NIPSCO, on Wednesday, announced that the company has received the Indiana Utility Regulatory Commission’s approval for its NIPSCO Generation LLC — or GenCo — declination petition, which is designed to serve Northwest Indiana’s growing data center industry.
“This is an important step forward to position Northern Indiana at the center of a fast-growing, economically essential industry,” NiSource President and CEO Lloyd Yates said in a news release. “The order reflects confidence in our ability to deliver safe, reliable and affordable energy solutions for our communities. It gives us the tools we need to grow responsibly while ensuring that every decision we make keeps customers front and center.”
However, Indiana activists worry about what the region’s future looks like after this ruling, especially as electric bills have increased in the past few months.
“Rather than protecting the public, this IURC ruling paves the way for continued extractive development and deepens the region’s status as an industrial sacrifice zone,” Ashley Williams, executive director of Just Transition Northwest Indiana, said in an email Thursday. “Our communities are being treated as guinea pigs in a risky, first-of-its-kind national experiment; one that allows NIPSCO and big tech to negotiate sweetheart deals behind closed doors while keeping the public in the dark.”
In a Wednesday news release, NIPSCO said the approval “marks a pivotal moment” for the utility and Northwest Indiana. GenCo has multiple strategic pillars that aim to protect retail customers and serve data centers and other large load customers, according to the release.
GenCo was created to shield retail customers from costs associated with serving new data centers, according to the release. It operates as a separate entity and is “best positioned” to meet data center demands quickly and flexibly.
GenCo also enables financial stability, according to a news release, allowing NiSource to “make prudent investments, manage costs effectively and create predictable cash flows.” NIPSCO’s release also said GenCo will allow for quick adaptability as the energy markets evolve.
Information from NIPSCO says the utility has entered into a contract to serve a data center customer, but the company does not have additional information to share at this time.
The GenCo announcement comes just days after Indiana’s Citizens Action Coalition launched “Stop Mike’s Hikes,” an accountability campaign asking Gov. Mike Braun “to answer for skyrocketing electricity bills and change misguided energy decisions,” according to Post-Tribune archives.
In an email to the Post-Tribune, Citizens Action Coalition Program Director Ben Inskeep said the organization is disappointed by the IURC’s decision to approve the GenCo strategy, saying it expands NIPSCO’s “monopoly power, lacks transparency, and diminishes regulatory oversight” related to data centers.
“This unbalanced decision fails to adequately protect ratepayers and mitigate this dire affordability crisis, while giving NIPSCO an opportunity to reap massive, unregulated profits from data centers,” Inskeep said.
The Citizens Action Coalition has found that electric utility bills have increased more than $28 per month statewide, which is also 17.5%, according to a July 23 report from the organization. NIPSCO residential customers were hit hardest, with about a $50 per month, or 26.7% increase, in one year.
“We have no reason to trust NIPSCO’s claims about protecting ratepayers,” Williams said in an email. “Residents here already pay the highest electric bills in the state and live with the burden of decades of pollution. Now, this decision threatens to exacerbate the situation, as the utility retreats from its commitments to transition away from fossil fuels and doubles down on corporate giveaways at the cost of our health and safety.”
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Rick Calinski, director of economic development and public affairs for NIPSCO, said at a Michigan City council meeting that the utility will not raise customers’ electric rates to power a data center in Michigan City. The council previously passed four resolutions related to a potential data center in the city.
Inskeep said in an email Thursday that data centers are leading to soaring costs in order to build new resources.
“In other words, even if NIPSCO customers don’t directly pay for the power plants that GenCo will own that will be used by NIPSCO to serve data centers, the sharp increase in demand for electricity and capacity caused by data centers is leading to higher prices in the market which are paid by everyone,” Inskeep said.
Inskeep also said GenCo will own only power plants and not other investments necessary to power data centers, which he’s worried will be given to NIPSCO customers and lead to more rate increases.
“NIPSCO has a long history of cutting sweetheart deals with its super-large industrial customers to lower their rates and shift costs onto residential customers, which is a big part of why NIPSCO’s residential customers have the highest bills in the state,” Inskeep said. “This track record gives me great concern that they will not fairly allocate these costs between data centers and other customers and be inclined to cut sweetheart deals for them, too.”