Energy and Eminent Domain Under Consideration in the Legislature

By Gordon Hopkins A bill currently under consideration in the Nebraska Legislature addresses the government’s ability to use eminent domain to acquire property for the state’s increasing power needs resulting from AI (artificial intelligence and data centers).Eminent domain is the government's power to seize private property for such public uses as roads, schools and utilities. According to the U.S. Constitution also stipulate private property will not be taken “without just compensation.”The advent of AI (artificial intelligence) has dramatically increased the demand for data centers. Nebraska has become a key data center hub. Companies operating facilities in the state include Google, Meta and First National Technology Solutions. It is seen by some as a potential financial boon. However, data centers and AI also increase demand for power and water for cooling and some people worry about the drain on resources. Senator Barry DeKay (District 40) introduced LB1261 on behalf of Governor Jim Pillen. Under the bill, Nebraska’s public power utilities could not use eminent domain to acquire privately owned power plants built to serve some large-scale electricity users, such as data centers. The exemption would apply only to facilities that provide electric service to industrial customers at a single site, with an electric load greater than 1,000 megawatts.Nebraska is the only U.S. state where electric utilities are consumer-owned, not-for-profit entities, rather than for-profit, investor-owned companies. The only exemptions are for some renewable energy facilities. Currently, Nebraska law allows public power districts to use eminent domain to take over private power generators. In the bill’s statement of intent, Senator DeKay notes, “The entire nation is facing unprecedented growth in the demand for electricity led in part by extremely large new loads associated with hyperscale data centers. The unprecedented demand for new generation resources and related infrastructure has significantly constrained the global supply chain for new generation and other necessary equipment. In order to help alleviate this near-term supply chain challenge, it is the intent of this legislation to allow public power utilities to limit their power of eminent domain and collaborate with privately owned generators who may have earlier access to such generators and related equipment to help meet Nebraska’s growing electricity needs.” Governor Pillen discussed the bill during his State-of-the-State address on January 15.“Our unique, only-in-Nebraska public power system has built the most affordable and reliable grid in America, but we need to keep it that way,” said Pillen. “One major way is to remove the red tape and obstacles for large power users—like artificial intelligence, aviation fuel, or bioeconomy plants—to build their own power plant and sell excess electricity onto the grid.”The Natural Resources Committee heard testimony at a hearing on Thursday, February 5, 2026. While its supporters, not everyone wants to see the bill pass. Ken Winston, a Nebraska-based attorney, spoke on behalf of the Nebraska Chapter of the Sierra Club, who expressed concern that data centers and the power plants needed to operate them could strain the state’s water resources, as well as drive up electricity prices. Similar concerns were raised here in Jefferson County, when county commissioners held a public hearing to discuss zoning regulations.One speaker, Brandon Pohlmann, made clear his opposition to data centers in the ag district.“My first thing is data centers. That's a permitted use in the plans. Now, my big thing with data centers, crypto farms, they put an extreme strain on the electric grid, and it's a waste of water,” said Pohlmann. “So, I would like to see data centers, crypto farms outlawed in Jefferson County. Just from a resource standpoint, they benefit nobody but Mark Zuckerberg, Elon Musk, and it's going in the long term, if they use that much water, it's going to hurt the agriculture in this county, and that's the base of our economy.”

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