Nebraska’s new rules: infrastructure protection or a disguised soft ban?

Author: Colin Crossman, Bitcoin Magazine; Compiler: Wuzhu, Golden Finance

Nebraska lawmakers just passed Legislative Bill 526 (LB526), ​​and while the bill isn’t explicitly anti-Bitcoin, its impact may not be neutral. The state legislature passed the bill in a unanimous 49-0 vote, sending it to Governor Jim Pillen, where it’s expected to be signed into law. Supporters call it a common-sense infrastructure bill. Bitcoin miners call it a slow exit in the making.

On paper, LB526 is aimed at large energy users. But in reality, it specifically targets Bitcoin mining facilities with a power load of 1 megawatt (MW) or more, and imposes layers of operating restrictions that read more like punishment than policy.

Cost Shifting, Public Shaming, and Brownouts

At its core, LB526 is a mandate: miners must bear the cost of any infrastructure upgrades needed to meet their needs. Utilities are empowered to demand direct payments or letters of credit after conducting “load studies.” While the bill pays lip service to “fairness” and nondiscrimination, its target audience is clear. Bitcoin miners are the only industry named.

In addition, mining operators must notify utilities in advance, comply with their interconnection requirements, and, crucially, accept interruptible service. This means that when the grid is strained, miners will be the first to go offline. Voluntary demand response, the hallmark of Bitcoin mining’s grid-friendly posture? Will be replaced by mandatory brownouts and discretion by utilities.

The most critical: public disclosure of energy consumption. Utilities must publish annual energy usage for every mining operation. No other data-intensive industry has such a requirement—not cloud computing, not AI clusters, not Amazon data centers. Only the Bitcoin industry doesn’t. This isn’t just surveillance, it’s signaling.

Taxes not collected, and costs left behind

To its credit, the Legislature abandoned a previous provision that would have levied a 2.5-cent per kilowatt-hour tax on mining. This punitive levy would have tacked 50 percent on typical industrial rates. The tax would have been seen as an openly hostile statement. Removing it is necessary, but not sufficient.

Because what remains in LB526 is a less visible but equally powerful deterrent: uncertainty. The mining industry, whose margins are already razor-thin, seeks jurisdictions where electricity costs are predictable and rules are clear. Yet Nebraska offers infrastructure tolls, discretionary curtailments, and a regulatory focus.

Market reaction: A warning from the mining industry

Industry leaders are not staying silent. Marathon Digital Holdings, one of the largest publicly traded 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 canceled if LB526 passes.

The message is clear: Nebraska has always been a pro-mining, pro-growth jurisdiction. But LB526 sends a signal that miners are unwelcome, or at best second-class citizens in the energy economy. As one executive put it, “If the same rules don’t apply to other energy-intensive industries, then this isn’t about infrastructure, it’s about discrimination.”

Others warn that mandatory curtailments replace cooperative grid services with coercion. Bitcoin miners can and do provide real-time load shedding services, stabilizing the grid during peak demand. But that value proposition only works when market signals are there. LB526 turns it into a burden.

Politics, Power, and Utilities

Senator Mike Jacobson, the bill’s sponsor, insists that LB526 isn’t about Bitcoin. “This is about electricity,” he said. But that’s hard to square with a bill that zeroes in on a single group of users.

Jacobson points to the example of Kearney, where half of the city’s electricity goes to a single mine. But rather than seeing it as an opportunity, a dispatchable industrial customer willing to scale up or down based on grid needs, the legislature opted for risk aversion and centralized planning.

And in Nebraska’s public power model, that’s critical. Since all utilities are publicly owned, the state’s regulatory stance is not advisory but existential. There is no retail competition here. If Nebraska’s electric utilities start treating Bitcoin miners as unreliable “free riders” rather than willing partners, miners will have no choice but to exit.

For now, LB526 is just waiting for the governor’s signature. Given that LB526 was requested by the governor, it is likely to be signed. Once enacted, it will take effect on October 1, 2025. Before then, miners must decide: adapt, relocate, or give up.

States such as Texas, Wyoming, and North Dakota have gone in the opposite direction, offering tax clarity, grid integration, and legal protections. Nebraska, once at the top of the list, may now fade into the background.

Bitcoin mining doesn’t need handouts, but it does need equal footing. LB526 imposes costs, limits flexibility, and breeds skepticism. If the goal is to balance innovation with infrastructure, the execution is very different.

Because when one industry is burdened while others are exempted, when voluntary cooperation is replaced by mandatory requirements, and when operational data is made public for no reason, it is easy to understand why miners see LB526 not as regulation, but as retaliation.