NiSource Inc (NI) — Q1 2025 Earnings Call Transcript

Good morning. And welcome to the NiSource first quarter 2025 investor call. Joining me today are President and Chief Executive Officer, Lloyd Yates; Executive Vice President and Chief Financial Officer, Shawn Anderson; Executive Vice President of Technology, Customer and Chief Commercial Officer, Michael Luhrs; and Executive Vice President and Group President NiSource Utilities, Melody Birmingham. Today, we will review NiSource’s financial performance for the first quarter and provide an update on operations and growth drivers. We’ll open the call to your questions following prepared remarks. 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 MD&A sections of our periodic SEC filings. Additionally, some statements made on this call relate to non-GAAP earnings measures. Please refer to the supplemental slides, segment information and full financial schedules for information on the most directly comparable GAAP measure and a reconciliation of these measures. Now, I’ll turn the call over to Lloyd.

Thank you, Dave, and good morning, everyone. I’ll begin on Slide 3. The NiSource strategy is simple. We are committed to delivering safe, reliable and affordable energy to our customers. We execute this strategy through efficient deployment of capital, safe asset operations and constructive regulatory mechanisms. These are converted into a reasonable return on invested capital, enhancements to our balance sheet position and offer a dependable and growing dividend. These are the foundation of the NiSource business plan, which continues to offer compelling value to stakeholders. Driven by regulated utility operations across premium jurisdictions with diversification across geography and fuel type and disciplined capital allocation. Advancing to Slide 4, we will step through our key priorities. Collaborative regulatory and stakeholder relationships and operating with excellence pave the way for NiSource to execute on its financial commitment. NiSource continues to work alongside stakeholders through regulatory processes to ensure resources are available for critical investments in safety, reliability and economic development. One example was a recent Ohio legislative proposal to modernize natural gas rate making. It passed Senate Bill 103, which shortened the time between capital outlay and recovery. This minimizes regulatory lag and maximizes the value of the investments for our communities. It also creates a special contract approval process to facilitate attracting new large load customers. This promotes economic development, greater job creation to enhance the local tax base and would make Ohio more competitive with its surrounding states. Our dedication to operational excellence continues to advance as we leverage AI in our operations to revolutionize our company and how we deliver service to our communities while driving greater efficiency and enhancing the reliability of our business for our customers. Today, we reported first quarter 2025 adjusted EPS of $0.98, which is 15% above the same quarter of $0.85 reported one year ago. We are reaffirming 2025 adjusted EPS guidance of $1.85 to $1.89, as well as reaffirming annual 2025 to 2029 guidance for adjusted EPS of 6% to 8%, rate base of 8% to 10% and targeting 14% to 16% FFO-to-debt in all years of the plan. Our plan remains resilient and executable in the current macroeconomic environment. The stability of our regulatory foundation and intentional capital deployment is fundamental to the NiSource business plan. Additionally, we are continuing commercial negotiations to support data center build-out in Northern Indiana. While these negotiations continue, we have also advanced our pending application to the IURC to establish NIPSCO Genco and support large load customers. Our testimony in this process supports four key goals. First, it protects existing system customers by separating costs. The Genco strategy shields existing customers from the financial impact of new capacity investments. Second, it allows us to construct the generation resources necessary to serve this customer class with the speed and flexibility that meets their needs. Third, it maintains NIPSCO’s financial integrity. As with all investments, we give thoughtful consideration to the risk profile of new investments and how those drive value and ensure long-term cash flow quality for our business. Last, we’re preserving flexibility in our business model by creating another tool within our portfolio to meet the evolving needs of our customers. The declination filing requests the commission to decline jurisdiction on a limited scope of activity related to Genco to support a data-centered development strategy. We are in active settlement negotiations, and while we cannot provide an update on this call, if there is any movement on this topic, notice of progress will be followed with the commission. This is an exciting opportunity to advance unprecedented development in Indiana, which could provide significant resources to communities and drive meaningful value to all stakeholders. We’re very pleased with the progress we’ve made and continue to work with potential customers to make this development strategy a reality. Moving on to Slide 5, our commitment to deliver operational excellence is evidenced from key initiatives to standardize work and enhance risk management. Last July, we launched our Work Management Intelligence Program at Columbia Gas of Ohio. Since then, productivity gains exceeded expectations and exceeded 40,000 hours across the service territory. We have extended our Work Management Intelligence Programs to Pennsylvania, Maryland, Kentucky, and Virginia. In these regions, we have observed consistent productivity gains averaging 16.5%. We are leveraging AI to revolutionize our company and its operations. To-date, more than 17 operation centers use AI-generated optimized schedules, resulting in over 60,000 hours of productivity improvement compared to the same period in 2023. And we have introduced real-time analytical dashboards, enabling tracking and performance evaluation at every level, from field operations to executive leadership. Continuous improvement is at the heart of the Project Apollo strategy, which targets sustainable cost savings by reducing inefficiency across our operations. In addition to leveraging AI, we further improve service and reduce waste through other key projects launched in 2025. Meanwhile, 75% of initiatives launched in 2024 continue to provide efficiency in 2025. Moving to Slide 6, we will highlight progress made on our regulatory agenda. We are proactive on the regulatory front through general rate case and rider filings. A Maryland final order approved in April continues a constructive path of approval for critical safety, compliance, and reliability capital additions in the state, including nearly $11 million in investments in 2024. The Virginia rate case remains on track with an order expected in the second quarter. Our Pennsylvania team filed a new rate case to recover over $400 million of anticipated investment necessary to deliver safe and reliable service to our customers. Pennsylvania has a track record of constructive regulation, and our team has achieved a settlement with stakeholders in 11 of the last 12 rate cases. The final order is anticipated in the fourth quarter. The NIPSCO electric rate case has $2.5 million of incremental investments for our customers and communities in Northern Indiana. In February, we reached a settlement agreement making our seventh settlement in the last 10 years across both the electric and gas businesses. We expect a final order in the third quarter. Our teams are continuously engaged with key stakeholders to deliver stable and predictable outcomes for our customers while ensuring safe and reliable service in our communities. I’ll now turn things over to Shawn.

