Several electric utilities in Indiana are looking to build new power plants to meet the huge energy demand from AI data centers — and that comes with a hefty price tag. The northern Indiana utility NIPSCO said setting up a separate company would protect its other customers from those extra costs.
NIPSCO wants to create a subsidiary to charge data centers for all the new infrastructure they'll need to operate, insulating its current customers from big rate hikes. But the consumer and environmental advocacy group Citizens Action Coalition has concerns.
CAC's Ben Inskeep said NIPSCO hasn't provided a lot of info on how this would work — so there's no guarantee that customers won't end up paying for new power plants in the long run.
"[That the contract] has the terms included in it that are going to require that data center to pay for these generation assets in full. And that there's not some sort of residual risk that could fall — or be borne by other customers should something go wrong," he said.
The subsidiary would negotiate with tech companies privately rather than going through Indiana's public ratemaking process.
"The public will have no idea whether or not this is a fair deal overall or maybe the data centers are getting a sweetheart deal that the public is being kept from seeing because of that confidential nature," Inskeep said.
Indiana Michigan Power requires tech companies to make long-term financial commitments to pay for new power plants built to serve them. Inskeep said these agreements have been made public.
READ MORE: AI data centers threaten to derail climate progress in Indiana
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The Indiana Office of Utility Consumer Counselor also initially had concerns with NIPSCO's plans, but said they've been addressed.
The Indiana Utility Regulatory Commission is expected to decide whether the proposed subsidiary can bypass state oversight by the end of the third quarter.
Neither NIPSCO nor the OUCC provided someone for an interview.
Rebecca is our energy and environment reporter. Contact her at rthiele@iu.edu or on Signal at IPBenvironment.01. Follow her on Twitter at @beckythiele.
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