A Northern Indiana Public Service Co. affiliate — called NIPSCO Generation, or GenCo — plans to build up to 3 GW of gas-fired generation and battery storage to serve planned Amazon data centers, the companies said Monday. Combined with electric transmission to be built by NIPSCO, the companies expect to spend about $7 billion.
Under the arrangement, GenCo plans to build two 1.3-GW gas-fired power plants and a 400-MW, 4‐hour battery storage system to serve the data centers, according to filings at the Indiana Utility Regulatory Commission. In comparison, NIPSCO expects its non-data center load in 2028 will be about 2.3 GW.
The IURC on Nov. 19 reaffirmed a September decision to approve the GenCo framework, which is designed to ensure that NIPSCO’s existing customers don’t pay for infrastructure needed to serve hyperscalers like Amazon. Under the framework, GenCo will own and operate power plants for large load customers.
NIPSCO, a NiSource subsidiary, expects its 15-year deal with Amazon will produce about $1 billion in savings for its ratepayers. Those savings will be reflected as a credit on customers’ electric bills, according to a Nov. 7 filing by NIPSCO and NIPSCO Generation at the IURC. Residential customers will receive roughly $7 in monthly savings, according to the utility.
The companies have asked the IURC to approve a “special contract” and a power purchase agreement for the arrangement with Amazon. The filings at the IURC don’t name Amazon, but the details such as capacity, capital expenditure amounts and ratepayer savings match Monday’s announcement.
The contract calls for NIPSCO to begin providing power and capacity to Amazon data centers by Jan. 1, 2027, with deliveries climbing up to 2.4 GW by the end of 2032, Vincent Parisi, NIPSCO president, chief operating officer and CEO, said in an IURC filing.
Under the arrangement, NIPSCO will buy the power to serve the Amazon data centers through a PPA with GenCo. The Federal Energy Regulatory Commission will also have to approve the PPA. GenCo plans to seek separate IURC approval for any generation it builds for Amazon.
The contract gives Amazon a one‐time option, by March 31, 2029, to reduce its total capacity by 1,200 MW, according to NIPSCO.
NIPSCO will build, own and operate transmission infrastructure needed to serve the Amazon data centers, according to the application. The costs for the transmission will be kept separate from the utility’s ratebase and not flow through to its existing customers, the utility said.
NIPSCO and GenCo asked the IURC to approve the special contract and PPA by May 6.
GenCo is in talks to supply up to 3 GW to additional data center customers, with another 3 GW of “developing opportunities,” NiSource said in an Oct. 29 investor presentation.
Citizens Action Coaltion is reviewing the proposal, with an eye toward ensuring that ratepayers won’t be harmed by the arrangement, according to Ben Inskeep, a program director at the advocacy group.
”We will vigorously advocate to protect residential customers from risks and ensure they see significant affordability benefits, rather than more rate hikes, with the addition of large load customers,” Inskeep said Tuesday in an email.
In the last two years, NIPSCO has increased residential bills by $77 a month for customers using 1,000 kWh, resulting in the highest electric bills in the state, Inskeep said.
Also, the 2.6-GW of gas-fired generation GenCo plans to build at its coal-fired Schahfer power plant site could produce nearly four times the amount of greenhouse gas emissions that the existing Schahfer coal plant emitted in 2023, according to Inskeep.
“It is outrageous that none of the electricity to serve the 2.4 GW of data center load will come from additional renewable energy or energy efficiency,” Inskeep said.
