Data Center Site Selection in Indiana

Indiana sits between the Chicago, Columbus and Louisville markets and has a generation fleet still weighted toward fossil fuels. Coal fueled 42% of the state’s net generation in 2024, wind supplied 11%, and solar, hydropower and biomass together supplied about 4%.⁷ Indiana was also the nation’s second-largest coal consumer after Texas.⁷ That mix matters for site selection because much of the new supply that data centers need will be new gas, storage and renewables, and the state has written rules about who pays for it.

Four investor-owned utilities matter most for large campuses: NIPSCO in the north, Indiana Michigan Power (I&M) in the South Bend and Fort Wayne areas, AES Indiana in Indianapolis, and Duke Energy Indiana across much of the rest of the state. Municipal utilities and rural cooperatives serve other pockets, so start by confirming the parcel’s utility service territory. I&M is in PJM, while NIPSCO, AES Indiana and Duke Energy Indiana are in MISO, which affects capacity costs and transmission planning; see our PJM guide and MISO guide.

I&M’s settlement is the template most people mean when they talk about Indiana’s data center rules. It was filed in November 2024 by I&M, the Indiana Office of Utility Consumer Counselor, Amazon, Google, Microsoft, the Data Center Coalition and the Citizens Action Coalition.¹¹ The Indiana Utility Regulatory Commission (IURC) approved it in Cause No. 46097 in February 2025 with one modification.¹ I&M expects its Indiana peak load to exceed 7,000 MW by 2030, up from about 2,800 MW.¹

The settlement does not set a cost allocation method for large loads; those questions were deferred to later proceedings such as a rate case or tracker filing.¹ It also contemplated a Clean Transition Tariff filing and a discussion of demand response for large customers.¹ For a developer, the practical effect is that an I&M site needs a credit-worthy end user willing to commit to a long, take-or-pay style contract, not just a land position. Our guide to large-load tariffs compares these terms with other states, and minimum bills and load factor are worth modeling before signing.

NIPSCO took a different route. Rather than adding data center supply to the regulated utility’s rate base, its parent NiSource created NIPSCO Generation (GenCo), an affiliate that builds generation and sells it to NIPSCO under contracts tied to specific large customers. The IURC approved the strategy in September 2025, and NiSource describes it as a way to shield existing retail customers from the costs of serving new data centers.² GenCo’s first deal is with Amazon, to serve its planned data centers in northern Indiana: up to 3 GW of gas-fired generation and battery storage, with NIPSCO building transmission, at a combined expected cost of about $7 billion.¹⁰ The contract calls for NIPSCO to begin supplying Amazon by January 1, 2027, rising to as much as 2.4 GW by the end of 2032.¹⁰

On June 17, 2026, the IURC fully approved the settlement, the Amazon special contract and the related power purchase agreement, and a separate order approved the combined-cycle gas and battery resources.⁸ NIPSCO estimates the 15-year Amazon contract will save other customers about $1 billion, credited on their bills; those are utility estimates, not audited results.⁸

Outside I&M and NIPSCO territory, the rules are less settled. AES Indiana’s 2025 integrated resource plan splits new supply into two sets: one added regardless of data center demand, and a second, of up to 700 MW of natural gas and up to 820 MW of battery storage, added only after a large-load customer signs a contract.¹² The filing says early analysis shows no negative rate impact on existing customers from serving data centers.¹² Duke Energy reported 7.8 GW of signed electric service agreements with data centers company-wide on its second-quarter 2026 call, and said most of its late-stage large-load pipeline is in Florida and Indiana.¹³ We did not find an Indiana-specific large-load tariff order for Duke as of October 2026, so ask Duke directly what contract terms it is offering.

State law now frames all of these negotiations. House Enrolled Act 1007 (2025) created an expedited approval process for generation built to serve large-load customers such as data centers, along with cost recovery mechanisms, and requires “significant and meaningful financial assurances” from the customer, including reimbursing at least 80% of costs.³ Regulators have also signaled impatience: in March 2026 IURC Chairman Andy Zay told reporters the industry needs to do more and that Hoosiers have lost trust in it.¹⁴ Expect detailed questions about who pays, and plan for contribution in aid of construction on dedicated substations and lines.

Indiana’s two flagship campuses are both in I&M territory. In April 2024 Amazon Web Services announced an $11 billion data center campus near New Carlisle, west of South Bend, with at least 1,000 jobs.⁵ Local incentives later approved included a 10-year, 50% real property tax abatement on three parcels totaling 870 acres, for a plan of 16 data center shells of about 200,000 square feet each.¹⁵ The site is inside the Indiana Enterprise Center, a large master-planned industrial area in St. Joseph County.¹⁵

In Fort Wayne, Google announced a $2 billion data center in April 2024, with up to 200 jobs, and said it would work with I&M to bring clean energy resources to the local grid.⁶ The IEDC committed a 35-year sales tax exemption on a minimum of $800 million of eligible capital, with five more years for each additional $800 million, up to 50 years.⁶

Indianapolis shows the other side. Google withdrew its rezoning request for a 468-acre data center in Franklin Township on September 22, 2025, ahead of a City-County Council vote it was expected to lose, even though the Metropolitan Development Commission had voted 8-1 in favor.⁹ Residents raised water and power use, flooding, noise, tax breaks and nondisclosure agreements.⁹ Our guides on moratoriums and local restrictions and confidentiality and project code names cover how to manage those risks.

Indiana exempted qualified data centers from its 7% sales tax in 2019.¹⁶ The IEDC administers the program, which covers qualifying data center equipment and energy purchases.⁴ The base award runs 25 years, and the IEDC may extend it up to 50 years when investment exceeds $750 million.⁴ Minimum investment thresholds vary by county population and must be met within a set period after the exemption certificate is issued; confirm the threshold for your county with the IEDC.⁴

The 2026 session tried to give local governments a share. As passed by the House, HB 1333 would have charged data centers a 1% sales tax directed to the approving local government; the final language cut that to an optional payment of not more than one cent per dollar of the exempted tax, applying only to data centers that gain local approval after June 30, 2026 and excluding those that already hold an exemption certificate.¹⁶ The Indiana Capital Chronicle estimated that a large data center could have owed at least $5 million a year under the Senate version but no more than $350,000 under the final deal.¹⁶ Property tax abatements remain local and separate; see our guides to property taxes and sales tax exemptions by state.

1. 01Identify the serving utility and its market: I&M (PJM) or NIPSCO, AES Indiana or Duke Energy Indiana (MISO), or a municipal or cooperative utility.
2. 02In I&M territory, model the 12-year term, 80% minimum bill, collateral and exit fee against the tenant’s credit.¹
3. 03In NIPSCO territory, ask whether service would run through GenCo and a special contract, and how long IURC approval took for Amazon.²⁸
4. 04In AES Indiana or Duke territory, ask what new generation the utility would need and how HEA 1007’s 80% cost commitment would apply.¹²³
5. 05Confirm the county’s sales tax exemption threshold with the IEDC and whether a local payment under the 2026 law could apply.⁴¹⁶
6. 06Test local politics early: water, noise, flooding and nondisclosure agreements drove the Franklin Township withdrawal.⁹

Indiana is a strong state for power-hungry campuses when the utility path is clear, and a slow one when it is not. If you want an independent read on a specific parcel’s power, water, zoning and buildable acreage, you can get a site reviewed, or start with our site screening tools. Neighboring options are covered in our Ohio, Illinois, Michigan and Kentucky guides.