The $1 billion-plus capacity agreement between NIPSCO and Hallador Energy — priced at roughly double historical capacity rates — is pending IURC approval before September 30, and if it closes, it resets the electricity cost floor for MISO Zone 6 operators. Federal coal funding announced earlier this month functions primarily as a regulatory endorsement for that deal, not a standalone grant story. Here is what your team needs to act on before each window closes.

Hallador Merom: What the DOE Award Actually Is — and the NIPSCO-Hallador Capacity Deal That Isn't

On June 5, Hallador Energy announced its subsidiary was selected by the Department of Energy to negotiate up to $27.2 million in federal funding for the Merom Generating Station in Sullivan County, part of a $700 million federal coal initiative invoked under the Defense Production Act. Total project cost is $56.9 million. The award is not finalized and isn't expected to materially affect 2026 results.

The number that matters for your operating budget is the $1 billion-plus, 12-year NIPSCO-Hallador capacity agreement disclosed in a May 1 SEC filing — priced at approximately double historical capacity rates, contingent on IURC approval expected before September 30. That is the same date the Defense Production Act authorities underpinning the federal coal policy framework are scheduled to expire. If the NIPSCO-Hallador capacity deal closes at these rates before September 30, it sets a new regional cost floor in MISO Zone 6. If you are an Indiana operator buying power in that zone, model that scenario now.

One more wrinkle worth flagging: the EPA simultaneously has a May 2026 proposal to roll back the very wastewater standards this $56.9 million zero-liquid-discharge upgrade at Merom is being built to meet.

R&D Expensing: What the July 4, 2026 Deadline Actually Requires Before You File

The One Big Beautiful Bill Act permanently restored immediate domestic R&D expensing under new IRC Section 174A for tax years beginning after December 31, 2024. For manufacturers with average annual gross receipts of $31 million or less — measured across 2022 through 2024 — there is a retroactive window to amend returns back to tax year 2022. Most major tax practitioners are treating that window as expiring around July 4, 2026. Miss it and retroactive cost recovery is gone permanently.

The complication your tax team needs to model before filing: if your company claimed R&D credits during the years when costs were capitalized under the old Section 174 rules, the Section 280C interaction requires you to reduce deductible R&D expenses by the credit amount on any amended return. The net benefit is not automatic. Get your tax counsel running those numbers this week.

Kentucky's Data Center Warning Reads Directly as Indiana Exposure

On June 4, Kentucky's Energy Planning and Inventory Commission released a 20-page policy report on data centers and ratepayer protection. Kentucky currently has as many as 30 potential data center projects under consideration. The report cites the Virginia precedent: residential electricity rates there are projected to rise $14 to $37 per month by 2040 under Dominion Energy, the result of approving major data center infrastructure before protective tariff rules were in place.

Indiana is already further into this than Kentucky. NIPSCO has publicly disclosed hyperscale data center load growth in northwestern Indiana as a driver of new capacity procurement — and the Hallador deal fits that pattern. The specific question for your team: does your Indiana utility have a finalized large-load tariff with take-or-pay floors for hyperscale customers, or are you in the same pre-guardrail position Kentucky is now scrambling to exit?

Merrell Bros. Kokomo: 35 Positions Entering the Howard County Labor Pool

Merrell Bros. is expanding its Kokomo facility by 40,000 square feet with a $16.5 million investment, adding 35 fabricator and engineer positions. If you recruit skilled trades from Howard County, those openings are competing directly with yours right now.

Questions for Your Morning Huddle

Q: What does the NIPSCO-Hallador capacity deal mean for Indiana electricity rates?
A: The $1 billion-plus, 12-year capacity agreement between NIPSCO and Hallador Energy is priced at approximately double historical capacity rates and awaits IURC approval before September 30. If approved, it establishes a new cost floor for electricity in MISO Zone 6 — Indiana C&I operators should model their electricity cost trajectory against that scenario before the IURC decision, not after.

Q: Does the R&D expensing restoration under the One Big Beautiful Bill Act automatically benefit my manufacturing company?
A: Not automatically. If your company claimed R&D credits during the years when R&D costs were capitalized under the old Section 174 rules, the Section 280C interaction requires you to reduce deductible R&D expenses by the credit amount on any amended return. The net benefit must be modeled before filing — the retroactive amendment window is likely closing around July 4, 2026 for qualifying manufacturers under $31 million in average gross receipts.

Q: Does Indiana have data center ratepayer protections in place for hyperscale customers?
A: Indiana has not publicly finalized a large-load tariff with take-or-pay floors for hyperscale data center customers. NIPSCO has disclosed data center load growth as a driver of new capacity procurement, and the Hallador deal fits that pattern. Indiana C&I operators should ask their utility specifically whether a finalized cost-protection mechanism exists before new large-load capacity costs reach the rate base.

Three actions this week: get your tax counsel modeling the Section 280C interaction before July 4; ask your utility's tariff team whether a finalized large-load tariff with take-or-pay floors exists for hyperscale customers; and if you operate in MISO Zone 6, build the scenario where the NIPSCO-Hallador capacity deal closes at double historical pricing before September 30.

For context on how capacity market mechanics translate into your electricity costs, the TEG Energy Decision Blueprintis the right starting point.

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