NiSource (NYSE:NI) reported first-quarter financial results on Wednesday. The transcript from the company's first-quarter earnings call has been provided below.

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Summary

NiSource reported strong first quarter 2026 financial performance with an adjusted EPS of $1.06, making up 52% of the projected midpoint earnings guidance for the year.

The company reaffirmed its 2026 consolidated adjusted EPS guidance of $2.02 to $2.07 per share and increased its long-term EPS CAGR target to 9-10% through 2033.

Strategic initiatives include partnerships with Amazon and Alphabet to expand energy capacity, providing significant cost savings to customers and promoting economic growth in Indiana.

Operational highlights include the safest first quarter on record for employee injuries and significant advancements in infrastructure modernization and risk reduction programs.

Management emphasized the importance of collaborative regulatory relationships and leveraging AI to enhance operational efficiency.

The company is focused on expanding its Genco model to support new data centers, with ongoing strategic negotiations for up to 3 gigawatts of capacity.

NiSource plans to invest approximately $21 billion in its base business over five years, with an additional $7.6 billion earmarked for Genco and data center-related projects.

Full Transcript

OPERATOR

Vice President and group president of NiSource Utilities, Melody Birmingham. Today we'll review NiSource's financial performance for the first quarter and share updates on operations strategy and growth drivers. Then we'll open the call for your questions. Slides for today's call are available in the Investor Relations section of our website. Some statements made during this presentation will be forward looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements. Information concerning such risks and uncertainties is included in the Risk Factors and MDA sections of our periodic SEC filings. Additionally, some statements made on this call relate to non GAAP financial measures. Please refer to the supplemental slides, segment information and full Financial Schedules for information