Thank you, Lloyd. I’d like to start on Slide 7 by highlighting the progress made in our capital expenditures program over the last quarter. In January, Dunns Bridge II launched commercial operations making the Dunns Bridge complex one of the largest solar generation facilities in the country. Fairbanks and Gibson construction remains on track with in-service expected this year. All panels were purchased in advance and are onsite reducing any inflationary risk associated with tariffs on renewable assets in our planning horizon. Across NIPSCO, we continue to advance our energy transition strategy. To-date, we’ve installed renewable nameplate capacity of 2,100 megawatts to support baseload generation for the region. The majority of these assets were negotiated at prices now approximately 50% lower than in today’s renewable marketplace. This locks in the cost of our capital investments and positions our customers to access a low-cost energy option for the life of these assets. Continuing on to capital investments on Slide 8, there is no change to our capital guidance for our current plan horizon. The outlook projects over $19 billion of investment over the next five years, with over $2 billion of identified upside opportunities for safety and reliability of our infrastructure and customer service offerings. Our capital plan is not susceptible to concentration risk or extended construction timelines. Investments are diversified across electric generation projects, gas and electric customer growth, and transmission and distribution modernization and system hardening. We continue to assess and actively develop our base plan to include only those investments that meet our standards. We continue to assess the incremental investment opportunities shared on Slide 9, which include data center generation, electric transmission, and gas system investments to support incremental demand, including distribution, transmission, and other infrastructure to support growing communities, the onshoring of manufacturing, and new technology across the region. Finally, FERC regulated electric transmission projects and MISO’s multiyear long-range transmission planning initiative are opportunities to further develop across and beyond our planning horizon. These investments are unquantified and sit outside the base and upside plans, which our guidance supports today. Additional development of these strategies is required to meet our threshold to include in either the base or upside capital investment plans. However, we are strongly positioned to advance these strategies. And once we’ve hit key milestones, new projects will flow through our plans. NiSource is able to be opportunistic in capital allocation decisions due to the strengthened financial profile of the company and enhanced balance sheet positioning. Now let’s cover the first quarter financial results on Slides 10 and 11. As Lloyd highlighted, adjusted EPS was $0.98 per share, a $0.13 per share increase versus the $0.85 reported in the same period last year and represents a 15% year-over-year growth, primarily driven by regulated revenues, recovering capital investments from 2024’s regulatory activity. These results strongly position NiSource to achieve our full year financial commitments. We have achieved over 52% of our projected midpoint earnings, which is an increase of 8% compared to the same period last year. All planned regulated revenue increases necessary to achieve our 2025 guidance have been put into rates or are pending approval. We’re ahead of schedule on our financing plan and have secured at least half of our forecasted 2025 equity issuances and issued $750 million of long-term debt. Lloyd mentioned the resiliency of our business plans relative to the changing tariff landscape. I’ll offer a few additional thoughts on this. Productivity enhancements like AI efficiency and Project Apollo reduced time and reliance on materials subject to tariff implications. Approximately 85% of our O&M and capital costs are labor and not subject to tariffs. In addition, approximately 97% of our procurement is through domestic Tier 1 suppliers. And our teams have already secured a significant portion of critical equipment to support our operations and capital plans for the five-year horizon. Finally, we operated in a regulated framework that reduces the impact of rising product costs on our business. It is important to note that tariffs have the potential to drive onshoring and manufacturing expansion in the U.S. We believe our service territory is attractive for the location of facilities due to the constructive business climate, the proximity to and availability of low-cost energy for manufacturing services, and a skilled labor force across our region. These fundamentals underpin an attractive opportunity for economic development, providing investment and increased margin into our base plan. Moving to Slide 12, we are reaffirming our long-term financial commitments. We are confident we will achieve 2025 guidance and sustain long-term growth throughout the planned horizon. Greater transparency in capital returns supported by constructive regulatory frameworks and effective recovery mechanisms provides clearer insight into the financial projections for 2026 and beyond. Our internal forecasts reflect the use of established capital trackers across nearly all jurisdictions and are built on realistic assumptions for load growth, financing costs, regulatory outcomes, commodity prices, and other external factors. The forecasts also include a highly visible inventory of required capital investments necessary to ensure safe and reliable energy delivery for our customers. Beyond that, we maintain upside in incremental investment opportunities not captured in our existing financial commitments, including the potential for data center development. We have built flexibility into our plans in advance of potential headwinds and derisk execution of our plans through our balanced and diversified business plan across six constructive operating companies. We’ve significantly strengthened our balance sheet and have enhanced our visibility into how the investments we make convert into earnings through reduced regulatory lag and efficient financing plans. Slide 13 highlights our five-year funding plans. We are reaffirming 14% to 16% FFO-to-debt in all years of the plan, as well as our guided annual equity needs through 2029. A balanced mix of cash from operations, new long-term debt and $200 million to $300 million of equity each year enables us to maintain our capital structure and strong balance sheet position. In addition to traditional sources of funding, the potential use of hybrid securities and senior unsecured debt enhance flexibility and diversification, enabling us to grow without sacrificing credit quality. And finally, on Slide 14, you can see we are on track to meet our 2025 financial commitments and build stability into 2026. We are confident in our ability to achieve near-term and long-term guidance, given our strong business fundamentals. NiSource offers investors 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. This emerging opportunity to support unprecedented energy development and power demand, resulting from robust economic development onshoring, as well as new data center development, truly differentiates the value proposition relative to many alternatives in the marketplace today. I’d now like to turn the call over to the Operator for Q&A.

