NiSource gains on 20-year Microsoft energy agreement for 1,100 MW

MERRILLVILLE, Indiana - NiSource Inc., a major energy provider, has announced a long-term power agreement with Microsoft for their northwest Indiana data center campus. This 20-year deal, set to commence in 2028, will contribute about 1,100 megawatts of new generation resources. Microsoft will cover the entire cost of the generation and transmission infrastructure necessary to fulfill their energy needs.

This substantial investment is expected to result in significant savings for existing Northern Indiana Public Service Company (NIPSCO) electric customers, with anticipated savings of approximately $1.75 billion over the life of the data center contracts, compared to the previously announced $1.4 billion. This increase amounts to a potential annual savings of up to $140 per customer.

The agreement follows NiSource's GenCo model, which allows large-load customers, like Microsoft, to fund the generation and necessary infrastructure for their operations. This model is designed to protect other customers from potential incremental costs and aims to return value from the large-load customers' use of the existing electric system.

Microsoft expressed its commitment to paying for all aspects of the project and ensuring that data center operations do not result in increased electricity prices for other ratepayers.

As part of this agreement, NiSource Generation Company LLC (GenCo) contracted for 600 megawatts of battery storage under a long-term tolling arrangement. This facility, to be developed and constructed by an affiliate of AGP Group, will be integrated into GenCo's pool of resource assets serving multiple large-load customers. NIPSCO and GenCo will jointly provide the transmission and generation infrastructure to serve both Microsoft's data center and NIPSCO's customers, ultimately upgrading NIPSCO's electric transmission system.

NiSource serves approximately 3.3 million natural gas customers and 500,000 electric customers across six states. The company pledged to share further operational and financial details during its third-quarter earnings call.