Lloyd

on the most directly comparable GAAP measure and a reconciliation of these measures. With that, I'll turn the call over to Lloyd. Thank you Durgesh and good morning everyone. We appreciate you joining us today. I'll begin on slide 3 at NiSource, our mission is to deliver safe, reliable and competitive energy that drives value for our customers. Our disciplined capital deployment, operational excellence and constructive regulatory frameworks remain the foundation of our business strategy. The first quarter of 2026 reflect continued execution of this strategy supported by a robust regulatory foundation, ongoing operational improvements and a commitment to our customers. NiSource's value proposition is anchored in regulated utility operations across six highly constructive jurisdictions, providing diversification in both asset mix and regulatory environment. As we continue to modernize our electric and gas infrastructure, we are delivering on our core objectives by advancing innovative solutions such as nipsco, genco, partnering with Amazon and now Alphabet to recognize higher and faster savings to customers. In addition to the announcements made a few weeks ago, I am pleased to share another expansion, an incremental 400 megawatts of capacity serving Amazon. Given the present inflationary climate, the value of these partnerships is tremendous, unlocking cost savings totaling approximately $1.4 billion for our existing customers over the next 15 years. Moving to Slide 4 collaborative regulatory and stakeholder relationships while operating with excellence paves the way for NiSource to execute on its financial commitments. NiSource continues to work alongside stakeholders through regulatory processes to ensure resources are available for critical investments to protect our system, serve our customers reliably and grow local economies, all while balancing the impact these investments have on our customers. Working collaboratively with stakeholders, we're able to support enhanced rate making practices in our jurisdictions and advance legislative priorities such as Indiana House Bill 1002 and Ohio Senate Bill 103 to help ensure fair, balanced outcomes for our customers and our communities. A key tenet to our operating plan is to work efficiently and improve our systems and processes, leveraging AI and technological upgrades to improve both efficiency and reliability for our customers. Today we reported first quarter 2026 consolidated adjusted EPS of $1.06, which accounts for 52% of our projected midpoint earnings guidance. We are reaffirming our 2026 consolidated adjusted EPS guidance of $2.02 to $2.07 per share and we are increasing our consolidated adjusted EPS CAGR 100 basis points for 2023 to 2033 to 9 to 10% towards the high end of that range through 2030, driven by the robust portfolio of investment opportunities supporting data centers Turning to Slide 5 at NiSource, safety remains our top priority and the foundation of operational excellence, and our first quarter results reflect the strength of that commitment. We delivered the safest first quarter on record for employee injuries dating back to 2016 through strong winter preparedness and disciplined field execution. We also continue to advance our proactive risk reduction programs across the system, completing over 11,000 miles of leak survey in the quarter, helping identify and mitigate 113 large volume leaks well above plan. We exceeded our targets for both electric pole inspections and replacements for the quarter and maintained strong execution in our crossboard program, reinforcing the long term resilience of our infrastructure., reinforcing the long term resilience of our infrastructure. These results underscore the operational discipline of our teams and our continued commitment to delivering safe, reliable service across our footprint. The Apollo Continuous Improvement Team is focused on boosting operational efficiency via programs like Fleet Focus to reduce idling and right size fleets, streamlining IT applications and using AI to improve permitting, invoicing and locate screening. AI and analytics are improving NiSource's operations via the Work Management Intelligence platform. Enhanced spend visibility and supply chain enables faster procurement While AI contract tools have increased productivity over 20%, these solutions are expanding to customer and back office functions for greater efficiency and service quality. We continue to engage proactively with stakeholders and regulators in all jurisdictions as shown on slide 6. Our regulatory strategy is informed by thoughtful, careful consideration of customer affordability and cost pressures, ensuring we proceed in a manner that balances these concerns. As a strategic organization, we adapt to evolving sensitivities, ensuring we operate with both efficiency and effectiveness as we navigate new opportunities and challenges. We remain committed to engaging transparently throughout the regulatory process, providing timely updates to stakeholders on our investment plans and priorities only as they advance through proper channels. This approach ensures all parties are informed by respecting regulatory protocols and supporting Safe, Reliable Service Leveraging riders as consistently practiced in Ohio and other states enables us to address affordability issues for customers by minimizing the need for frequent rate cases and by better timing capital allocation and recovery. This method supports continued investment in our infrastructure, maintaining safety and reliability while offering a balanced solution for system integrity and customer interest. We also support legislation such as Indiana House Bill1200 that adopts measures like levelized billing to protect customers from bill fluctuations caused by weather related usage spikes. In Pennsylvania, we have flexibility in our plan to address system modernization at a pace and method of recovery which reflects stakeholders feedback while also ensuring service can be safely delivered. As we prioritize supporting our communities through capital investment that ensure safe, reliable service and foster economic development, we are in active dialogue with stakeholders to highlight the value of our partnership and investments. In March, NIPSCO has issued a second federal order requiring the continued operation of our Shaffer Coal plant. Our plan incorporates flexibility to accommodate this directive, reflecting our commitment to full regulatory compliance while maintaining customer affordability, financial stability and reliability. We're finding ways to drive direct savings to our customers by entering into strategic partnerships with data center customers by leveraging the genco regulatory model. Our agreements with Alphabet and Amazon are expected to deliver annual savings up to $124 per year for residential customers, offering greater benefits that now accelerated timeline than initially forecasted. Our commitment remains to transparently communicate with all stakeholders, providing timely updates on regulatory outcomes, project development and anticipated benefits for both customers and communities. Our priority is delivering sustainable solutions that fulfill present and future demands while maintaining our promise of value and excellence in service. With that, I'll turn it over to Michael Lorz to dive deeper into these new data center strategies.

