A solution to the problem of paying for data centre power? Unpacking AWS’s recent 3 gigawatt deal with NIPSCO
Energy Gang
Wood Mackenzie
4.6 • 1.3K Ratings
🗓️ 17 February 2026
⏱️ 43 minutes
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Summary
Data centres have become one of the most contentious issue in US power markets. The question of who will pay for the new generation and grid upgrades needed to keep them running has been soaring up the political agenda, and attracting attention in the White House.
Host Ed Crooks is joined on this episode by Brandon Oyer, Head of Americas Power & Water at Amazon Web Services (AWS), and Vince Parisi, President & COO at NIPSCO, the Northern Indiana Public Service Company, to discuss a solution.
Together, they unpack their new agreement to develop power capacity in northern Indiana, which they say will enable AWS to add 2.4 gigawatts of data centre capacity without sticking everyone else with the bill.
Data centres are not just for AI: they are the “invisible digital backbone” behind everything from banking to healthcare to emergency services, Brandon says. But he also acknowledges that local communities around data centre developments are right to ask hard questions about costs. NIPSCO and other utilities agree. Vince says they welcome the economic activity and tax revenues that new data centres bring, but the goal for the electricity system is to ensure customers “aren’t paying for it.”
AWS and NIPSCO say their agreement, which they announced last November, will achieve that goal. In fact, they expect to save customers money, unlocking $1 billion in customer savings over 15 years.
So what actually makes this deal different, and is it a template others can copy? Brandon and Vince walk through the ring-fenced structure (a separate GenCo that funds and builds generation), the performance incentives, and why both sides landed on a 15-year commitment even as data-centre hardware cycles every few years. You’ll also hear why AWS doesn’t see its data centres as truly flexible loads, how the GenCo model let NIPSCO lock in long-lead equipment early, and what plugging this capacity into the MISO power market means for the reliability of electricity supplies.
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Transcript
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| 0:00.0 | Sometimes I don't understand how this is so complicated. I'm in the business of buying electricity. I know I have to pay for it. |
| 0:07.2 | Utilities are in the business of deploying capital, generating a return on that capital, and then operating in a reliable manner. |
| 0:15.0 | If there is power and no data center, then we're not serving our customers. If there's a data center without power, we're not serving our customers. |
| 0:24.6 | If there's a data center without power, we're not serving our customers. |
| 0:29.7 | If you were to think about lessons that could be learned, |
| 0:39.0 | and I guess for the industry as a whole to think about how to add data center capacity the right way and get it powered the right way, |
| 0:39.9 | what would you say? |
| 0:47.2 | Wood McKenzie's solar and energy storage summit is back in Denver on the 29th to the 30th of April 2026. |
| 0:48.6 | It's co-located with a brand new North American Power and Renewables Forum, featuring senior |
| 0:53.2 | speakers from across the US |
| 0:54.5 | power sector. Join over 450 senior leaders from US power developers, utilities and independent |
| 1:00.5 | power producers who will be coming together to address the industry's biggest challenges. |
| 1:05.3 | From navigating life after tax credits to tackling the load growth boom, discover how the |
| 1:09.6 | energy mix is evolving and how the US |
| 1:11.5 | will meet surging demand for power. |
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| 1:20.5 | Hello and welcome to The Energy Gang, a discussion show from Wood Mackenzie about the fast-changing |
| 1:29.3 | world of energy. I'm Ed Crooks. And on this show today, we're going to be talking about |
| 1:33.9 | data centers, very specifically. We're going to be talking about their demand for power, |
| 1:38.5 | the investment that's needed to meet that demand, and how that investment gets paid for. |
| 1:43.2 | And we have, I think, a unique line-up to discuss that issue. I'm joined by representatives from one of the biggest data center operators, AWS, Amazon Web Services, and also from a leading utility, Nipsco, the Northern Indiana Public Service Company, which is part of the NISRaeus Group. So, it's a great pleasure to welcome to the show, Brandon Oyer, who's the head of America's |
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