Indiana coal plant with data center ties gets $27M federal subsidy
The Merom Generating Station, a coal-fired power plant in Indiana, received $27 million in federal subsidies from the Trump administration to modernize under the Defense Production Act. This plant, which provides energy to a cryptocurrency mining operation, has an agreement to sell electricity to NIPSCO Generation, a subsidiary established to power data centers in northern Indiana. The subsidy has drawn criticism from environmental and conservative groups who view it as an abuse of emergency powers and a handout to the coal industry.
The Trump administration announced $700 million in federal subsidies to the U.S. coal industry, with Indiana's Merom Generating Station receiving over $27 million for modernization. The 1080-megawatt coal-fired power plant, located in Sullivan County, was one of 12 listed by the U.S. Department of Energy to receive funds under the 1950 Defense Production Act, which grants the president authority to expand the U.S. industrial base. DOE stated the initiative aims to maintain operational reliability and promote environmental stewardship.
Hallador Power Company, based in Colorado, owns the Merom plant, which was previously slated to close in 2023 but remained operational to supply a cryptocurrency mining operation. Hallador purchased the plant in 2022 and, in May 2026, signed a 12-year agreement to sell electricity from Merom to NIPSCO Generation, a subsidiary of an investor-owned utility created specifically to power data centers in northern Indiana. This agreement is set to begin in September 2028 and run through May 2040.
The federal subsidy announcement prompted swift disapproval from various groups. David Jenkins, president of the national nonprofit Conservatives for Responsible Stewardship, called the handout "boneheaded on steroids" and a "total misuse of the Defense Production Act." Jill Tauber, vice president at the environmental advocacy group Earthjustice, criticized the subsidies as an abuse of emergency powers, arguing that taxpayer dollars should support clean air and water, not fossil fuels.
President Trump and his senior staff, including U.S. Secretary of Energy Chris Wright, defended the subsidies as crucial for affordable power and a part of the administration's broader effort to "reindustrialize America" and boost the coal industry. Wright mentioned that Trump's administration has issued orders since December 2025 to prevent several coal-fired power plants, including NIPSCO's R. M. Schahfer Generating Station in Wheatfield and CenterPoint Energy’s F.B. Culley Station in Warrick County, from closing. Wright emphasized the magnitude of these efforts, stating that coal has been "maligned for far too long." The Merom plant is a key part of these efforts, with its modernization funded by federal dollars and its power linked to data center development.