Michael Lorz

Thanks Lloyd. I'll begin on slide 7. Genco was designed for speed and flexibility to support growing energy demand in Northern Indiana while simultaneously achieving cost savings for existing customers and driving economic growth in the communities we serve. NiSource remains steadfast in fulfilling the commitments we have made to stakeholders, regulators and customers, and our ongoing focus ensures that promises made are promises delivered, reflecting our integrity and reliability in every aspect of our operations. We have recently made several advances on this initiative that now support 1.4 billion in customer savings, a new energy infrastructure agreement with Alphabet, two expansions on the Amazon agreement to accelerate and increase our service, and the creation of the pooled resources approach which enables both new and ongoing customer needs, which I'll speak more about shortly. These developments highlight genco's unique, innovative approach to serving data centers by providing speed to market shielding retail customers from investment cost while reducing their monthly bill and strengthening shareholder value. Now on to slide 8. We're excited to be launching a new partnership with Alphabet by employing 340 megawatts of pool resources, including advanced battery solutions and utilizing available market resources. We'll begin service this summer and will expect to achieve full ramp by 2030. This 15 year contract will provide faster access to energy than previously anticipated and accelerate savings benefits to customers. Moving to Slide 9Amazon has continued to emphasize investing in the state of Indiana and we are very pleased to report both an expanded collaboration with Amazon by growing their ultimate investment in the state and also an accelerated timeline to deliver energy to Amazon. Over 400 megawatts of contracted generation will serve the enhancement system enhancements to the existing Amazon data center strategy and will help our retail customers realize savings faster and ultimately grow their total bill Savings up to $124 per customer per year. To support growing large load demand, we are pursuing a pool generation strategy that allows us to efficiently develop and manage a diversified portfolio of resources and accessed through Genco. As shown on slide 10, the pool operates as an aggregation of assets similar to a traditional utility portfolio, matching large load customer demand with a flexible asset base. As we add new data center customers, the asset pool scales accordingly. This initial pool of approximately 800 megawatts is sized to meet load requirements plus applicable reserve margins. The pool provides flexibility to add assets over time as new customers come online. Importantly, the structure ring fences costs and risks so that the costs associated with these large loads are isolated from our broader retail customer base and are recovered through our bilateral contracts while still allowing us to optimize resources cost and system reliability. The incremental and accelerated megawatts of these agreements enabled by genco will increase savings to existing customers. The Alphabet and Amazon investments will also drive economic development by creating new jobs, expanding the tax base and supporting the development of a skilled workforce in Indiana. This positions the state as a leader in technology driven growth and energy infrastructure advancement. This differentiated business model of genco and Pool assets protects and benefits existing customers and enables us to serve new large load customers with speed and flexibility. We have a strong pipeline of opportunities to serve new and existing customers. As shown on slide 11, we are moving customers through the pipeline, progressing them from developing opportunities to strategic negotiations and into signed contracts. Even after securing approximately 800 megawatts of additional capacity to serve Alphabet and Amazon, demand remains robust. With 3 gigawatts of strategic negotiations in line of sight to approximately 2 gigawatts of developing opportunities. We believe there is a well defined path for scaling through sustainable growth and we are committed to pursuing it in a thoughtful and differentiated manner. As demonstrated on slide 12, we are progressing our strategy through achievement of regulatory and construction milestones. The original Amazon contract is pending Commission approval and is expected in June ahead of civil site work later this year and load energization beginning in 27. Upon IURC approval of the Amazon contract settlement, our new Alphabet and Amazon Agreements will be subject to an expedited regulatory review process of 90 to 120 days for approval, resulting in anticipated orders later this year. We are well positioned to execute these projects efficiently, safely and in tandem with our ongoing operations. We remain active in the commercial supply chain to capitalize on available opportunities and our strong quanta partnership positions us to successfully secure skilled labor to execute. Together, these advantages enable us to deliver on our commitments and drive long term value for our customers and stakeholders. With that, I will turn the call over to Sean.

