The Hammond Common Council voted on Monday to extend a year-end contingency deadline in its economic development agreement with the developers of a planned $7 billion data center project, giving them 60 more days to reach an electricity supply agreement with NIPSCO.
David Pavlik, co-founder of the Chicago-based Decennial Group, told The Times that his company is nearing a deal with the utility and expects to be able to meet the new deadline of Mar. 2.
While it works toward a deal with NIPSCO, Decennial is also close to finalizing plans to contribute $25 million towards projects in Hammond, with the funds managed by a local nonprofit.
"We are in. It's $25 million. We're excited for it," Pavlik said.
Decennial plans to build a 450,000 square-foot addition to its existing data center complex on Hammond's Lake Michigan shoreline. The new capacity will be used by CoreWeave, an artificial intelligence-focused cloud computing business based in New Jersey.
In June, the Hammond Common Council approved a tax abatement deal with the two companies that will see CoreWeave pay the city a $4 million annual community impact fee per year for 20 years. The funds will support Hammond's College Bound scholarship program.
The agreement was contingent on the developers finding a way to meet the new facility's prodigious electricity needs through a deal with NIPSCO, and included a Dec. 30 contingency deadline at which the parties could decide to walk away from the arrangement. With the year's end fast approaching, no such deal has yet been reached.
Mayor Thomas McDermott, Jr., eager to see the new facility go up, told the council on Monday that the delay has been "frustrating."
"I'm not interested in unlimited extensions, council people," he said. "I want this thing done. And if this group can't get it done, let's get a group in here that can get it done. Because Hammond has the best data center location in the state of Indiana."
Speaking with The Times on Tuesday afternoon, McDermott stressed that he doesn't blame the developers.
"It was a standoff of two companies that are trying to maximize shareholder returns, and I'm not blaming any side," he said. "I just want them to break through because Hammond was sort of being held hostage, you know."
Pavlik, for his part, said that the delays are in part the result of regulatory proceedings surrounding GenCo, a new NIPSCO spinoff that the company created to service data centers, which left the logistics of power procurement uncertain for much of the year.
In January, GenCo petitioned the Indiana Utility Regulatory Commission (IURC) to exempt it from the normal regulatory process for electric utilities. In September, the IURC gave the company permission to proceed with its plan, which will see GenCo hold and manage its own power plant infrastructure and sell power to NIPSCO to serve wholesale customers. NIPSCO has said that the move will ensure that retail electric customers' bills are not impacted by data centers.
"This is a giant project. It's complicated, right?" Pavlik said. "We've gotten most of what we need from them to be able to hopefully finalize this agreement and move it forward. I mean, we're ready to do it. We just have to finish up some of the final negotiation and the T's and C's with them on this thing."
Pavlik declined to discuss the terms under discussion with NIPSCO, citing a nondisclosure agreement.
A NIPSCO spokesperson declined to "discuss private customer information" in a statement to The Times on Wednesday.
"With that said, NIPSCO and GenCo are well positioned to meet the growing needs of large load customers such as data centers while protecting residents and local businesses," the spokesperson wrote. "NIPSCO looks forward to serving potential data center customers and our existing neighbors."
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