Earthjustice has warned Northern Indiana Public Service Co. against making costly repairs to its R.M. Schahfer Generating Station to keep it running through spring in accordance with a federal emergency order.
The environmental law organization, representing Citizens Action Coalition of Indiana, Just Transition Northwest Indiana, Hoosier Environmental Council and Sierra Club, sent a joint letter to NIPSCO, telling the utility to think twice before pursuing expensive fixes for the non-functioning Unit 18.
DOE has put a freeze on multiple coal plants’ planned retirements, including Units 17 and 18 at R.M. Schahfer Generating Station. (See DOE Orders Two Indiana Coal Plants to Stay Open Through Winter.) NIPSCO planned to idle the units Dec. 31, 2025; they now must operate through March 23, 2026.
“There are several legal bases to conclude that DOE lacks authority under Section 202(c) to direct NIPSCO to revive the generation facility. We intend to litigate the recovery of any imprudently incurred expenditures,” Earthjustice wrote in the Dec. 30 letter addressed to Erin Whitehead, NIPSCO’s vice president of regulatory policy and major accounts.
Earthjustice said Unit 18 is broken and restoring it likely would entail significant equipment repairs. It said before NIPSCO undertakes repairs, it should examine whether they would be sensible.
Earthjustice pointed out that Schahfer’s Unit 18 underwent a 2,890-hour forced outage from Feb. 16, 2025, to June 23, 2025, due to a turbine blade separating from its root. The unit confronted a second, 1,996-hour outage beginning July 9, 2025, this time because of damage to an upper section of condenser tubes.
“We expect that the expenditure to procure and install the referenced long-lead time equipment to revive Unit 18 — instead of allowing the units to retire as previously planned — will be substantial,” Earthjustice said in its letter.
The law organization argued DOE exceeded its authority and treaded on state jurisdiction by effectively ordering the renovation of a rundown and worn-out coal unit. Earthjustice said while Section 202(c) of the Federal Power Act permits temporary connection in emergencies, it does not authorize the physical rebuilding of a generating unit. It added that Congress has never given DOE that power.
‘State of Disrepair’
“Because the plant is at the end of its useful life, with years of forgone maintenance and capital expenditures, and in a state of disrepair, the department’s order essentially requires rebuilding significant parts of the plant. Nowhere does the statute empower the department to issue such directive, and the department’s order is facially ultra vires,” Earthjustice told NIPSCO.
Earthjustice said in addition to NIPSCO needing FERC approval for a cost allocation to run the plant (under which only prudent costs can be recovered), Indiana has a federally mandated costs law. Under that state law, any costs cleared for recovery must be just and reasonable. Expenditures deemed unnecessary, excessive or imprudent, along with expenses that aren’t considered useful to ratepayers, are not to be recouped.
“A reasonable utility management does not in good faith expend money in response to an unlawful directive, particularly when the utility management is on notice of the unlawful nature of the directive,” Earthjustice and others wrote.
“The Trump administration’s unlawful emergency orders are not a blank check for NIPSCO to be paid by billpayers. NIPSCO is required to make prudent decisions about incurring costs to repair and operate its coal-fired units. We will not let NIPSCO simply add unneeded, unlawful and very high costs to peoples’ electricity bills without a fight,” Earthjustice attorney Sameer Doshi said in a statement to RTO Insider.
NIPSCO said its compliance with the DOE’s directive is mandatory and it’s reviewing the “details of this order to assess its impact on our employees, customers and company to ensure compliance.” The utility told RTO Insider that while the decommissioning timeline for the Schahfer plant is altered, its long-term plan to “transition to a more sustainable energy future remains unchanged.”
“Guided by our integrated resource plan, NIPSCO and NiSource recognize the importance of reliable and affordable energy as we manage costs and adapt to changing regulatory requirements. Our commitment to providing safe and dependable energy remains steadfast both now and in the future,” NIPSCO said in a statement provided to RTO Insider.
NIPSCO did not respond to RTO Insider’s request for comment on whether it plans to repair Unit 18 to comply with the order, the extent or estimated cost of the repairs, whether it plans to recover potential costs from ratepayers or whether it’s planning to make a FERC filing to recover costs. The utility also did not address RTO Insider’s question on whether it’s appropriate for the coal units’ costs to be allocated to the entire MISO Midwest region, as Michigan’s J.H. Campbell coal plant is poised to do. (See FERC Rules Costs of Mich. Coal Plant Extension Can be Split Among 11 States.)
‘Needs Rebuilt’
Unit 18 apparently needs extensive turbine work.
At the Indiana Utility Regulatory Commission’s (IURC) 2025 Winter Reliability teleconference, a NIPSCO executive acknowledged that Unit 18 is in an extended “forced outage” and it would take time and effort to restore to service.
“Frankly that unit, it needs rebuilt,” NIPSCO President and COO Vince Parisi described Unit 18 to the IURC. “It’s just the reality of that unit being close to retirement. We’re not completely unprepared, but it will take time to get long-lead time items in to be able to make the repairs necessary.”
Parisi said the work would involve long-lead time equipment that would have to be ordered and repairs could take six months or longer to get the unit to be able to operate on an extended time horizon.
NIPSCO also said Unit 17 likely would require work to stay online.
Following questions from the IURC, NIPSCO executives said they likely would roll potential repair costs stemming from the DOE order into a deferral account, like Consumers Energy is doing with its J.H. Campbell plant.
NIPSCO, anticipating the emergency 202 order, told the IURC in early December that it reached out to coal providers to ensure a fuel supply.
The utility plans to convert the Schahfer station to gas-only to supply electricity to data centers, including Amazon Web Services’ planned, $15 billion campus. The Schahfer plant is composed of two natural gas units in addition to the two older, large coal units.
Indiana’s Citizens Action Coalition reported the most dramatic electric bill increase in two decades in Indiana in a July 2025 roundup. The group said statewide averages were up more than $28/month (17.5%). NIPSCO customers were hardest hit at about $50/month (26.7%) due to climbing fuel costs, coal plant cleanups and investments in infrastructure.
