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

Briefing note

U.S. Energy Secretary Chris Wright signed a fourth consecutive Section 202(c) emergency order on September 18, 2026, requiring NIPSCO's R.M. Schahfer Units 17 and 18 in Wheatfield (Jasper County) and CenterPoint Energy's F.B. Culley Unit 2 in Warrick County to remain available through December 18, 2026, the fourth 90-day renewal since the original orders were issued December 23, 2025. The roughly 951 MW total of coal capacity being held past retirement (847 MW at Schahfer, 104 MW at Culley) is running at just 17% and 14% capacity factors respectively, yet NIPSCO filed an approximately $38 million FERC cost-recovery request in August for Q1 2026 alone, and NIPSCO President and COO Vince Parisi testified before the IURC in March that total investment in the Schahfer units could exceed $100 million. The Indiana challenge, filed by the Environmental Law & Policy Center, Sierra Club, Citizens Action Coalition of Indiana, Just Transition Northwest Indiana, Hoosier Environmental Council, and Public Citizen, remains pending in the D.C. Circuit, the same court that on September 11, 2026 vacated the equivalent order keeping Consumers Energy's J.H. Campbell plant online in Michigan.

Impact

The Consumers Energy J.H. Campbell precedent is the operator-relevant benchmark: Michigan spent roughly $254 million keeping Campbell online under six successive DOE orders, recovered only $119 million in revenue, and filed to recoup $135 million from MISO ratepayers: a stress-test ceiling for NIPSCO's own FERC recovery bid, and a preview of how Indiana industrial ratepayers get exposed. The cost-allocation mechanism FERC approved spreads NIPSCO's and CenterPoint's 202(c) compliance costs across all 11 MISO Midwest states, meaning if FERC approves the full recovery stack across multiple quarters the surcharge compounds without a defined endpoint, yet FERC's March 2026 approval of the cost-allocation method is legally distinct from approval of actual cost recovery, which must proceed through a separate contested docket where Earthjustice can challenge individual line items. The December 18, 2026 expiration date is also the natural economic endpoint: NIPSCO GenCo's new gas-fired capacity serving Amazon and Alphabet data centers is set to begin delivery as early as January 2027, which closes the marginal reliability window DOE has used to justify each renewal and makes a fifth order significantly harder to defend.

Watch

Watch FERC Docket EL26-36 (NIPSCO's $38 million Q1 2026 cost-recovery request) for a ruling that will set the per-quarter recovery precedent and signal the potential compounding liability Indiana industrial ratepayers face if additional quarterly filings follow before December 18.