Indiana is at a crossroads. As the digital economy accelerates, our state has become a prime destination for massive “megaload” projects. But a quiet regulatory shift in Northern Indiana is threatening to turn potential economic development into a windfall for utillity shareholders at the expense of Hoosier families and a competitive marketplace.
The NIPSCO “GenCo” model, which was recently greenlit by state regulators, is a step backward. While it is marketed as a way to “protect” everyday ratepayers from the costs of serving tech giants like Amazon, the reality is far more troubling.
It creates a “monopoly within a monopoly,” further entrenching an outdated utility business model that stifles competition, raises long-term costs, and stunts the very economic development it claims to support.
The illusion of protection
The GenCo model works like this: NIPSCO creates a separate, “regulation-light” subsidiary (GenCo) to build and own power plants specifically for large customers. GenCo then sells that power to its parent company, NIPSCO, which sells it to the megaload user.
By shielding this new entity from traditional oversight — like the “Certificate of Public Convenience and Necessity” process that ensures projects are actually needed and cost-effective — NIPSCO has essentially carved out a private playground for itself. In this playground, there is no room for competition. Independent power producers, who often build cleaner and cheaper energy, are locked out.
Higher costs, hidden risks
Proponents argue that by “ring-fencing” these projects, residential customers won’t pay for them. This is a dangerous half-truth. When a utiliity makes a multi-billion-dollar bet on massive infrastructure, the financial risk ultimately sits on the utility’s balance sheet. If a megaload user leaves early or the market shifts, NIPSCO’s captive ratepayers are the ones who provide the “guaranteed” revenue that keeps the utility’s credit rating afloat.
Furthermore, by bypassing competitive bidding, we lose the “least cost” discipline that the market provides. When a utility can simply hire its own affiliate to build a project, there is zero incentive to find the best price or most efficient technology. The result is “gold plating” — building more expensive infrastructure than necessary because the utility earns a profit on every dollar it spends.
Stifling innovation and economic growth
Indiana’s economic future depends on a modern, flexible and competitive grid. Other Indiana utilities, like Duke Energy and Indiana Michigan Power, have moved toward models that allow large customers to access market-based rates or partner with independent energy developers. These models utilize a mix of energy production and storage that can be deployed faster and cheaper than exclusively using massive utility-owned plants.
The GenCo model, by contrast, doubles down on the “build-and-own” energy production strategy of the 1970s. It creates a closed loop that shuts down the innovators and developers who want to invest in Indiana’s energy sustainability.
A better path forward
Indiana does not need more monopolies; it needs more competition. To truly lead the tech era, the Indiana Utility Regulatory Commission and state lawmakers should, first, require all new generation projects for large loads to be open to competitive bidding from independent power producers. Second, enforce true least-cost planning to ensure that every megawatt added to the grid is the result of a transparent process that prioritizes the lowest cost for all Hoosiers. Third, encourage open market access. Allow “megaload” customers to procure their own power from the wholesale market, rather than being forced into “sweetheart deals” with utility affiliates.
The technological development boom has the potential to be, if handled correctly, a once-in-a-generation opportunity for Indiana. We cannot afford to be irresponsible by letting utilities build a “monopoly within a monopoly” that enriches shareholders while leaving the rest of the state with the bill. It’s time to choose competition over corporate silos and build an energy future that works for everyone.
Randy Niemeyer, R-Cedar Lake, is the Lake County Councilman for the 7th District, Lake County GOP chairman, and co-owner of Niemeyer Milk Transfer, Inc.
