As data centers become more prominent statewide, some Indiana leaders have introduced legislation that would set more guidelines.
Activists concerned with data centers believe this is the right move.
“We hope to see further state legislation this session that proactively regulates this (artificial intelligence)-driven surge in development, which has already impacted communities like Michigan City,” Ashley Williams, executive director of Just Transition Northwest Indiana, said in a statement. “… We urge the public to support these bills to ensure our well being and futures are prioritized amid this AI boom.”
This session, Senate Bill 79, authored by Sen. J.D. Ford, D-Indianapolis, and House Bill 1043, authored by Rep. Alex Burton, D-Evansville, aim to set limitations for data centers.
Senate Bill 79 would require the Indiana Utility Regulatory Commission to establish a group to determine how much demand data centers would place on Indiana’s electricity grid. If passed, the group would have to report its findings by Oct. 31, 2026, according to the bill.
“Indiana is seeing a rapid increase in proposed data center development and that kind of growth requires careful planning,” Ford said in a statement. “Senate Bill 79 is about making sure we understand the long-term impact on our electric grid, water resources and ratepayers before major decisions are locked in.”
Ford believes that little is known about data centers’ energy use, according to his statement, and Senate Bill 79 would create a process to gather data, study future demand and give communities the information they need.
The bill also aims to strengthen local decision-making, according to Ford’s statement, because it would require corporations to disclose information about power and water use and a site assessment at the start of the planning process.
“This legislation matters now because Indiana is at a pivotal moment,” Ford said. “We can welcome economic development while being honest about costs and impacts. (Senate Bill) 79 helps us grow responsibly and protect Hoosiers over the long term.”
Kerwin Olson, executive director of the Citizens Action Coalition, said in a statement that Ford introduced this legislation last year as well, but it wasn’t given a hearing. Olson and the Citizens Action Coalition support Ford’s bill because the secrecy of data centers leads to more public opposition and skepticism, he said.
“The proposal is not a game changer, but requiring some visibility into these projects would be a welcome change,” Olson said.
Williams also said she supports Ford’s legislation, saying that, if passed, the public will have more of an insight into data center construction and the parties assisting, including NIPSCO’s use of GenCo, which was announced in September.
GenCo, or NIPSCO Generation LLC, was created to shield retail customers from costs associated with serving new data centers, according to Post-Tribune archives, and operates as a separate entity and is “best positioned” to meet data center demands quickly and flexibly. Williams worries that the program won’t protect ratepayers and will keep the public in the dark.
“As outlined in (Senate Bill) 79, ratepayer impacts must be rigorously studied and scrutinized by a working group to ensure our communities, already overburdened by the affordability crisis, are not left holding the bag for Amazon, Google, or any other big tech corporations building in our region,” Williams said.
In addition to Senate Bill 79, House Bill 1043 was introduced and will be debated this legislative session. The bill, if passed, would require data center operators to get a consumption permit from the Indiana Department of Natural Resources.
The requirement would establish procedures for approval of a consumption permit operation and would make an operator consult with the department to assess the viability of a data center.
In a statement, Burton said the legislation would put clear safeguards in place before communities are put at risk. He believes that the legislation welcomes new investment while also protecting communities, strengthening oversight and ensuring that development can be supported responsibly and sustainably.
“Hoosiers deserve safe, drinkable and properly regulated water, regardless of where they live,” Burton said. “As data centers and other water-intensive developments look to expand across Indiana, it is our responsibility to ensure growth does not come at the expense of public health or local water supplies.”
Williams believes it’s important to establish a water consumption permit process to protect local resources.
Olson said Burton’s bill was intentionally left vague so he could work with the DNR and Indiana Department of Environmental Management on specifics. Olson is hopeful that the bill will receive a hearing during the legislative session.
“A process requiring public hearings and a comment period needs to be added to the permitting process proposed in the bill,” Olson said. “Additionally, ensuring that the public has visibility into the details of the permit application is necessary to ensure the public would have confidence in the permitting process.”
Carolyn McCrady, member of Gary Advocates for Responsible Development, agrees with Olson’s sentiment, saying in a statement that both bills are “important first steps” in data center regulation.
“Ultimately, GARD believes that the language should be strengthened to protect the health, well being and pocketbooks of affected communities like Michigan City and Hobart who will bear a disproportionate burden from the construction and operation of data centers,” McCrady said in an email.