Sean

Thank you Michael and good morning everyone. I'll pick up right where you left off Highlighting the advancements in our data center business the genco business model offers differentiated flexibility to achieve speed to market for new customers, disciplined savings for our existing customers and advancing economic development locally for our communities as we pursue opportunities to serve data center customers. We have designed these strategies with multiple layers of risk protection to safeguard shareholders and existing customers. Rate structures and contractual terms are designed to provide full cost recovery and achieve appropriate risk adjusted returns. Revenue strategies such as minimum demand charges and long term commitments help establish a secure revenue floor. Credit and counterparty risk is managed through credit support requirements by diversifying exposure across highly rated counterparties. Contractual protections allocate construction, operating and market risks to the parties best positioned to manage those. We have embedded risk management into our framework for contracted capacity purchases which are secured, reducing our reliance on future market volatility. Importantly, the structure is designed to ring fence this activity from the core regulated business, preserving balance sheet strength and minimizing volatility, all while enabling disciplined capital deployment into a strategic and growing investment plan. We will continue to be thoughtful of how to best protect all stakeholders while we advance this unprecedented growth opportunity. Now let's focus on slides 13 and 14 in our financial results for the quarter. First quarter consolidated adjusted EPS was $1.06, an $0.08 per share increase versus the $0.98 reported in the same period last year. This 8% year over year increase is primarily driven by regulatory execution across our base business. Recovering capital investments from 2025's capital and regulatory plans by achieving 52% of our midpoint earnings guidance through Q1 NiSource is well positioned to achieve our full year financial objectives shown on slide 15. Our five year capital investment remains unchanged for our base business which includes $21 billion in investments and $2 billion in upside opportunities. Our consolidated plan is now enhanced by $7.6 billion in GenCo and data center related capital. We are actively advancing incremental investment opportunities shown on slide 16 which include electric generation, gas and electric transmission and system modernization, MISO long range transmission projects, PHMSA compliance and advanced metering infrastructure. These initiatives are not part of our base or upside plans, yet they present significant potential for long term value creation. We are actively pursuing commercialization efforts and developing the investment thesis in collaboration with stakeholders to maximize the value generated by these opportunities. Reviewing Slide 17 the NIPSCO system continues to experience significant progress through consistent addition of generation capacity and with a substantial pipeline of projects underway to address growing customer needs and drive diversification in generation technology. Notably, the figure for signed genco contracts has increased, reflecting momentum in securing new agreements that will further strengthen grid reliability and diversification. These advancements underscore NiSource's consistent track record in delivering large scale construction projects, positioning the company to serve a broader customer base, foster data center expansion and and advance its long term strategic goals. Turning to Slide 18, we are reaffirming NiSource's consolidated adjusted EPS guidance range for 2026 of $2.02 to $2.07 per share. We have increased our long term guidance by 100 basis points and expect to deliver 9 to 10% consolidated adjusted EPS compound annual growth through 2033 with performance tracking toward the high end of that range through 2030. We continue to demonstrate disciplined capital deployment with Genco expected to deliver returns that support increasing our earnings growth rate stemming from our projected 9 to 11% rate base growth. This guidance reflects our confidence that in efficiently converting capital into earnings in a manner that is accretive to shareholder value. We have started 2026 strong and are confident in our plan. We are committed to keeping O and M costs steady during the planning period to ensure sustainability and reduce potential risks. Our plan remains highly executable, projecting modest customer demand of less than 1% across all customer classes and which applies conservative financing assumptions through 2030. The regulatory actions completed last year have improved our visibility into 2026 performance, aligning with the regulated revenue increases necessary to achieve our stated guidance range. Looking ahead, Slide 19 reflects our improved outlook for Genco as it is poised for incremental earnings accretion in the future years. We have increased our 2030 Genco EPS guidance, now projecting 25 to 35 cents per share. Our 2033 outlook is also higher as we're now guiding to 40 to 60 cents per share. These updates reflect our strong momentum and confidence in delivering incremental value as a result of our new and enhanced Data center agreements. Slide 20 highlights our five year funding plans. We are reaffirming 14 to 16% FFO to debt in all years of the plan. A balanced mix of cash from operations, new long term debt and 400 to 600 million dollars of equity each year is expected to further strengthen the balance sheet. This reflects a $600 million increase in our CAPEX plan. The financing implications of contracted capacity and a pipeline of investment opportunities that continues to strengthen based on our consistent, disciplined execution de risking the plan while preserving flexibility. We believe a balanced financing plan will help sustain the demand we continue to see across the pipeline and finally slide 21 we've had a strong start to the year and remain on track to achieve our 2026 financial targets. We are confident in our strategy and our ability to deliver sustainable value for our customers and shareholders. NiSource offers a diversified and fully regulated utility with the opportunity to invest in programmatic gas infrastructure and long term energy transition for a fully integrated electric business. We believe continued progress accessing unprecedented energy development and power demand resulting from robust economic development on shoring as well as new data center development truly differentiates the value proposition relative to many alternatives in the marketplace today. And with that operator Please open the line for questions.

OPERATOR

We are now opening the floor for question and answer session. If you'd like to ask a question, please press star followed by one on your telephone keypad. That star followed by one on your telephone keypad. Your first question comes from the line of Char Pereza of Wells Fargo. Your line is now open.

Andrew Kadavian

Hi, thank you. This is actually Andrew Kadavian for Char. Thanks for taking my questions. Can you talk about what you're seeing in discussions with potential customers that has allowed you to firm the 1 to 3 gigawatts in your strategic negotiations bucket to 3 gigawatts.

Lloyd

So yes Andrew, I can talk about that. Today we've signed approximately 4 gigawatts at capacity for data centers. When you couple that with our current engagement with multiple counterparties and strong demand, I think those facts support our confidence in advancing the 3 GW of pipeline opportunities that are in active negotiations. I think you also add to that the genco model represents a compelling Opportunity and a competitive advantage to serve these large scale growth while benefiting our existing customer base. So we're very confident in our ability to execute on that.

Andrew Kadavian

Thanks. And then with only 600 million of capex to serve the I guess incremental 1 gigawatt of hyperscaler load, it's a pretty capital light construct. So with the market capacity purchases you're making, how do you earn on those purchases? Can you give us some detail or color on how that flow through to earnings?

