A draft water permit that would let NIPSCO mix wastewater from its coal-fired power plant, a new gas plant and an incoming Amazon data center before discharging it into the Kankakee River is drawing pushback from Jasper County residents who say the plan puts their health, property values and local waterways at risk. The Indiana Department of Environmental Management's Office of Water Quality is now weighing whether to approve the application, which covers the R.M. Schahfer Generating Station in Wheatfield.
Barb Deardorff, a Kankakee Township resident who lives about two miles from the Schahfer plant and roughly seven-tenths of a mile from the river itself, told the Post-Tribune she is worried about property values and public health if the permit goes through. Deardorff, who has a chemistry teaching background and a degree in environmental management, said the roughly 150-page application is difficult for average citizens to understand — and that NIPSCO could ultimately be permitted to discharge some amount of toxic chemicals with negative public-health effects, per her reading of the filing.
According to the Post-Tribune's reporting, the permit application covers wastewater from the coal-fired plant, the new gas plant and the Amazon data center, all of which would be combined in a settling basin before discharge. The Schahfer facility already dumps up to 22 million gallons of wastewater per day, and the same outfall would now handle waste from all three covered projects. IDEM published its notice for the application on September 4, and NIPSCO's underlying renewal request is for NPDES Permit No. IN0053201, according to the Indiana Department of Environmental Management.
Why the Same Discharge Point Is Raising Alarms
Ben Inskeep, program director for the Citizens Action Coalition, said he had never seen a permit mixing coal, gas and data center waste streams before discharge. He told the Post-Tribune the application provides limited treatment before wastewater discharge, and that combining the streams could make it difficult to trace the sources of certain pollutants once they reach the settling basin. NIPSCO's wastewater includes heavy metals such as mercury, arsenic and lead, and per the Post-Tribune's reporting, the discharge could distribute chromium, mercury and arsenic into the Kankakee River if the permit is approved.
Inskeep also flagged the scale of water the new projects would need: the Amazon data center and the gas plant are expected to withdraw more than 34 million gallons of water from the Kankakee River on peak days, and he said that withdrawal could be significant. A NIPSCO representative did not provide comment by the outlet's Friday deadline.
Ashley Williams, executive director of Just Transition Northwest Indiana, said the permit covers a coal plant, a new gas plant and an artificial-intelligence data center complex all routed through the same outfall. Her organization strongly opposes the permit and is encouraging people in the Kankakee watershed and beyond to comment both at the public hearing and in writing. Williams also raised concerns that IDEM's hearing on the draft permit is being held virtually rather than in person in Jasper County.
A Coal Plant That Was Supposed to Be Retiring
The Schahfer coal plant remains in operation during this permit process even though NIPSCO had planned to retire it. Emergency orders issued by the U.S. Department of Energy under Section 202(c) of the Federal Power Act forced NIPSCO to delay the planned retirement of Schahfer coal Units 17 and 18, as reported by News Now Warsaw, with the orders issued in December 2025 and subsequent 90-day directives extending the forced operations through September 19, 2026, to protect regional grid stability. Those same emergency orders left NIPSCO running costly, aging coal infrastructure at the exact moment the Amazon buildout and a major gas expansion are advancing on the same property. A June 2026 Indiana Utility Regulatory Commission hearing revealed that two coal units at the site are broken while the plant continues operating.
The financial fallout has already reached ratepayers. NIPSCO filed a request with the Federal Energy Regulatory Commission in August 2026 to recover $38 million in quarterly compliance costs from MISO regional grid customers, after incurring $116.7 million in operating expenses from January through March 2026 to run the mandated coal units, per News Now Warsaw's reporting. Meanwhile, environmental groups are contesting the underlying federal orders in court, according to the Earthjustice document.
Amazon's Project Rise and the Gas Buildout Next Door
The wastewater mixing plan is tied directly to Amazon Web Services' $7 billion Project Rise data center campus, which Jasper County Commissioners unanimously approved in June 2026 for a 304-acre site on NIPSCO land near the Schahfer plant, according to Inside IN Business. Under those agreements, Amazon committed $98 million in upfront payments, $23 million annually for 10 years, and $25 million to expand Wheatfield Township's domestic water infrastructure, with total local tax revenue projected to exceed $1 billion over 15 years.
The Northwest Indiana Forum has said the campus is designed to rely on air cooling 98% of the year, a figure developers cite to counter concerns over water withdrawals. Alongside the data center, proposed gas facilities at the Schahfer property include 2,600-megawatt and 400-megawatt gas facilities. The proposed buildout is also tied to Amazon's planned campus.
A River Used for Swimming and Fishing
Downstream communities that use the Kankakee River for swimming, tubing and fishing could be affected by contamination from the wastewater discharge, according to the Post-Tribune's reporting. Deardorff said NIPSCO could exceed limits in the discharge permit, pointing to the utility's history of five violations of its current discharge permit since October 2020, and noted the company is taking pollution from three sites and combining it in a settling basin without a planned wastewater treatment plant at the data center site itself.
Post-Tribune reporting from the June 2026 IDEM hearing also noted NiSource's emissions record at the Schahfer plant — a track record utility representatives have pointed to even as activists argue the new gas units will create a fresh long-term carbon footprint. IDEM will host a virtual public hearing on the draft permit October 7 via Microsoft Teams, with written responses due by October 22.
