Can you provide more color on the 3 GW strategic negotiations and specific developments in La Porte County, like those reported with Microsoft?

Management confirmed a joint announcement with Microsoft in 2024 but declined to comment on specific opportunities. They expressed high confidence in the 9 GW data center pipeline and its expansion potential, highlighting the GenCo model's benefits for affordability and job creation. They will disclose information when appropriate. “I do say we like where we are. We're confident that we're going to execute and looking forward to reporting more information to you guys as soon as we have it.”

What are the company's expectations for the August 7 Technical Conference regarding ROEs and trackers?

Management expects balanced and collaborative results from the conference. They anticipate discussions around multi-year rate planning, ROE risk, and bill transparency, aligning with House Bill 1002. They are optimistic about the outcome and will participate cooperatively. “So our expectation is, I think the results will be balanced. They will be collaborative I think that when you look at the affordability report, they looked a lot of build transparency.”

Can you clarify the T-disk order's impact on capital recovery and EPS, specifically if it's a capital tracker for 2027 and the capital amount involved?

Management stated the investment thesis and need for capital are unchanged. They will explore recovery options including the T-disk mechanism, FMCA, and NIPSCO Gas rate cases. They are not reporting any change in CapEx plans or EPS outlook, confident in their flexibility to recover the capital. “We don't believe the CapEx plan is unchanged. We'll look at the flexibility we have across the array of options that we have in Indiana to recover that CapEx. So we're not reporting any change in CapEx plans or any change in EPS outlook as of today.”

NiSource (NI) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Utilities· Aug 5, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Consolidated Adjusted EPS	$2.02 to $2.07 per share high materiality	FY26	High
Annual Base Plan Adjusted EPS Growth Rate	6% to 8% high materiality	Through 2030 · FY30	High
Consolidated Adjusted EPS Compound Annual Growth Rate	9% to 10% high materiality	2026 through 2033 · FY33	High
Base Plan Rate Base Growth	8% to 10% high materiality	Through 2030 · FY30	High
Consolidated Rate Base Growth	9% to 11% high materiality	2026 through 2033 · FY33	High

Orderbook & backlog

Large Load Customer Demand Pipeline - Active Strategic Negotiations 3 GW Q2 FY26

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

Large Load Customer Demand Pipeline - Additional Potential 2 GW Q2 FY26

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

Deals & partnerships

Amazon Special contract and related power purchase agreement for data center services Over 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.

Amazon Amendment 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.

Alphabet Partnership 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

5-year Capital Investment Outlook underway $21 billion

Benefit:Base business investment

Unchanged 5-year capital investment outlook for base business.

5-year Capital Investment Outlook - Upside Opportunities underway $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 Investment underway $7.6 billion

Benefit:Supporting data center customers

Unchanged GenCo capital investment supporting data center customers.

Risks & headwinds

IURC order on NIPSCO gas modernization investments Ongoing

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 plant Ongoing

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 expenses Q2 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 Indiana August 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

August 7 Technical Conference Outcome

Next quarter

Current Scheduled for August 7

Target Balanced 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.

Find out whether NI delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.