Data centers in Indiana

What this is about

A data center is a building full of computers. The ones being built now for artificial intelligence are large enough that each campus is a utility customer in its own right, and the questions they raise — who pays for the new power plants, what property tax the building pays, how much water it uses, how close it sits to a house — are settled by different officials under different laws. This brief sets out what the law actually says, who decides what, and what is genuinely contested, so that a voter or a candidate can tell the difference between a disagreement about facts and a disagreement about values.

Operating in Indiana

38 data centers at the start of 2026, with 37 more planned or under construction ^[1]

Projected electricity use

About 1 terawatt-hour in 2025, projected to pass 6.5 TWh by 2030 — from about 1% of the state's electricity demand to about 6.3% ^[1]

Size of one campus

A hyperscale campus can occupy 200 to more than 1,000 acres and need more than 1,000 megawatts ^[1]

Jobs, once built

A $2 billion facility may employ a few hundred people once it is operating ^[1]

Local rules so far

As of July 2026: 11 Indiana counties had passed data center ordinances, 18 had passed construction moratoria, and 2 had enacted bans ^[1]

What the law says

Who decides what

Each of these is a line on a ballot somewhere in Indiana this year.

State Senator

The statutes themselves: the sales tax exemption and its length, the large load customer definition, and what the utility commission must weigh ^{[2, 5]}.

State Representative

The same statutes. Changes to the exemption or to the cost-allocation rules start as bills in one of these two chambers ^{[2, 5]}.

County Council Member

Property tax abatement: whether to designate an economic revitalization area and on what terms ^[3].

County Commissioner

County zoning and ordinances: where a data center may be built, and under what conditions ^[1].

Town Council Member

The same two powers inside a town: designating an economic revitalization area, and local zoning ^[3].

City-County or City Common Council Member

Abatement and zoning inside a city ^[3].

County Assessor

Assessing the property once it is built, which sets what is actually owed after any abatement.

What has happened so far

• On January 28, 2026 the Indiana Utility Regulatory Commission approved Indiana Michigan Power's expedited generation resource plan in Cause No. 46301, as modified by a settlement among the utility, the Office of Utility Consumer Counselor, an industrial customer group and Amazon Data Services ^[4].
• Under that settlement I&M withdrew its proposal to build new natural gas combined cycle units through the expedited path, agreeing to seek a certificate for those under the ordinary statute instead; limited newly built gas combustion turbines pursued through the plan to 1,650 megawatts; agreed to target at least 660 megawatts through power purchase agreements of ten years or shorter; and raised its clean energy category from up to 800 to up to 1,500 megawatts ^[4].
• The Citizens Action Coalition, which intervened, argued the plan should be denied, saying it did not allocate at least 80% of the new resource costs to the large load customers whose demand caused them, and that the rider's design shifted risk onto existing customers. Fort Wayne, Marion, South Bend and Steel Dynamics did not oppose the settlement; the Citizens Action Coalition did not join it ^[4].

What is genuinely contested

• How much of the cost of new generation large customers actually bear. The statutory and contractual arrangements are specific to each case, and the share that reaches other customers was the central dispute in Cause No. 46301 ^[4].
• Whether the jobs justify the tax treatment. The exemption can run 50 years at the top investment tier ^[2], while a $2 billion facility may employ a few hundred people once it is operating ^[1].
• Water. U.S. data centers used about 17.4 billion gallons in 2023, and use is expected to double by 2028, with the Midwest among the regions most affected ^[1]. What any single Indiana campus will draw is usually set in a local agreement rather than in state law.
• Who should decide. The sales tax exemption is granted by a state agency, the abatement by a local council, the power plants by an appointed commission. A voter who objects to one of those has to find the right ballot line for it.

Questions worth asking a candidate

Civic does not ask these on anyone's behalf, and does not score the answers. They are here because they are the questions the law above actually puts to whoever wins.

• Would you grant a property tax abatement to a data center in this county, and on what conditions — jobs, wages, water, decommissioning, payments in lieu of taxes?
• The state sales tax exemption can run 50 years at the top investment tier. Should the legislature shorten it, condition it, or leave it?
• Should a large load customer be required to cover a fixed share of the generation built to serve it, and should that share be written into statute rather than settled case by case?
• What should a county ordinance require on noise, setbacks, water use and decommissioning before a permit is issued?
• If a campus closes before the end of its abatement or its power contract, who is left holding the cost?

What we could not find

• A single public list of every data center abatement granted in Indiana and its terms. Abatements are adopted county by county, in local council resolutions, and are not published in one place.
• Water withdrawal figures for individual Indiana campuses in free, public sources.
• The statutory text for the large load customer cost-share percentage. The 80% figure appears in testimony and in summaries of the 2025 law; we could not confirm it from a free copy of the section itself, so this brief does not state it as law.

Sources