NiSource Inc. (NYSE: NI) announced a new long-term energy agreement with Microsoft covering the company's previously announced northwest Indiana data center campus, a deal the utility says will increase customer savings while supporting economic growth across the region.

Deal expands expected customer savings to USD 1.75 billion

Under the agreement, approximately 1,100 MW of new generation resources will be added under a 20-year term beginning in 2028, when Microsoft is expected to begin taking electric service.

The deal builds on previously disclosed expected customer savings of USD 1.4 billion over the life of data center customer contracts, increasing total expected savings for Northern Indiana Public Service Company LLC (NIPSCO) electric customers to approximately USD 1.75 billion, equating to as much as USD 140 per customer annually.

GenCo structure designed to protect existing customers

Through NiSource Generation Company LLC (GenCo), the company is serving new large-load customers under a structure it describes as designed to protect existing NIPSCO electric customers from incremental costs while returning value from large-load customers' use of the existing electric system. Large-load customers fully fund the generation and infrastructure required to serve their needs.

Under the Microsoft agreement, Microsoft fully funds all generation and transmission required to serve its load. NIPSCO and GenCo will provide transmission and generation infrastructure to ensure adequate assets to serve Microsoft's data center and NIPSCO's customers while providing what the company describes as a safe, reliable, and coordinated power supply.

These assets will also upgrade NIPSCO's electric transmission system, improving grid reliability and resilience for customers in Indiana, while ensuring current residential and business customers are protected from the costs of serving the data center.

Leaders on affordability and economic development

"Affordability is not separate from economic development; it is a key pillar of our GenCo model," said NiSource President and CEO Lloyd Yates. "This agreement reflects the balanced approach we believe is needed for Indiana to attract significant investment and create long-term jobs. Our priority remains clear: protect existing customers, support safe and reliable service, and ensure that new growth contributes tangible benefits to the communities we serve. When structured correctly, economic development can be part of the affordability solution."

On the Microsoft side, Jeff Riles, Senior Director of Energy Markets at Microsoft, said the company has always been committed to paying its own way and identifying long-term solutions to ensure that its data centers do not increase electricity prices for other ratepayers. "Our partnership with NIPSCO will not only support continued growth and protect ratepayers but also help to support a reliable grid for years to come that the communities of Northern Indiana rely on," Riles said.

600 MW of battery storage contracted

In connection with the Microsoft agreement, GenCo has contracted 600 MW of battery storage under a long-term tolling agreement. The facility will be developed and constructed by an affiliate of AGP Group.

This resource will be added to GenCo's pool resource assets, which are designed to serve multiple large-load customers.

Economic growth framing

NiSource frames the agreement as fueling economic growth in Indiana, creating jobs, expanding the tax base, and building a skilled workforce to support long-term innovation and prosperity.

The company also says the deal reinforces Indiana's position as a leader through its strategic collaboration with Microsoft.

More details coming on earnings call

NiSource said further operational and financial details on the agreement and its broader approach to supporting data center growth will be shared on the company's third quarter earnings call.

Additional information is available on the Investors section of the company's website, which the company uses along with its social media channels to disseminate important information to investors.

About NiSource

NiSource Inc. is one of the largest fully regulated utility companies in the United States, serving approximately 3.3 million natural gas customers and 500,000 electric customers across six states through its local Columbia Gas and NIPSCO brands.

The company's approximately 7,700 employees are charged with delivering safe, reliable energy that drives value to customers. NiSource is a member of the Dow Jones Sustainability - North America Index and appears on Forbes lists of America's Best Employers for Women and Diversity.

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