NiSource Promises Microsoft's Data Center Won't Raise Anyone's Bill. LaPorte County Already Decided Not to Take That on Faith.

Hundreds of people packed into the LaPorte Civic Auditorium on an evening this past April, and the question most of them wanted answered wasn't about jobs or tax revenue. It was simpler: is my electric bill about to go up? Microsoft was there to talk about the data center buildings it wants on the edge of town, and when a resident pressed the company on energy costs, Jonathan Noble, a Microsoft government affairs director, said it was not the company's intent for the project to affect anyone's rates, and pointed to the state utility commission's public rate-setting process. That's a company's word, not a regulator's finding, and the room seemed to understand the difference.

LaPorte County didn't leave it there. One commissioner had already come out publicly against data centers the previous December, citing the demands they'd put on the grid, on water, and on the night sky. By May 6th, the county's Plan Commission had voted 8-1 to recommend a full data center ordinance, built off a template borrowed from neighboring Lake County, and the Board of Commissioners passed it unanimously days later. It restricts new data centers to industrial-zoned land, sets setback, noise, and water-use standards, and routes anything that doesn't fit through the Board of Zoning Appeals. Commissioner Joe Haney called it "a good step in the right direction," and pointed specifically to the industrial-zoning requirement as a buffer meant to protect residential wells.

Microsoft broke ground on the La Porte campus anyway, on June 17th. Company president Brad Smith flew in for it and tried to meet the skepticism directly. "We want to earn people's trust," he told the crowd, promising the first phase would bring more than 600 permanent jobs and use closed-loop liquid cooling designed to limit water draw, with construction on the first buildings running through the end of 2027. It was, by most accounts, a more candid pitch than the April info session had been. It also wasn't the end of the question that crowd actually asked.

The deal that's supposed to answer it

On October 16th, NiSource -- the parent company of Indiana utility NIPSCO -- announced the piece meant to settle that question: a 20-year power agreement to supply Microsoft's La Porte campus starting in 2028. The utility's generation subsidiary, GenCo, is adding roughly 1,100 megawatts of new generation to serve it, plus 600 megawatts of battery storage under contract with an affiliate of Singapore's AGP Group. NiSource's pitch, consistent with the structure Indiana regulators have already approved for its other hyperscaler deals, is that Microsoft funds the generation and transmission its own load requires, so the cost never lands on NIPSCO's existing residential and business customers. The company estimates that structure will save those other customers up to $140 a year over the life of the contract.

This is NiSource's third deal built this way this year, not its first, and that history is most of why the pitch is credible at all. The Indiana Utility Regulatory Commission fully approved the utility's settlement with Amazon back in June, a deal under which Amazon covers up to $1 billion in rebates to other customers over 15 years. A separate long-term supply agreement with an Alphabet subsidiary was set to begin service this summer. NiSource now puts its cumulative customer-savings estimate across all of its data center agreements at $1.75 billion, up from the $1.4 billion figure it was citing as recently as June. The company's own capital spending plans have grown sharply alongside this pipeline of deals -- a utility that has found a way to build its biggest loads ever without, on paper, sending the bill to everyone else.

NIPSCO's own numbers put that shift in scale. The utility serves roughly 500,000 electric customers across more than thirty counties in northern Indiana, and until this run of hyperscaler deals, its growth was ordinary utility business: slow load additions, rate cases measured in single digits. Three back-to-back agreements this size, each requiring new generation and transmission built specifically for one customer, is not ordinary business, and Indiana lawmakers were worried enough about this exact dynamic to pass House Enrolled Act 1007 earlier this year, requiring data centers statewide to cover their own infrastructure costs rather than spreading them onto other ratepayers. NiSource's deal structure and HEA 1007 are aimed at the same problem from two different directions: one is a negotiated settlement specific to each hyperscaler, the other a statutory floor that applies no matter who's negotiating or how good a mood the utility is in that quarter.

I think the number worth watching isn't the $140. It's everything NiSource hasn't said yet. The October 16th announcement doesn't name the specific plants behind the 1,100 megawatts, their fuel type, or a cost per megawatt, and a savings estimate is only as good as the generation mix behind it. NiSource has said more operational and financial detail is coming on its third-quarter earnings call on October 28th. Until then, $140 is the company's own projection, not a figure the IURC has tested in a docket the way it tested the Amazon settlement.

LaPorte already decided not to wait and see

That's the gap LaPorte County's ordinance was written for, whether or not anyone in county government meant it that way. The rules don't depend on NiSource's savings math holding up. They require any future data center to sit on industrial land, keep its distance from homes, meet noise limits, and account for its water use, regardless of what the power bill ends up looking like once the generation mix is public. Haney's industrial-zoning point is the clearest version of that logic: a hedge against local strain that a megawatt figure in a utility press release was never built to capture in the first place.

That hedge got complicated almost immediately. Less than two weeks after the county passed its ordinance, the City of La Porte annexed roughly 1,000 acres of farmland east of Microsoft's existing site and rezoned it for light industrial use, clearing the way for an eleven-building expansion that brings the campus to seventeen buildings total -- the same expansion this month's NiSource power deal is sized to cover. The county's new rules apply only to unincorporated land. Once the city annexed the parcels, the county's own ordinance stopped reaching them. Haney, the same commissioner who'd called the ordinance 'a good step in the right direction' three weeks earlier, said the city never notified the county directly about the annexation: 'They just published in the newspaper.' Fellow commissioner Steve Holifield opposed the annexation outright. The county had just finished writing the rulebook. The city then moved the game to a board it didn't write rules for.

Not everyone at the April session left satisfied, and some residents still aren't. One asked, pointedly, why a campus of this size wasn't going up in Satya Nadella's own backyard instead. Others said Microsoft's communication could have been better, full stop. Those complaints aren't really about megawatts or dollars. They're about a decision that got made somewhere else landing, concretely, in LaPorte, Indiana -- which is a different complaint than the one a $140-a-year savings estimate is built to answer, and a different complaint than the one the county's own ordinance was built to answer too.

The honest version of this story has three layers now, not two. NiSource has built a cost-recovery structure, used three times, that keeps a hyperscaler's power demand off other ratepayers' bills on paper -- a real, structural answer to the fear that filled that auditorium in April, and the same cost-shift question Indiana's HEA 1007 was written to settle for a different utility's customers entirely. LaPorte County decided a structure on paper isn't a result, and wrote its own siting protections rather than take anyone's promise on faith. Then the city annexed the land those protections were supposed to cover, and the county found out from a newspaper notice like everyone else. NiSource's $140 figure gets tested October 28th, in front of analysts who will ask about fuel mix and cost per megawatt. LaPorte County's ordinance may never get tested at all, on the one project it was actually written for.