A coal-fired power plant in Indiana will receive millions of dollars from the federal government after the Trump administration on June 4 announced $700 million in subsidies to the U.S. coal industry.
Hallador Power Company’s Merom Generating Station, which sits along Sullivan Lake south of Terre Haute, will receive more than $27 million to modernize. The 1080-megawatt plant is one of 12 listed on the U.S. Department of Energy website receiving subsidies under the 1950 Defense Production Act.
“This modernization initiative will maintain operational reliability and promote environmental stewardship,” a DOE news release says.
Hallador Energy, based in Colorado, did not immediately respond to IndyStar’s request for comment.
President Trump announced the subsidies from the Oval Office, saying the federal money will support thousands of jobs and save Americans billions in electricity costs.
“We’re officially invoking the Defense Production Act to save 13 coal plants …” Trump said. “These were incredible plants.”
Congress established the federal law behind the infusion of funds in 1950 during the Korean War. The law gives the president authority to expand the U.S. industrial base.
The news sparked disapproval from several corners.
David Jenkins, president of the national nonprofit Conservatives for Responsible Stewardship, said the “taxpayer dollar handout to the coal industry is boneheaded on steroids,” in a news release.
“This is a total misuse of the Defense Production Act, a giant gift-wrapped payout to subsidize and prop up a flailing industry that can no longer compete in the free market,” said Jenkins, whose group is based in Virginia.
Jill Tauber, a vice president at environmental advocacy group Earthjustice, said in a news release the subsidies are an abuse of emergency powers.
“Our taxpayer dollars should be used to ensure clean air and water for all Americans and bring down rising electricity costs, not for fossil fuel handouts,” Tauber said.
Merom coal plant recently partnered with Indiana utility
The Merom coal-fired power plant was set to close in 2023 but was kept running to provide energy for a cryptocurrency mining operation.
Hallador, which also operates coal mining operations in Indiana, purchased the plant in 2022.
Hallador Power Company, on May 1, 2026, signed an agreement to sell electricity from the Merom plant to NIPSCO Generation, a subsidiary of the investor-owned utility that was established to power data centers in northern Indiana.
The agreement will last 12 years from Sept. 1, 2028, through May 31, 2040.
Trump and officials tout affordability
Trump and his senior staff said the subsidies are meant to ensure Americans have access to affordable power.
U.S. Secretary of Energy Chris Wright was in the Oval Office with other U.S. leaders during the announcement and said the Trump administration is going to “reindustrialize America.”
Since taking office last year, the Trump administration has worked to boost the coal industry, Wright said. Trump’s administration issued a series of orders since December 2025 preventing a number of coal-fired power plants around the country from closing.
“Through [Trump’s] authority at the DOE, we were able to force keeping open six coal plants,” Wright said.
Two of those plants are in Indiana.
Trump in December issued emergency orders to keep the coal plants in Indiana open. NIPSCO’s R. M. Schahfer Generating Station in Wheatfield and CenterPoint Energy’s F.B. Culley Station in Warrick County remain open under the orders.
The Schahfer plant, however, has been offline since February due to repairs, according to testimony from NIPSCO during a May 19 forum hosted by the Indiana Utility Regulatory Commission.
A series of federal and state initiatives have been aimed at supporting the coal industry. Wright said it is hard to overstate the magnitude of these efforts, adding coal has been “maligned for far too long.”
“Thankfully, because of the ‘One Big Beautiful bill,’ these fantastic congressmen sitting around me and governors, without that legislation, we wouldn’t have the money and the Defense Production Act authority to keep open so many plants,” Wright said.
Karl Schneider is an IndyStar environment reporter. You can reach him at karl.schneider@indystar.com. Follow him on Twitter @karlstartswithk
IndyStar’s environmental reporting project is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.
This article originally appeared on Indianapolis Star: Indiana coal plant with data center ties gets $27M federal subsidy
Reporting by Karl Schneider, Indianapolis Star / Indianapolis Star
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By Karl Schneider, Indianapolis Star | USA TODAY Network