Lloyd

Sean, you want to address that?

Sean

Yeah. So as we think about the way that NiSource and really Genco can create value for stakeholders, we look at the total amount of capacity that we're going to be able to generate, what the cost is for that and what an appropriate risk adjusted return is when you net those two out, that's what creates the earnings per share as you mentioned. Some of that is through capacity purchases, some of that will be through constructing assets and the net of that is what we guide to in the genco guidance.

Andrew Kadavian

Thank you. I'll leave it there.

OPERATOR

Your next question comes from the line of Bill Appicelli of ubs. Your line is now open.

Bill Appicelli

Hey, good morning. Just, you know, maybe along the similar lines of the question I was just asked but I mean when we think about the incremental needs here to service, what could be part of the additional megawatts to come under strategic negotiations? I guess how do we think about that resource mix in terms of whether it's additional generation to be built and then related to that? I guess how do we think about the incremental earnings benefit of this? Is this more linear? Does the accretion improve as you scale the size of the genco?

Sean

Yeah, I don't think it's linear. I do think it's project specific and largely driven by what a customer needs and when they need it by from there we tried to find the most attractive resource that's appropriate to serve that demand both short term and long term and the most reasonable cost to achieve that on a long term risk adjusted basis.

Bill Appicelli

Okay, so I guess you'll just sort of update that, you know, as you announce. It'll be to your point bespoke for each deal. Right. In terms of what the actual earnings benefit will be?

Sean

That is correct. The genco model allows us to provide bespoke solutions to our counterparties and as we add to that pool we'll make it clear that we're adding that capacity in which custom and how we're serving that customer.

Bill Appicelli

Okay. And then Just, you know, under the framework of the affordability, you've increased customer benefits here today. I mean, you know, how is that resonating with the customer base, you know, with the sort of the stakeholders both on the political and regulatory front? Maybe just speak to that if this is being well received or how should we think about, you know, impacts here?

Lloyd

We believe it's being well received, not just the customer base, but the regulators think about. I mean, again, we keep talking about the benefits of the GenCo model, but we're going to provide $1.4 billion of benefit back to customers, which is $124 per year of real money going back to customers. At the same time, you know, we're building in state of Indiana, we're creating jobs and benefit and the communities we serve. So we think that this model is a competitive advantage, is compelling and being well received by all of our active stakeholders.

Bill Appicelli

Okay, I'll leave it there. Thank you.

OPERATOR

Your next question comes from the line of Steve Leishman of Wolf Research. Your line is now open.

Steve Leishman

Hey, good morning. Morning. So I guess what's, what's kind of interesting with these two recent deals is you're providing kind of time to power availability, which obviously is hard to find, and people, people pay for how much more timely like time to power the next few years access could you feasibly do? Because that clearly is something I think a lot of customers want,

Michael Lorz

So we haven't disclosed like the exact amounts of what we could do, but I will say that we continue to be very active in the commercial supply chain and we are, and we are focused on that speed to power. So. So we try to ensure that the capabilities, the resources, the constructs are there. Everything from site development through to execution. So what I would say is at this point though, we're very focused on making sure we execute these effectively. We are also very focused on continuing to execute on that speed to power in this near term timeframe to be able to provide counterparties with what they need and feel strongly about. That's why we feel strongly about our, you know, 3 gigawatts in our strategic negotiations.

Steve Leishman

Okay. And then just the 9 gigawatt total. Not to get too dreamy here, but just is that some kind of limit on the opportunity in the region or, you know, maybe just on your transmission system or is that something that could actually be larger over time?

Michael Lorz

So I wouldn't view it as a limit. What I would view it as is we're very disciplined and methodical in how we proceed through our Pipeline and negotiations. We like to provide strong confidence in our execution and in our capabilities. And we will seek to maximize the opportunity that this can provide to stakeholders and our shareholders and our customers with what we do. And I would say that Indiana is a very strong territory by which to continue to develop opportunities. Given the geographics of the area, given its proximity to large centers like Chicago, given the transmission system backbone that we've discussed before, that's 345 with lots of redundancy, the gas supply situation. So I would look at that nine gig as what we are focused on in that pipeline, but not what the ultimate opportunity might be.

Steve Leishman

Okay. And then switching gears, have to ask just on the recent governor letter to utilities in Pennsylvania and what you're, how you're interpreting that and what does it mean for your future rate case strategy and investment in Pennsylvania, if anything?

