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    NI
    Earnings call· Jun 2026(Q2 FY26)

    NISOURCE Q2 FY26 earnings call NI

    Aug 5, 2026 Source

    Executive summary

    NiSource Q2 FY26 — Strong Data Center Growth and Reaffirmed Guidance

    NiSource delivered Q2 FY26 adjusted EPS of $0.16, bringing year-to-date to $1.22, reaffirming full-year guidance and long-term growth targets. The company is actively advancing its data center strategy, securing regulatory approvals for Amazon and Alphabet agreements, which are projected to deliver significant customer bill relief. While facing increased O&M costs and a recent IURC order impacting gas modernization recovery, management remains confident in its capital plan and ability to execute its strategy, emphasizing economic development as a key to affordability.

    Highlights

    5

    • Reaffirmed 2026 consolidated adjusted EPS guidance range of $2.02 to $2.07 per share.

    • Reaffirmed annual base plan adjusted EPS growth rate of 6% to 8% through 2030.

    • Reaffirmed consolidated adjusted EPS compound annual growth rate of 9% to 10% from 2026 through 2033.

    • Data center strategy expected to provide approximately $1.4 billion in bill reductions for existing NIPSCO electric customers.

    • Robust large load customer demand pipeline with 3 GW in active strategic negotiations and line of sight to 2 GW additional potential.

    Concerns

    4

    • Q2 consolidated adjusted EPS of $0.16, down from $0.22 in the same period last year.

    • Higher O&M reflecting increased storm activity and elevated expense for workforce continuity during union negotiations.

    • IURC order regarding NIPSCO's gas modernization investments requires better demonstration of benefits for recovery.

    • Third federal order requiring continued operation of the Shaker coal plant, necessitating FERC Section 205 filing for cost recovery.

    Guidance & targets

    5
    CategoryTargetConfidence
    Consolidated Adjusted EPS
    $2.02 to $2.07 per share
    high materiality
    High
    Annual Base Plan Adjusted EPS Growth Rate
    6% to 8%
    high materiality
    High
    Consolidated Adjusted EPS Compound Annual Growth Rate
    9% to 10%
    high materiality
    High
    Base Plan Rate Base Growth
    8% to 10%
    high materiality
    High
    Consolidated Rate Base Growth
    9% to 11%
    high materiality
    High

    Operational metrics

    11
    Consolidated Adjusted EPS
    $0.16down from $0.22 last year
    Q2 FY26

    Second quarter consolidated adjusted EPS.

    Year-to-Date Consolidated Adjusted EPS
    $1.22increase of $0.03 vs. same period last year
    YTD Q2 FY26

    Year-to-date consolidated adjusted EPS.

    Cost Optimization Initiatives
    over $40 million
    FY26

    Line of sight to cost optimization initiatives across the business, expected to improve cost structure beyond 2026.

    Customer Bill Reductions from Data Centers
    $1.4 billion
    Over contract terms

    Expected bill reductions for existing NIPSCO electric customers from Amazon and Alphabet agreements.

    Average Residential Customer Annual Bill Savings
    up to $124
    Annually

    Equates to roughly 1 month of an electric bill for an average residential customer.

    Large Load Customer Demand Pipeline - Active Strategic Negotiations
    3 GW
    Current

    Demand from large load customers remains robust.

    Large Load Customer Demand Pipeline - Additional Potential
    2 GW
    Current

    Line of sight to additional potential customers beyond active negotiations.

    Total Large Load Customer Demand Pipeline
    9 GW
    Current

    Total current pipeline, with potential to expand beyond this.

    Amazon Contract Amendment Increase
    400 MW
    Current

    Amendments increased Amazon's contracted load, already incorporated in near and long-term guidance.

    FFO to Debt Target
    14% to 16%
    Each year of plan

    Commitment to maintaining FFO to debt ratio.

    Annual Equity Issuance
    $400 million to $600 million
    Annually

    Part of balanced mix of financing, including minority interest contributions.

    Industry KPIs

    5
    MetricValueDetails
    Adjusted operating EPS$0.16USD
    Multi year capital plan$21 billionUSD
    Regulatory rate base growth8% to 10%%
    Allowed ROE equity layer rate cases—
    Combined electric gas framework mandates—

    Orderbook & backlog

    2
    Large Load Customer Demand Pipeline - Active Strategic Negotiations3 GWQ2 FY26

    Active strategic negotiations, aligned with customer protection, commercial requirements, and return expectations.

    Large Load Customer Demand Pipeline - Additional Potential2 GWQ2 FY26

    Line of sight to additional potential customers beyond active strategic negotiations.

    Deals & partnerships

    3
    AmazonSpecial contract and related power purchase agreement for data center servicesOver contract terms

    IURC approved the original Amazon special contract, related PPA, and generation resources. Expedited procedural schedules of 90-120 days for future agreements were also supported.

    AmazonAmendment to existing data center electric service agreement and associated PPA

    Filed NIPSCO's request for approval of amendments to increase Amazon's contracted load by 400 MW. Seeking final order by November.

    AlphabetPartnership for data center services

    IURC approval received in July. Project on track for energization this summer, with load expected to ramp to full capacity by 2030.

    Capital programs

    3
    5-year Capital Investment Outlookunderway$21 billion

    Benefit: Base business investment

    Unchanged 5-year capital investment outlook for base business.

