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Mayor: NIPSCO decision could determine fate of Hammond data center and $80 million in revenue
Summary
At a Hammond City Council meeting, Mayor Thomas McDermott Jr. said a planned AI data center that developers say could bring $80 million to the city over 20 years depends on NIPSCO’s ability and willingness to provide power; developers have paid $25 million toward the connection, the mayor said.
At the Hammond City Council meeting, Mayor Thomas McDermott Jr. said the city’s planned AI data center — a project with a contractor named Decennial and a prospective main tenant CoreWeave — hinges on whether NIPSCO will provide the necessary power.
The mayor told council members the project could be worth “up to $7,000,000,000” in private investment and that, under the development agreement, Hammond would receive about $80,000,000 over 20 years if the facility is built and powered. “If they turn on the light switch, Hammond gets $80,000,000,” he said.
Why it matters: the data center would bring large private investment and long-term revenue to Hammond, but the mayor said the utility’s decision about available energy and timing is the critical bottleneck.
Mayor Thomas McDermott Jr. said the main tenant already negotiated is CoreWeave and that Decennial would build and lease the facility. “The main tenant, which is already negotiated, is CoreWeave,” he said.
The mayor described efforts to persuade NIPSCO to approve the necessary service but said the utility is in the middle of regulatory proceedings. “They’re in the middle of a rate case… I don’t know if realistically the CEO until that's done is gonna come here on the record,” he said when Councilman Kowinski asked about outreach to the utility.
Council questions and concerns focused on timing and infrastructure. Councilman Tyler asked whether conversations with NIPSCO could include infrastructure repairs; McDermott responded that such topics would be fair to raise once the rate case is resolved. McDermott also said developers have shown “goodwill” by advancing money for power: “In defense of our developers, they gave $25,000,000 for that power upfront to NIPSCO. NIPSCO has their $25,000,000 right now.”
Council members and a few public speakers raised reliability concerns. McDermott noted recent outages in nearby Robertsdale and said parts of the city experienced an outage lasting about 12 hours.
Action status: council discussion only. No vote or formal action on the data center or utility agreements was taken at the meeting; council members asked staff and the mayor to continue outreach.
Background and next steps: the mayor said the city and redevelopment entities previously passed a development agreement anticipating the facility and related tax and revenue arrangements, but that NIPSCO’s capacity and approvals are necessary before the project can move forward. McDermott said he is continuing talks with the developer and will press NIPSCO once regulatory proceedings allow.
Ending: Council members urged continued negotiation; McDermott said he is trying to balance firmness with patience to avoid jeopardizing service while the city seeks commitments from the utility and developers.
