NiSource Inc.

What they do

NiSource generates, transmits and distributes electricity to approximately 0.5 million customers in 20 northern Indiana counties through NIPSCO, and operates gas distribution utilities through its Columbia Operations segment. NIPSCO owns 3,967 MW of generating capacity, including coal, combined-cycle gas, hydro, wind, and solar facilities, and runs roughly 3,000 circuit miles of transmission. It participates in the MISO transmission and wholesale energy markets and is beginning to contract directly with large data center customers.

Revenue drivers

• NIPSCO Electric — Regulated electric generation, transmission and distribution to about 0.5 million Indiana customers, plus wholesale electric and transmission transactions and customized data center service agreements.
• Columbia Operations — Reportable segment comprising the NiSource Gas Distribution company, including all Columbia Gas distribution companies and related subsidiaries, earning returns through regulated gas delivery rates.
• Data center contracts — Special contracts, including the ADS Contract executed in September 2025 with Amazon Data Services, plus newly approved Amazon and Alphabet agreements expected to deliver $1.4 billion in savings for existing customers.
• Renewable and generation assets — Eight renewable generation facilities in service, three added in 2025, plus multiple PPAs providing approximately 1,200 MW of capacity with contracts expiring between 2038 and 2045.

Recent performance

Second quarter 2026 GAAP net income available to common shareholders was $45.5 million, or $0.09 per diluted share, versus $102.2 million, or $0.22, a year earlier. Non-GAAP adjusted net income was $77.6 million, or $0.16 of consolidated adjusted EPS, versus $101.9 million, or $0.22, in the prior-year quarter. For the first six months of 2026, GAAP net income was $556.2 million, or $1.15 per diluted share, compared with $577.0 million, or $1.22, in the first half of 2025. Full-year 2025 revenue was $6.52 billion and net income was $929.5 million, or $1.95 per diluted share. First-half 2026 operating cash flow was $1,122.7 million versus $1,181.8 million in the prior-year period.

Strategy

Management is executing a $28.6 billion consolidated capital investment plan for 2026-2030, split between $21.0 billion of base capital and $7.6 billion of strategic data center infrastructure. The company reaffirmed 2026 non-GAAP consolidated adjusted EPS guidance of $2.02-$2.07 and a 9%-10% adjusted EPS CAGR from 2026-2033, supporting expected 9%-11% rate base growth. It is funding data center assets, estimated at $9.25-$9.75 billion for existing customers, through customer contract funds, debt, equity, and Blackstone minority investments in NIPSCO Holdings II and Generation Holdings II. NIPSCO's 2024 Integrated Resource Plan continues planned coal retirements, including Michigan City by the end of 2028, while adding gas and renewable resources. Financing activity includes $1.25 billion of senior notes issued in May 2026 and forward sale agreements covering roughly 4.35 million shares.

Risks

• Data center capital and financing needs — The estimated $9.25-$9.75 billion cost of Contract Assets and Pool Resource Assets for existing data center customers, plus any additional contracts, will require significant new debt, equity, or partnership financing to preserve investment grade ratings.
• Coal retirements and reliability orders — The U.S. Secretary of Energy issued a December 2025 emergency order under Federal Power Act section 202(c) requiring the R.M. Schahfer coal facility to keep operating through March 23, 2026, ahead of its planned retirement.
• Regulatory recovery risk — Results depend on IURC and FERC approvals of rate mechanisms, special contracts, and cost recovery, including the 2024 Integrated Resource Plan and data center special contracts.
• Minority interest governance — Blackstone affiliates hold minority interests in NIPSCO Holdings II and a 19.9% interest in Generation Holdings II, with mandatory capital contribution obligations and governance rights set out in the respective LLC agreements.

Outlook

Management reaffirmed 2026 non-GAAP consolidated adjusted EPS guidance of $2.02-$2.07 and a 9%-10% adjusted EPS compound annual growth rate from 2026-2033. It expects the $28.6 billion 2026-2030 capital plan to support 9%-11% rate base growth over that period, with $7.6 billion earmarked for data center infrastructure. The company says it expects to make approximately $600 million of capital investments in Pool Resource Assets initially being developed for data center customers. CEO Lloyd Yates cited regulatory approvals of the Amazon and Alphabet special contracts and continued focus on efficiency initiatives and cost recovery mechanisms.