Nebraskans, like many Americans, are dealing with rising demand and prices for electricity.
In 2018, data centers used 1% of the electricity sold by the utility. In 2024, they used 21% And by 2035, data centers are projected to account for 41% of OPPD’s electricity sales.
That’s not the only factor driving increased demand, according to OPPD Chief Financial Officer Brad Underwood.
“You have school systems expanding. You have medical facilities expanding. You have other box store growth. On the larger commercial side of things, you have communities and towns that are growing, whether it be Bennington or Gretna or other towns that are growing in our Greater Omaha area. And so we’re really trying to make sure we rise to the demand of the totality of the customer growth,” he said.
Rising to that demand has involved building generators capable of producing 450 megawatts at Turtle Creek generating station in Sarpy County, with another 225 megawatts on the way, and another 675 megawatts in Cass County. And Lincoln Electric System is planning on installing another 100 megawatts of generating capacity in that city.
All that activity, at a cost of billions of dollars, corresponds with a period of increasing electrical rates. After holding retail prices steady for 11 years, NPPD increased rates by 2% for 2025, and will increase them by another 3% next year. Lincoln Electric System went for five years with no increase until 2023, but since then has increased rates more than 15%. And OPPD, after holding rates steady for five years, will have seen around a 20% retail rate increase since 2021.
But OPPD’s Underwood denied that data centers’ skyrocketing demand for power is driving up residential rates.
“The cost of service is a methodical process that we use, that others in the industry use, to make sure that cost-causers are cost- payers, and we get the right cost recovery from the right customer,” he said.
Underwood listed other factors behind the residential increases.
“We’re offering residential customers service improvements. We’re burying overhead customer lines. We’re building out substations to ensure new communities are growing. We’re trimming more trees. We have a new outage map. We’re hardening infrastructure. All of those things are part of our cost to serve,” he said.
While OPPD’s residential rates are going up 6% next year, industrial rates are going up 8.9%.
Similarly, Lincoln Electric System’s Vice President for Power Supply, Jason Fortik, pointed to factors other than data centers as contributing to the need for increased generation and rate increases.
LES’ demand historically grew at about .4% per year, he said. But with the addition of large loads like a Google data center on the north edge of town, that’s going up to 2.7% per year.
But Fortik said winter storm Uri in 2021, which cut off power to millions in Texas and caused blackouts in Nebraska, led to increased reserve requirements for utilities’ generating capacity. Fortik saids that outweighs increasing demand for power:
“Far and away, the bigger impact came from our generators getting a lower rating. That’s really the driver for us on why we’re needing to add generation and do some things to improve the performance of our existing generation,” he said.
Fortik said that reserve requirement was largely responsible for 2025’s mid-year rate increase of 4%. He said next year’s 3% rate increase is due to more run-of-the-mill factors like inflation.
Despite these pressures, Nebraska electric rates remain well below the national average. Nebraska rates averaged just over 10 cents per kilowatt hour for all sectors in September, compared to 14 cents nationally, according to the U.S. Energy Information Administration.
In some states, rapidly rising electricity prices have produced political backlash, and are seen as important factors in election results in New Jersey, Virginia, and Georgia elections last November. But NPPD’s Kent said he expects price increases will be more muted in Nebraska.
“We will see increased costs as we move into the future. Again, it’s kind of the difference in timing a little bit there, but I believe it will be to a lesser extent than what you’re seeing nationally,” he said.
The accuracy of that prediction will be seen in the years ahead.