Microsoft Signs 20-Year Deal to Finance 1,100 MW Power Generation for NiSource’s Indiana Data Center Campus in US

NIPSCO customer savings from large-load contracts are now projected at roughly USD 1.75 billion, up from USD 1.4 billion, following a 20-year energy agreement NiSource Inc. (NYSE: NI) has signed with Microsoft for the utility's previously announced data center campus in northwest Indiana.

The deal covers approximately 1,100 MW of new generation resources, with service to Microsoft expected to begin in 2028. The added savings amount to as much as USD 140 per customer annually for Northern Indiana Public Service Company LLC (NIPSCO) electric customers.

Microsoft carries the full cost of its own infrastructure

The agreement routes Microsoft's service through NiSource Generation Company LLC (GenCo), a structure the company says shields existing NIPSCO electric customers from incremental costs while returning value from large-load customers' use of the existing electric system. Under the deal, Microsoft fully funds all generation and transmission required to serve its load.

NIPSCO and GenCo will provide the transmission and generation infrastructure needed to ensure adequate assets for both Microsoft's data center and NIPSCO's customers, delivering what the company describes as a safe, reliable, and coordinated power supply.

The company says these assets will also upgrade NIPSCO's electric transmission system, improving grid reliability and resilience for customers in Indiana.

Executives frame the deal around affordability

"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."

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 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 added to GenCo's resource pool

Alongside the Microsoft agreement, GenCo has contracted 600 MW of battery storage under a long-term tolling agreement. An affiliate of AGP Group will develop and construct the storage facility. The resource will join GenCo's pool resource assets, which are designed to serve multiple large-load customers rather than a single offtaker.

Regional growth and statewide positioning

NiSource presents the agreement as a driver of economic growth in Indiana, citing job creation, an expanded tax base, and the development of 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.

Earnings call to provide further detail

Additional operational and financial details on the agreement, along with NiSource's broader approach to supporting data center growth, will be shared on the company's third-quarter earnings call.

Further information is available in the Investors section of their website, which the company uses alongside its social media channels to distribute information to investors.

Company background

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 Columbia Gas and NIPSCO brands.

Its roughly 7,700 employees are tasked 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.