    5-year Capital Investment Outlook - Upside Opportunitiesunderway$2 billion

    Benefit: Upside opportunities

    Unchanged 5-year capital investment outlook for upside opportunities, largely attributed to generation, gas AMI, FEMSA, economic development, and T&D.

    GenCo Capital Investmentunderway$7.6 billion

    Benefit: Supporting data center customers

    Unchanged GenCo capital investment supporting data center customers.

    Risks & headwinds

    4
    IURC order on NIPSCO gas modernization investmentsOngoing

    Requires better demonstration of benefits for cost recovery

    Mitigation: Will focus on demonstrating benefits and pursue recovery through MCA, base rate cases, or other trackers.

    Continued operation of Shaker coal plantOngoing

    Third federal order requiring continued operation

    Mitigation: Pursuing recovery of associated compliance costs through a FERC Section 205 filing, seeking approval within 60 days.

    Higher O&M expensesQ2 FY26

    Reflecting higher-than-usual storm activity and elevated expense to maintain workforce continuity during union negotiations

    Mitigation: Implementing cost optimization initiatives (over $40 million in FY26) and process improvements.

    Affordability discussions in IndianaAugust 7 Technical Conference

    Commission evaluating a range of issues, including bill transparency and regulatory framework refinements

    Mitigation: Engaging collaboratively with the commission, emphasizing economic development and customer savings from GenCo strategy as solutions.

    What to watch in Q3 FY26

    5

    August 7 Technical Conference Outcome

    Next quarter
    CurrentScheduled for August 7
    TargetBalanced and collaborative findings on ROEs and trackers

    Why it matters

    The outcome will inform future regulatory proceedings and potential changes to the regulatory framework in Indiana, impacting investment recovery and rate cases.

    We're encouraged by the collaborative and constructive nature of the discussion scheduled to begin on August 7. We expect the process to remain balanced and focused on enhancing customer affordability through economic development, greater build transparency and thoughtful targeted refinements to the state's regulatory framework.

    Q&A highlights

    6

    How does the recent T-disk order impact tracker recovery and multi-year rate plan risk, especially considering the affordability backdrop?

    Management is still evaluating the order but believes Indiana remains a constructive regulatory environment. The decision doesn't preclude future recovery of investments through other trackers or rate cases, emphasizing the need to demonstrate investment benefits. They are confident in the commission's constructive approach and will engage on affordability issues.

    “this decision is that really a reflection of the broader regulatory environment in Indiana. We believe Indiana will continue to be a constructive regulatory environment for NIPSCO.”

    asked by Julien Dumoulin-Smith · answered by Lloyd Yates

    2 min read6 chapters

    Detailed Narrative

    01

    Data Center Strategy and Economic Development

    NiSource's data center strategy is a key growth platform, expected to return $1.4 billion in savings to customers over contract lives. The company has secured IURC approvals for Amazon and Alphabet data center agreements, reinforcing constructive regulatory support. Demand from large load customers remains robust, with 3 GW in active strategic negotiations and line of sight to an additional 2 GW, with further opportunities beyond the current 9 GW pipeline being assessed. These developments are seen as crucial for economic growth and affordability in their service territories.

    02

    Regulatory Environment and Rate Cases

    The company continues to advance its regulatory agenda, filing rate cases in Virginia and Kentucky to support timely recovery of critical investments. Decisions on both filings are expected by H1 2027. In Indiana, the IURC approved Amazon and Alphabet agreements but issued an order regarding NIPSCO's gas modernization investments, requiring better demonstration of benefits for recovery. Management views Indiana as a constructive regulatory environment and is confident in recovering prudent investments through various mechanisms.

    03

    Operational Excellence and AI Initiatives

    NiSource emphasizes safety and operational improvements, responding effectively to multiple severe weather events in Q2 2026, a year with a record number of tornadoes. Proactive investments in system hardening and AI-powered tools, such as 'Project Apollo' and 'speech analytics and storm response solution,' are enhancing decision-making, improving visibility, and reducing waste across the business. These initiatives contribute to strengthening execution and maintaining service quality.

    04

    Affordability and Customer Bill Relief

    Affordability and customer outcomes are central to the regulatory dialogue. The data center agreements with Amazon and Alphabet are expected to provide approximately $1.4 billion in bill reductions for existing NIPSCO electric customers, equating to up to $124 annually per average residential customer, starting as early as Q4 2026. The company is actively engaged in affordability discussions in Indiana, believing economic development is a key part of the solution, alongside cost optimization initiatives and property tax reductions.

    05

    Capital Investment Plan and Future Opportunities

    NiSource's 5-year capital investment outlook remains unchanged, totaling $21 billion in base business investment, $2 billion in upside opportunities, and $7.6 billion in GenCo capital investment for data centers. The plan is diversified across gas and electric businesses in six states, allowing for flexible capital allocation. Additional investment opportunities, not yet in the base plan, include electric generation for MISO, transmission, system modernization, FEMSA compliance, and advanced metering infrastructure, which are being actively advanced.

    06

    Q2 Financial Performance and Outlook

    Second quarter consolidated adjusted EPS was $0.16, bringing year-to-date to $1.22. While Q2 results were impacted by higher O&M and storm activity, the business remains on track to meet full-year commitments. Earnings growth is expected to be weighted towards the second half⚖️, driven by improved recovery mechanisms, new regulatory activity, and Alphabet's energization. The company also has line of sight to over $40 million in cost optimization initiatives to improve its cost structure and benefit customer rates.

    AI-generated summary of the company’s earnings call. Not investment advice.