Lloyd

So Steve, right now I'd say we're actively engaged in Pennsylvania with all the stakeholders as we develop a response to Governor Shapiro's letter. You know, if you think about last year, we came out of December and we had a very constructive regulatory outcome for a rate case and we're evaluating future regulatory mechanisms such as looking at our trackers to support future capital investment. So we do have mechanisms that can support future tracker investments. Our five year financial plan that we have is built with a lot of flexibility and that allows us to adopt to both opportunities and challenges. So as we work with those stakeholders to address the governor's concerns, we will continue to emphasize the importance of safety and federal and state requirements and investments that we need to make to operate the system reliably. At the same time we want to highlight the need to maintain a strong balance sheet to support those critical investments and then adjust accordingly. So it's something that me and the entire team are engaged in making sure that we're on top of this thing. We've seen and had great experience in Pennsylvania as a constructive regulatory state and we're going to try and understand what this means so that we can maintain and run our system efficiently and effectively.

Steve Leishman

Thank you.

OPERATOR

Your next question comes from the line of Julianne Demolin Smith of Jefferies. Your line is now open.

Julianne Demolin Smith

Hey, good morning team. Thank you guys very much for the time. I appreciate it. Nicely done. Yet again, I gotta say good morning. Good morning, Lloyd. Maybe just to pick it up on the earnings composition question, I know not keen to disclose too much on this $0.18 move up and guide, but how do you think about bifurcating that between sort of the quote, unquote rate base and own gen portion versus contracts then maybe the more critical question here is how do you think about the ability to own more of that gen over time? You talk here about this 800 megawatt pool. Is that something that over time you effectively would in house, if that's the term and is that kind of another element of compounding growth maybe beyond the 2030-2033 period? How do you think about the evolution of your ability to own the related gen?

Lloyd

I think that our Sean mentioned earlier we get more customers and build what I'll call provide bespoke generation solutions. Now we will own some of that. We will own probably a significant amount of that generation and try to provide what try to provide the best solution to the customers as we negotiate these contracts. Michael, you want to add to that at all? Yeah. What I would add to it is it might be helpful to talk just a little bit more about when we talk about bespoke solutions. We ensured within the Genco model that we have the capability to serve 3,000 megawatt increments and also serve 300 megawatt increments.

Michael Lorz

And in doing that we've created the capacity to do you know, those bespoke solutions that can meet those the pool resources that we have. That is the mechanism by which we will own all these resources that provided to nipsco to meet the resource adequacy. So our druthers and our focus has been to not have commodity risk or market exposure. So when we go out we are getting contracted generation capacity one way or the other. I would look at it as we own effectively all of it. You know, when we're doing it, we are bringing it into that portfolio to serve those customers in a holistic fashion with speed to market. Yeah.

Sean

Then the only piece I'd add to this Julian would be because it is not functioning directly off of a return on rate based model. The accretion dilution that we guide to both short term and long term and how we think about the potential for value creation over time doesn't necessarily require us to own it. It really helps us best monetize the capacity attributes in a way that's attractive to stakeholders both to our retail customers as we're exemplifying with the 1.4 billion in savings as well as to our shareholders as we expect really return on and of the cost of those assets over the life of the customer agreements and making sure that that financial stability maintains.

Julianne Demolin Smith

Got it. Excellent. And then just to needle a little bit on this 3 gigawatt strategic negotiation here. How should we think about the gating items for conversion there? Is it dependent at this point on getting the approvals of Amazon and now Alphabet here? Is there some sort of, you know, serial nature to just get putting this in front of the IE ORC, etc. Or is it not necessarily precluded as far as you would set expectations? Obviously you've, you've delivered well against these targets and seems like you still got a ways to go against that. 3 gigawatts too.

Lloyd

As I've said in the past, these are complex transactions and these negotiations take time. I wouldn't limit these to just Amazon and Alphabet. I said earlier in the script and Michael said it, that we have, we're talking to multiple counterparties here and I think it takes, just takes time to get these things done and to get them and to get them done correctly. We've set our organization up and structured ourselves to execute more efficiently and more effectively. And that gives me a whole lot more confidence that we're going to get these done.

Julianne Demolin Smith

Got it. Excellent. And just quickly, on the atm, how much latitude do you have for more deals now that you raise the ATM range or is that effectively utilized the capex increase here? I suspect you have some latitude.

