Indiana coal retirements delayed again as utilities seek to recover costs
Two Indiana coal plants, originally set to retire, must remain operational through December under renewed federal orders, sparking a dispute over cost recovery and environmental impact. The U.S. Department of Energy cited rising electricity demand, including from large data centers in northern Indiana, as a reason for the extension. Utilities are seeking to recover costs, while environmental groups challenge the orders in court.
The U.S. Department of Energy (DOE) has renewed Trump administration orders, mandating two Indiana coal-fired generating plants, NIPSCO’s R.M. Schahfer Generating Station in Jasper County and CenterPoint Energy’s F.B. Culley Generating Station in Warrick County, to remain operational through December. These directives extend previous orders, prolonging a dispute over the costs of keeping the aging facilities on the grid. Indiana Governor Mike Braun has commended the extension, stating it will help protect residents from higher energy costs and maintain power reliability.
However, consumer and environmental advocates, including Rep. Carey Hamilton and organizations such as the Sierra Club, argue these mandates will increase utility bills by extending the life of expensive, less efficient units. Rep. Hamilton has urged Indiana’s attorney general, Todd Rokita, to challenge the order. The DOE cited rising electricity demand, extreme weather, retiring generation, and delays in bringing new resources online, specifically pointing to demand from large data centers in northern Indiana, as justifications for the extension.
Both NIPSCO and CenterPoint Energy are seeking to recover compliance costs from federal regulators, with NIPSCO requesting approximately $38 million from the Federal Energy Regulatory Commission (FERC) for the first quarter of 2026. Environmental and consumer groups, including the Environmental Law & Policy Center, Sierra Club, and others, have already filed a lawsuit challenging the Indiana mandates in the U.S. Court of Appeals for the District of Columbia Circuit. This court recently vacated a similar DOE order in Michigan, concluding that the department's reasons did not establish an emergency under federal law.