New Nebraska regulations: infrastructure security or disguised house arrest?

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

Nebraska lawmakers have just passed Legislative Act No. 526 (LB526), ​​and while the bill does not explicitly oppose Bitcoin, its impact may not be neutral. The state legislature passed the bill with a 49-0 vote and sent it to Gov. Jim Pillen, where it is expected to be signed into law. Supporters call it a common sense infrastructure bill. Bitcoin miners, on the other hand, called it a brewing slow withdrawal.

The paper data of LB526 is targeted at large energy users. But in reality, it specifically targets Bitcoin mining facilities with power loads of 1 megawatt (MW) and imposes layered operational restrictions on it that are more like punishment than policy.

Cost transfer, public humiliation and power limit

At the heart of LB526 is a mandatory provision: miners must bear any infrastructure upgrade costs required to meet their needs. After conducting a “load study”, utility companies have the right to request direct payment or letter of credit payment. Although the bill emphasizes "fairness" and non- discrimination verbally, its target targets are obvious. Bitcoin miners are the only industry to be named.

In addition, mining operators must inform the utility in advance to comply with their interconnectivity requirements and, crucially, to accept interruptible services. This means that when the grid is tight, miners will first lose power. Voluntary demand response, a sign of a friendly attitude of Bitcoin mining power grid? Will be replaced by forced power restrictions and utility companies at their sole discretion.

The most important thing is: publicly disclose energy consumption. Utilities must publish annual energy use for each mining operation. Other data-intensive industries do not have such requirements—no cloud computing, no artificial intelligence clusters, and no Amazon data centers. Only the Bitcoin industry does not. This is not just monitoring, but also signal transmission.

Uncollected taxes and residual costs

To its credit, the Legislature has abandoned a previous clause that originally intended to impose a tax of 2.5 cents per kilowatt-hour on the mining industry. This punitive tax would add 50% to a typical industrial tax rate. This tax will be considered a public statement of hostility. Cancelling it is necessary, but not enough.

Because what remains in the LB526 Act is a less conspicuous but equally powerful deterrent: uncertainty. The mining industry has already made very meager profits and they seek jurisdictions with predictable electricity costs and clear rules. However, Nebraska offers infrastructure tolls, discretionary power restrictions and regulatory priorities.

Market reaction: warning from mining industry

Industry leaders did not remain silent. Marathon Digital Holdings, one of the largest listed mining companies, testified that it has invested nearly $200 million in Nebraska and paid more than $6.5 million in taxes. The company warned that further expansion could be cancelled if the LB526 bill was passed.

The message they conveyed was clear: Nebraska has always been a jurisdiction that supports mining development and economic growth. But the LB526 bill sends a signal: miners are unpopular, or at best, second-class citizens in the energy economy. As one executive said: “If the same rules do not apply to other energy-intensive industries, it’s not about infrastructure, it’s about discrimination.”

Others warned that forced power restrictions would replace cooperative grid services with coercion. Bitcoin miners can and do provide real-time load reduction services to stabilize the grid during peak demand. But this value proposition is only valid when market signals appear. The LB526 Act turns it into a burden.

Politics, electricity and public utilities

Senator Mike Jacobson, the sponsor of the bill, insisted that the LB526 bill had nothing to do with Bitcoin. “It’s about electricity,” he said. But this is hard to match a bill that targets a single user group accurately.

Jacobson takes Kearney as an example, where half of the city's electricity goes to a mine. But the legislature did not see it as an opportunity, that is, a dispatchable industrial customer is willing to scale up or down based on grid demand, but instead chose to avoid risks and centralize planning.

And in Nebraska's public power model, this is crucial. Since all utilities are publicly owned, the state government’s regulatory stance is not advisory, but rather life and death. There is no retail competition here. If Nebraska's power department starts to see Bitcoin miners as unreliable "free riders" rather than volunteer partners, miners will have no choice but to quit.

Currently, the LB526 bill is only awaiting the signing of the governor. Given that LB526 was proposed at the request of the Governor, it is likely to be signed. Once enacted, it will come into effect on October 1, 2025. Before that, miners must make a decision: adapt, migrate or give up.

Texas, Wyoming and North Dakota have taken the opposite direction, providing tax clarity, grid integration and legal protection. Nebraska once ranked among the top, but it may fade out of sight now.

Bitcoin mining does not require alms, but it does require equal status. LB526 imposes costs, limits flexibility, and raises suspicion. If the goal is to balance innovation with infrastructure, then implementation is very different.

Because when one industry is burdened while others are free from burdens, when voluntary cooperation is forced to be replaced, and when operating data is made public for no reason, it is not difficult to understand why miners think that LB526 is not regulation, but revenge.