Sean

Yeah, we absolutely have a lot of latitude. And our financing plan, the 400 to 600 million dollars annually that we disclosed today is already contempl filed ATM structure. Therefore we've got the capacity to handle that type of volume without impact.

Julianne Demolin Smith

Thanks, John. Appreciate it, guys. See you soon.

OPERATOR

Your next question comes from the line of Eli Johnson of JP Morgan. Your line is now open.

Eli Johnson

Hey, good morning. Just wanted to circle back a bit to the speed to market theme that was touched on earlier. Maybe within the context of the resource mix for the pooled strategy. You know, we've seen you use a mix thus far, but is there sort of a resource priority list that you have, you know, just in terms of executing that speed to market and then maybe more broadly, do you have a, an update on where you are in terms of land and equipment acquired for those new assets that we're adding?

Michael Lorz

Thanks, Michael. What I would say on the speed to market aspect is other than we try, you know, we make sure that we are meeting our reliability MISO accreditation I URC requirements and what we need to ensure that we're good stewards of the system and what we're doing for our customer base. We try to make sure we are deploying resources and capabilities across a broad spectrum of resources and bringing them into that pool and bringing them into that resource mix to do just what you said, which is to ensure speed to market and ensure the capability to be able to provide what the customers need and what our shareholders need in returns with those. So it's not a prioritization of assets within that asset pool. It's really making sure that they meet that reliability requirements. They meet the necessity for being able to have the time to time to market, speed to market with the customers and meeting the MISO and accreditation. And we are very active in that. We are very consistent in that. And I think what you're seeing here and how we're growing the portfolio from having CCGTs, having batteries, adding in additional contract to generation assets being, you know, things that are, you know, confirming market capabilities and resources is that continued mix will continue to grow and we will add to that.

Eli Johnson

Understood. Thanks. And then maybe just thinking about the upcoming URC approval process, I know you have a very helpful slide in your deck walking through some timeline milestones, but can you just kind of provide increased color on what the next steps are procedurally and the, you know, the timeline for some of the review coming up and maybe just add on to that? I know there's been some discussion of development in Laporte county where there's, you know, Microsoft has been active. So those have come out in the IRC filings as well. Any color there would be helpful. Thanks.

Michael Lorz

Go ahead, Michael. So what I would say is slide 12, I think is a good representative slide of the progression and the progress that we have made through our regulatory process and how we're really executing on this in a defined, sustainable and methodical manner. And you can see that as we've gone through it, it includes everything from like the zoning application approval in February, the, you know, the acceleration amendment, you know, filed with the iurc, as we mentioned before, if the settlement is approved, that that would lead to an expedited approval process of these special contracts, which is 90 to 120 days, which just highlights another advantage of how we've structured this genco model and the capabilities around it. But we feel, you know, we have a great regulatory team, that regulatory team is working these through. We feel confident relative to these approvals and moving them through the process. And we will just continue to execute on that. And you can see the dates associated with. We expect those by first half of 2026 and then moving into the actual construction phases.

Eli Johnson

All right, thanks.

OPERATOR

Your next question comes from the line of Nick Amiguchi of Evercore isi. Your line is now open.

Nick Amiguchi

Hey, good morning guys. How's everyone? A couple of quick ones given kind of the timelines and I think you guys might have just touched upon it. But I just want to kind of clarify. Just given the timelines and we kind of have the data center pipeline through 2035, I guess, and then the. It seems like there's the exponential approval process could aim this. But I just want to be clear. When we think about Those up to 2 gigawatts of developing opportunities kind of later data, like what. How quickly would we need to see those be brought into the fold of the pipeline or into kind of actually like signed capacity for them to actually be COD by 2035.

Lloyd

So I think that those are. Those 2 gigawatts are what we call developing opportunities. I think that how quickly they get bought into strategic negotiations kind of remains to be seen. What I'll tell you is there's significant demand in the Indiana region for hyperscalers and data centers. I think as we think about more, more developmental opportunities up there, we'll study things like that. So there's no real timeline for how quickly they get bought in. We have a long queue and we have a lot of work to do. That demand is high and we'll get to it as our resources and equipment and things allow us to.

Michael Lorz

And as we mentioned earlier, we'll continue that discipline methodology. And as we discussed with the strategic negotiations and as was mentioned in the question prior around Microsoft and the fact that that land in Laporte, we continue to work those opportunities in just a very methodical manner. And, and as we do, we will continue to update like which gigawatts are in which portion of that pipeline of the portfolio.

