Part 4 of Understanding the Tax Impacts: Why Does Ownership Matter? Public vs. Private Utilities and Why It Affects Property Taxes
- Cass County Facts
- Aug 6
- 4 min read
In Part 1, we explained how property taxes are calculated.
In Part 2, we explored how homes, farmland, businesses, and industrial property are valued.
In Part 3, we looked at how billion-dollar facilities such as natural gas power plants and data centers are appraised.
Now we come to one of the most important—and often misunderstood—parts of this discussion:
Why does it matter whether a power plant is publicly owned or privately owned?
The answer has everything to do with how Nebraska's property tax system works.
Public Ownership vs. Private Ownership
Nebraska has a unique electric system. Unlike many states, nearly all retail electric service in Nebraska is provided by public power utilities.
Examples include:
Omaha Public Power District (OPPD)
Nebraska Public Power District (NPPD)
Lincoln Electric System (LES)
These organizations are publicly owned and operate differently than privately owned companies. A company such as Tenaska, on the other hand, is a privately owned energy developer. That distinction matters because public entities and private companies are treated differently under Nebraska law.
Public Power Plants
Many people are familiar with the OPPD generating stations located near Murray. These facilities are publicly owned. Public power districts are political subdivisions of the State of Nebraska and operate under a different legal and financial structure than private companies. Rather than being traditional for-profit corporations, public power districts exist to provide electric service to their customers.
Private Power Plants
A privately owned power plant is different. Instead of being owned by a public utility district, it is owned by a private company. That company owns the land. It owns the buildings. It owns the generating equipment.
Like other privately owned commercial and industrial property, those assets are generally subject to Nebraska's property tax system unless a specific exemption applies.
Why Is This Part of the Current Conversation?
Nebraska Legislative Bill 1261 created a legal framework that allows privately owned generating facilities to provide electricity directly to certain large private industrial users. Under the bill, excess electricity generated by those facilities may also be interconnected with and sold into the regional electric grid under applicable agreements and regulations.
Because this framework involves privately owned infrastructure rather than a traditional public power district, discussions naturally include questions about taxation.
That is why ownership has become such an important topic.
Why Ownership Can Affect Property Taxes
Let's use a simplified example. Imagine two identical facilities.
Both produce the same amount of electricity.
Both occupy the same amount of land.
Both use the same technology.
The primary difference is ownership.
One is owned by a public power district.
The other is owned by a private company.
Although the facilities may look nearly identical from the outside, their ownership structure can result in different tax treatment under Nebraska law.
That is why discussions surrounding privately owned generation often focus on potential additions to the county's taxable property base.
What About the Industrial Partner?
The same concept applies to a privately owned industrial facility. If a private company constructs a large industrial development—whether that is a manufacturing facility, processing plant, technology campus, or another industrial use—the buildings, improvements, and taxable equipment generally become part of the local property tax base unless specific exemptions apply.
Again, every project is different, and the final assessed value depends on the actual development.
What We Know Today
At this point, it's important to distinguish between current facts and future possibilities.
What we know:
What we do not know:
Whether a project will ultimately be built.
The final size or design of a future facility.
The identity of any industrial partner.
The final assessed value.
Any future agreements or incentives that could affect taxation.
Those details simply do not exist publicly today.
Why We're Explaining This
One question we've heard repeatedly is:
"Why are people talking about billions of dollars in taxable value?"
The answer isn't simply because a facility might be expensive to build. It's because ownership matters.
When a privately owned commercial or industrial facility is constructed, it generally becomes part of the taxable property base that local governments use when calculating property tax levies.
Understanding that concept is essential before discussing any estimates regarding future tax impacts.
What This Does Not Mean
This article is not saying:
Taxes will automatically go down.
Every privately owned project is beneficial.
Every privately owned project should be approved.
A specific project has been approved.
A specific project will be built.
Rather, this article explains one important concept:
Ownership affects how property is treated within Nebraska's property tax system.
That's an objective part of understanding how local government finance works.
Coming Next
Now that we've explained:
How property taxes work
How property is valued
How large industrial facilities are appraised
Why ownership matters
...we're finally ready to put all of those pieces together.
In Part 5, we'll explore:
We'll look at:
Cass County's current taxable valuation
How a large privately owned power plant could change that valuation
How a large industrial partner could further expand the tax base
Why economists often focus on taxable valuation rather than individual tax bills
This is where we'll begin using estimated values to illustrate how large industrial developments can affect the overall tax base.
Sources
This article is based on publicly available information from:
Nebraska Legislative Bill 1261
Nebraska Revised Statutes governing public power districts and property taxation
Nebraska Department of Revenue – Property Assessment Division
Nebraska Public Power District (NPPD) and Omaha Public Power District (OPPD) publicly available information regarding Nebraska's public power system
Cass County Assessor's Office
Publicly available information regarding Nebraska's electric utility structure and privately owned generation facilities.
Note: This article is intended to explain general concepts regarding public versus private ownership and property taxation in Nebraska. It should not be interpreted as a statement regarding the approval, construction, or taxation of any specific future project in Cass County. Property taxation depends on the facts and legal circumstances of each individual development.
