (MW), imposing multiple operational restrictions, which are more punitive than policy.

Cost Transfer, Public Humiliation, and Power Restrictions

The core of LB526 is a mandatory provision: miners must bear the costs of any infrastructure upgrades necessary to meet their needs. Utility companies have the right to request direct payment or letter of credit payment after conducting a "load study." While the bill verbally emphasizes "fairness" and non-discrimination, its target audience is obvious. Bitcoin miners are the only industry specifically named.

In addition, mining operators must notify utility companies in advance, comply with their interconnection requirements, and critically, must accept interruptible service. This means that when the power grid is under stress, miners will be the first to experience power outages. Voluntary demand response, a hallmark of bitcoin mining's grid-friendly posture? Will be replaced by forced power limitations and utility companies' unilateral decisions.

The most important thing is: disclose energy consumption publicly. Utility companies must disclose the annual energy usage for each mining operation. Other data-intensive industries do not have such requirements—cloud computing does not, artificial intelligence clusters do not, and Amazon data centers do not. Only the Bitcoin industry does. This is not just monitoring, but also sending a signal.

Uncollected Taxes and Remaining Costs

It is commendable that the legislative body has abandoned a previous provision that originally intended to impose a tax of 2.5 cents per kilowatt-hour on the mining industry. This punitive tax would have been an additional 50% on the typical industrial tax rate. This tax would have been seen as a public declaration of hostility. Its cancellation is necessary, but not sufficient.

Because what remains in the LB526 bill is a less noticeable but equally powerful deterrent: uncertainty. The profits in the mining industry are already very thin, and they seek jurisdictions where electricity costs are predictable and regulations are clear. However, Nebraska offers infrastructure tolls, discretionary power limits, and regulatory focus.

Market Reaction: Warnings from the Mining Industry

Industry leaders have not remained silent. Marathon Digital Holdings, one of the largest publicly traded mining companies, testified that it has invested nearly $200 million in Nebraska and paid over $6.5 million in taxes. The company warned that if the LB526 bill is passed, further expansion could be canceled.

The message they conveyed is very clear: Nebraska has always been a jurisdiction that supports mining development and economic growth. However, the LB526 bill sends a signal that miners are not welcome, or at best, are second-class citizens in the energy economy. As an executive said, "If the same rules do not apply to other energy-intensive industries, then this is not about infrastructure, but about discrimination."

Others have warned that forced power restrictions will replace cooperative grid services with coercion. Bitcoin miners can and do provide real-time load shedding services to stabilize the grid during peak demand. However, this value proposition is only effective when market signals are present. The LB526 bill has turned it into a burden.

Politics, Electricity and Public Utilities

The bill's sponsor, Senator Mike Jacobson, insists that LB526 is not related to Bitcoin. "This is about electricity," he stated. However, this is difficult to reconcile with a bill aimed specifically at a single user group.

Jacobson uses Kearney as an example, where half of the city's electricity flows to a mining operation. However, the legislature did not see this as an opportunity, as a dispatchable industrial customer willing to scale up or down based on grid demand, but instead chose to avoid risks and focus on centralized planning.

In Nebraska's public power model, this is crucial. Since all utilities are publicly owned, the state's regulatory stance is not advisory but a matter of life and death. There is no retail competition here. If Nebraska's power department begins to view Bitcoin miners as unreliable "free riders" rather than voluntary partners, then the miners will have no choice but to exit.

Currently, the LB526 bill is just awaiting the governor's signature. Given that LB526 was proposed at the governor's request, it is likely to be signed. Once enacted, it will take effect on October 1, 2025. Before that, miners must make a decision: adapt, migrate, or give up.

States like Texas, Wyoming, and North Dakota have taken the opposite direction, offering tax clarity, grid integration, and legal protection. Nebraska used to be at the forefront, but it may gradually fade from people's attention.

Bitcoin mining does not require charity, but it does require equal status. LB526 imposes costs, limits flexibility, and raises skepticism. If the goal is to balance innovation with infrastructure, then the execution is vastly different.

Because when one industry is heavily burdened while others are exempt from burdens, when voluntary cooperation is forcibly replaced, and when operational data is publicly disclosed for no reason, it is not hard to understand why miners believe LB526 is not regulation, but revenge.