The Omaha Public Power District has less than 100 megawatts of available power capacity for new or expanding large customers over the next few years, a constraint that could threaten the region’s ability to develop economically, attract companies, add jobs, and grow.
Power capacity shortfall threatens growth
Large data centers can demand up to 1,000 megawatts, while most manufacturing projects need between a few megawatts and just over 100 megawatts, according to utility officials.
Javier Fernandez, president and CEO of the utility, said, “To give you an idea, some of the brand-new, big, very tall buildings in downtown, those are six to seven megawatts.”
Any development that requires two megawatts or more may face delays or cancellation, the district warned, because the existing grid can only support typical residential and commercial growth comfortably.
Economic development leaders fear that the capacity bottleneck will put Omaha at a competitive disadvantage, making it harder to attract new firms or expand existing ones.
Utility faces tough planning choices
OPPD’s long-range plan projects a need to add anywhere from 1,000 to more than 2,000 megawatts by 2036, depending on how much demand from data centers and manufacturers materializes.
If the utility builds too little, future projects could stall; if it builds too much, ratepayers may bear the cost of unused capacity.
In practice, businesses looking to locate in Omaha will have to factor in the risk of delayed power hookups, which could increase upfront costs and push them toward competing regions with more reliable supply.
Two OPPD board members said it would be helpful if state and local leaders were on the same page with clear economic development plans to guide priorities for energy.
Across the nation, aging power plants and rising construction costs are slowing new generation projects, a trend that compounds OPPD’s challenges.
Recent extreme weather, such as the 2021 winter storm that forced regional blackouts, prompted the Southwest Power Pool to tighten reserve requirements, further eroding OPPD’s available capacity.
The utility currently has about 2,000 megawatts of projects in its development queue through 2031, with an additional 5,000 megawatts under consideration.
Kenneth Gillingham, a professor of environmental and energy economics at Yale University, noted that these initial numbers only make sense if you’re building for some hyperscale data centers. He asked, “Will all of those data centers be needed?”
OPPD’s latest presentation shows its portfolio at roughly 4,580 megawatts, meaning any new additions would represent a significant percentage increase.
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By 2035, industrial customers are expected to account for 52% of peak demand, up from the current 32% share.
Fernandez said, “Clearly, data centers have been a very, very big force on that increase.” He added, “We have a very strong manufacturing base here in Omaha. We serve Washington County, they have a very robust industrial community down there, and all the way over our region, they have experienced growth. Clearly not as big as these new data centers.”
Community resistance to new generation
Local leaders have repeatedly turned down proposals for wind and solar farms, citing concerns about fire hazards, health impacts, and effects on farmland.
County officials say those rejections have directly reduced the utility’s ability to add new capacity, forcing planners to look elsewhere for power sources.
Jon Cannon, executive director of the Nebraska Association of County Officials, explained that communities need time to evaluate long-term consequences before approving projects.
He noted that many residents fear changes to their surroundings and demand transparent information from developers.
State legislators are considering measures that would let counties negotiate community benefit agreements with energy developers, potentially easing opposition.
Such legislation could also raise the tax on renewable installations, providing additional revenue for local services.
Strategic options under consideration
Jeff Dennis, executive director of the Electricity Customer Alliance, warned that extending old coal assets would increase costs for consumers.
In response, the utility has joined a regional nuclear consortium exploring the possibility of new nuclear generation within the state.
Paul West, chair of the Greater Omaha Chamber board, said the chamber is pushing for diversified growth that does not rely solely on data centers.
He emphasized that manufacturing projects still represent a substantial portion of prospective economic development.
Larry Gigerich, chair of the Site Selectors Guild, observed that manufacturers are now actively engaging utilities to secure reliable power, a shift from previous passive approaches.
He explained that this heightened dialogue reflects the competition between data centers and traditional industry for limited electricity.
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