In 2021, across much of the country, Winter Storm Uri caused utilities to scramble for power as the use of electricity and natural gas increased. In addition to facing transmission constraints, utilities couldn’t generate enough power due to issues with fuel supply and equipment malfunctions. In Nebraska, in an effort to preserve the grid and prevent a system-wide failure, the Omaha Public Power District, or OPPD, conducted rolling blackouts. Afterward, the Southwest Power Pool, which manages the region’s grid reliability, required its members to keep more power capacity in reserve in case of future emergency situations. In the following years, the data center boom, electrification, and growth from other industries have brought utilities around the country the promise of new customers and the challenge of a huge spike in demand. As a result, OPPD, which serves about 419,000 customers across eastern Nebraska, is running low on the amount of energy capacity it can promise to new and expanding economic development projects. The shortage is threatening the region’s ability to develop economically, attract companies, add jobs, and grow. What’s more, OPPD is facing the same challenges that are plaguing utilities and electric grids across the country: Power plants and other electric grid infrastructure are aging. Demand for energy is still growing. Climate change is straining the grid in real time. All the while, communities in Nebraska oppose the renewable energy developments that could solve some of these issues. OPPD currently projects it has less than 100 megawatts of available power capacity for new or expanding large customers for the next few years. (For reference, a large data center could require as much as 1,000 megawatts of capacity, and manufacturing facilities can range from a few megawatts to over 100 megawatts.) That figure could vary depending on customer commitments and new energy generation coming online, and OPPD asserted that the utility has enough power capacity to support typical residential and commercial growth. But essentially, OPPD president and CEO Javier Fernandez said, any new or expanding development requiring 2 megawatts or more might have to wait to receive service. Fernandez will be leaving the utility at the end of the year, according to a recent internal announcement. Economic development leaders are concerned that if power capacity in Nebraska’s largest metropolitan area remains limited, the Omaha area and the state as a whole will be put at a competitive disadvantage for growth opportunities like new businesses, jobs, and increased tax revenue. This comes as the state is projected to face a $208 million deficit next year. Compared to 2022, state income tax revenues this past year were $703 million lower. ‘We are bending over backwards. We’re trying to figure out creative solutions,’ Fernandez told Grist. ‘How do we bridge this? Can we buy capacity from other utilities? Literally, no one has excess capacity. Everyone is in the same boat as we are, so now the pinch, so to speak, it’s, well, growth has to slow down, maybe?’ At the same time, OPPD is doing long-term planning to determine what its energy and system needs will be over the next 10 years. To meet the demand, the utility and its board face a decision about how much to expand OPPD’s energy portfolio. On the low end, the utility could add about 1,000 megawatts, but, according to OPPD’s initial planning results, the utility might more than double its portfolio. For context, OPPD’s portfolio currently contains 4,583 megawatts of energy capacity And while more generation capacity is coming online over the next few years, the projections for energy demand remain high. Companies with nearly 2,000 megawatts of economic development projects are planning to come to the area and are actively in OPPD’s queue through 2031, according to a September presentation. There are about 5,000 megawatts worth of other potential projects on the radar that are considering the area. Fernandez said the utility knows that not all of the projects will actually come to fruition. Nevertheless, if the utility builds too small, the Omaha metro could end up back in the same shortage for economic development. If the utility builds too big and the usage from big customers doesn’t materialize, OPPD’s ratepayers will likely have to eat the costs. Read Next Exclusive: Most voters believe climate change threatens the American Dream Kate Yoder Nailing the projections and actually building new generation — such as renewable energy and natural gas sources — will be a big challenge. 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 how much energy the region will need. OPPD declined to comment on what portion of its queue is made up of data centers, manufacturers, or other types of customers. According to a presentation in March, a chart of the utility’s current peak demand shows industrial customers represent 32 percent, residential customers make up 41 percent, and commercial customers are 27 percent. By 2035, industrial customers are expected to make up 52 percent.’Clearly, data centers have been a very, very big force on that increase,’ Fernandez said. ‘The biggest question my board is likely going to have to answer is going to be how big of a plan we approve,’ Fernandez said. ‘And that is going to be informed by… state, counties, cities, chambers: How much do you want us to grow?’ In September, Heath Mello, the Greater Omaha Chamber’s president and CEO, sent a letter to OPPD’s board calling for the utility to plan farther out than 2036 and strongly consider building for more growth. Paul West, chair of the chamber’s board, said that the chamber hopes to recruit and expand industries like manufacturing.Economic development could help solve big problems – the state’s budget shortfall, high property taxes, and brain drain. But energy is one of the top two reasons that the chamber loses deals to other locations. And any new manufacturing will have to compete for power with potential data center customers considering the region. This matches a trend being seen across the U.S., said Larry Gigerich, chair of the Site Selectors Guild. Utilities like OPPD have an obligation to serve all customers, but state and local governments can incentivize and disincentivize for the kind of growth they want to see, Fernandez said. The competition for electricity with data centers is ‘causing manufacturing companies now to be more proactive and to use their voice more directly with utilities versus the way they have done it for decades,’ Gigerich said. ‘Now it’s a true competition, and we can’t generate enough new power fast enough to meet everybody’s needs.’ Projecting demand is one thing. Getting electricity-generating projects built is quite another. To meet the growing demand and to keep costs low, OPPD is looking at building more natural gas and renewables. Both of these options come with their own challenges. The current popularity of natural gas has constrained the equipment supply chain, which means it could take the utility much longer to build. And while renewables face some up-front cost increases, they remain the lowest cost energy source to operate. However, OPPD has struggled to bring these projects online, because some communities in the state have turned them away. The tension has been building for years as misinformation has spread and projects were kept secret by developers. Residents across the state have rejected clean-energy proposals over concerns about fire risks and potential damages to prime agricultural land and local infrastructure. Fernandez said that some community leaders have rejected renewable generation only to ask for more power capacity to attract new economic development. ‘Everyone is saying no, and then we end up in a really bad place,’ he said.With the demand for power growing, something has to give, otherwise OPPD might not be able to generate the power it needs to help Nebraska grow. ‘If Omaha doesn’t grow, if Omaha doesn’t prosper, the rest of the state very likely won’t,’ Fernandez said. ‘What the state wants versus what the city wants versus what the chambers want — well, they all want different things. But the one common denominator that I keep hearing is jobs and income.’ This story was originally published by Grist with the headline As Nebraska seeks to grow, Omaha’s energy capacity is a major hurdle on Nov 4, 2026.