Nick Amiguchi

Thanks. And then just wanted to clarify too. So there's no. In the increasing guidance, there's. There's no consideration of the 3 GW in strategic negotiations embedded within that. Correct. It's just that. That is purely up.

Lloyd

That is correct. Great.

Nick Amiguchi

Thanks guys.

OPERATOR

Your next question comes from the line of Paul Fremont of Wydenberg. Your line is now open.

Paul Fremont

Thanks. Great update. I guess my question is I'd like to maybe better understand maybe the role of Shaffer generation potentially under a PPA in that 800 megawatt pool. And do you have sort of the ability for. To shift the operating costs that are now being picked up by retail customers to the data center customers?

Lloyd

So today, the way we look at the Shaffer, we, as I mentioned in my script, the second 202 order and we consider The Shaffer units part of our retail customer capacity. Our goal here is to continue to recover costs through the FERC process and has been no real consideration today of shifting that over into a ppa.

Paul Fremont

Okay, so there the pool of resources doesn't include any surplus generation that you're now getting from the Shaffer from the Shaffer plant.

Lloyd

That is correct. Shaffer is not a genco asset. Shaffer is a nipsco asset. So it is not part of the pool and it is not part of those resources. Yeah, it's a regulated asset. And there's no. And there's no PPA connection either to genco. That's correct. Shapers. There are no Nipsco base assets that are serving our existing base customers that are within the pool or PPA to the pool.

Paul Fremont

And then I guess my next question is how long would it take to supply generation to prospective new customers? And I guess that would include these two customers or the expansion of AWS and Alphabet.

Lloyd

So remember, as part of the genco model, every solution is a bespoke solution and they have bespoke ramp rates. And all those things go into consideration of timing and kind of generation we provide.

Paul Fremont

Great. And then I guess since genco is growing as a percent of your total contribution, when can we sort of expect to see separate financials,

Sean

John? Yeah, but we'll break that out once we get to a place where Genco is a more material contribution to NiSource's ongoing financial results.

Paul Fremont

Great. That's it. Thank you very much.

OPERATOR

Your next question comes from the line of Travis Miller of Morningstar. Your line is now open.

Travis Miller

Thank you. Fortunately, unfortunately, I'm going to follow on here a couple lines of questions in your comments earlier. The pool strategy. Do you need approval from the IUC for any new assets or any contracts outside of approval for just the data center contract? Essentially, are you able to serve that data center contract with any assets and purchases without regulatory approval?

Michael Lorz

So the existing process that we have with the IURC as genco is a regulated entity is we file the special contracts with the IURC for approval. As we file those special contracts with the IERC for approval, we do provide them with information relative to what assets are being added to the system. The special contract is approved. That information on what assets are being added is typically within the special contract, but does not require like a separate CPCN approval with it. So the pool strategy is a mechanism by which that we're able to effectuate through genco indirectly and that comes out as special contracts with counterparties that the IURC will prove. If that makes sense.

Travis Miller

Yeah, absolutely. Okay, sounds good. One other quick clarifying. I think you might have raised this. You might have answered this early. But just to clarify, the 9 to 10% growth includes only the existing Amazon. Amazon expansion and the Alphabet. Right? None of that's correct.

Michael Lorz

The 90 10% growth only includes signed customer contracts. Not any strategic. No strategic negotiation.

Travis Miller

Okay, got it. And then the mechanism for flowing savings back to customers. Wonder if you could talk a little bit about that in terms of that 1.4 billion number, how that actually gets back to Nipsco customers.

Michael Lorz

So that. That 1.4 billion is a defined mechanism within each special contract that distinctly lays out how that. How those funds will be accreted and then provided back to the Nipsco base. And in the end, it is a credit against the bills of those retail customers and of those customers that are on the electric generation side for Nipsco. So it is a. It is not a. A volumetric reduction. It is a. It is a credit to those customers from what we're doing within these contracts.

Travis Miller

Okay, great. I'll leave it there. Thanks. So,

OPERATOR

thank you. I'd now like to hand the call back to Lloyd Yates for closing remarks.

Lloyd Yates

I want to thank all of you for your questions and your continued interest in NiSource. We appreciate it. Have a great day.

OPERATOR

Thank you for attending today's call. You may now disconnect. Goodbye.

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