September 23, 2026 · Shelby · Marion · Jasper · Steuben · NIPSCO · AES INDIANA · IM AEP

Indiana Coal Retention Costs, AES Indiana Rate Increase, and a Transmission Gap Until 2032: What Manufacturers Need to Do Now

Indiana manufacturers face three simultaneous electricity cost pressures: NIPSCO coal retention, an AES Indiana rate increase hitting January, and no transmission relief until 2032. Act now.

Daniel BurkePublished every day

Indiana manufacturers are carrying three separate electricity cost burdens at the same time, and none of them appear as a single named line item on any bill. NIPSCO's Q1 FERC cost-recovery filing for coal kept past its retirement date totals $38 million for one quarter alone. An AES Indiana Phase 2 rate increase is locked in for January regardless of a pending rehearing. And a 185-mile transmission backbone across northeast Indiana will not be energized until 2032 at the earliest. Today's TEG Daily covers five stories with direct consequences for your power costs, your corn input contracts, and your capital planning.

01Statewide

POET Bioprocessing Doubles Ethanol Capacity in Shelbyville, Corn Input Contracts Are Now a Risk Variable

POET Bioprocessing broke ground in Shelbyville on June 16th on a $200 million expansion that doubles ethanol output from 98 million gallons to 193 million gallons annually. The completed facility will buy 70 million bushels of corn annually, with the expansion adding 32 million bushels of new demand on top of current sourcing from farmers within roughly 50 miles.

For the huddle: If POET's 32 million additional bushels of annual corn demand tightens the regional grain basis by 15-20 cents per bushel, what is the dollar impact on our corn-based input costs, and have we locked in any forward supply contracts before the expanded facility reaches full production in 2028?

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02Statewide

Maple Leaf Foods Consolidates All U.S. Plant Protein Into a Single Indianapolis Facility

Maple Leaf Foods announced September 22nd that it will consolidate all U.S. plant protein manufacturing into a single Plant Protein Centre of Excellence at its 118,000-square-foot Indianapolis facility and wind down production at plants in Seattle and Turners Falls, Massachusetts by Q4 2027. CEO Curtis Frank cited "declining volumes" that left the three-plant network "substantially underutilized."

For the huddle: Does our food or ingredient supply chain have any single-facility concentration analogous to what Maple Leaf is creating in Indianapolis, where one plant becomes the sole production source for an entire product category serving multiple markets?

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03Warrick

NIPSCO Coal Retention Costs: What Indiana Manufacturers Are Paying to Keep Old Units Running

Energy Secretary Chris Wright signed a fourth consecutive Section 202(c) emergency order on September 18th, requiring NIPSCO's R.M. Schahfer Units 17 and 18 in Wheatfield and CenterPoint's F.B. Culley Unit 2 in Warrick County to remain available through December 18th. That is 951 combined megawatts of coal capacity, 847 at Schahfer and 104 at Culley, running at capacity factors of 17% and 14% respectively.

For the huddle: Given that NIPSCO's Q1 2026 compliance costs were $116.7 million against only $33.5 million in Schahfer revenues (a net quarterly loss of $83 million before the FERC recovery ask) what is our exposure as a large industrial customer if FERC approves multi-quarter cost recovery stacked across 2026?

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04Allen · Steuben

I&M 765-kV Transmission Backbone and AES Indiana Rate Increase: Two Separate Bills Landing on the Same Operators

Indiana Michigan Power is building 185 miles of new extra-high-voltage transmission line across northeast Indiana, from Allen County through Steuben County, as part of MISO's $21.9 billion Tranche 2.1 plan. The in-service date is 2032 to 2034.

For the huddle: If the MISO 765-kV backbone isn't energized until 2032-2034, what is our facility's current interconnection headroom for load growth, and have we evaluated options for on-site generation or battery storage to bridge that 6-8 year window?

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Questions for Your Morning Huddle

Q: What is NIPSCO's coal retention costing Indiana manufacturers right now? A: NIPSCO filed roughly $38 million in FERC cost-recovery for Q1 2026 alone, implying a daily cost-recovery run rate of approximately $420,000. NIPSCO President and COO Vince Parisi has testified that total Schahfer investment could exceed $100 million, and MISO's cost-allocation framework can spread that recovery across ratepayers in 11 states, including Indiana manufacturers in NIPSCO territory.

Q: When does the AES Indiana Phase 2 rate increase take effect? A: The AES Indiana Phase 2 rate increase takes effect in January 2027, regardless of the pending rehearing. The rehearing's evidentiary session is not scheduled until March 2027, so AES Indiana customers will begin paying the higher rate at least two months before the contested order is reconsidered.

Q: What is the I&M 765-kV transmission backbone and when does it come online? A: Indiana Michigan Power is building 185 miles of new extra-high-voltage transmission line across northeast Indiana as part of MISO's Tranche 2.1 plan. The projected in-service date is 2032 to 2034, and an active FERC cost-allocation challenge filed by five state utility commissions could delay financing and push that date further.

Q: What should Indiana manufacturers do about POET's Shelbyville expansion and corn input contracts? A: If your facility uses corn-based inputs within roughly 50 miles of Shelbyville, lock in forward supply contracts before POET's expansion reaches full production. The expansion adds 32 million bushels of new annual corn demand on top of current sourcing, and the USDA's finalized carbon intensity methodology makes grain farmers upstream variables in POET's 45Z tax credit calculus, which creates new pricing pressure on local corn supply.

Indiana manufacturers are being asked to fund three separate energy infrastructure gaps simultaneously, with no single line item that names the compounding exposure clearly. That is the cost structure worth modeling now. Pull your AES Indiana or NIPSCO rate schedule, model both the refund scenario and the fresh-filing scenario for 2027, and check FERC Docket EL26-36 for the Q1 coal cost-recovery ruling before that per-quarter precedent is set.

For more on how data center load additions are being allocated to Indiana C&I ratepayers, read Utility Cost Allocation for Data Centers: How Indiana Manufacturers Avoid Paying for Grid Buildout They Didn't Cause. For background on how NIPSCO's cost-recovery filings connect to the IURC affordability investigation, see the prior TEG Daily at IURC NIPSCO Affordability Investigation Goes Formal: What Indiana Manufacturers Must Watch.

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