Good morning, Shar. You there?

There you go. Got to love the mute function. Hi, Lloyd. Good morning.

Good morning.

So good morning. Regarding the NIPSCO Genco filing, I understand it’s still ongoing. Do you need to wait for an outcome in the proceeding before announcing a signed agreement, or could a deal be announced beforehand? In other words, do you already have a customer you can announce with the approval of the new structure?

Michael, you want to handle that one?

Hello, Shar. Yeah. We could go ahead and proceed with a special contract and announce a special contract without having the Genco completed. The key of the Genco is that it provides the flexibility that Lloyd mentioned, really providing the significant protection of the existing customer base and allowing for the speed and flexibility that we know the large load customer needs while enabling the protections that would facilitate a special contract execution.

Got it. Just to remind us on the PPAs, the structure is still in development, but if the pricing of the PPAs exceeds what is permissible from a regulatory standpoint, how should we approach that?

So one of the nice components of the Genco structure is it really allows the flexibility to respond to multiple stakeholder needs. And those stakeholder needs, including if there are specific resources that would enable the speed to market, the ramp that would be needed and/or the resource mix that would be needed in order to meet their goals. So the point of that is we would do that, and then NIPSCO will still be the resource adequacy provider to the market. The IRP and the flow through of the resource adequacy would go through NIPSCO, at which time we would file a PPA between Genco and NIPSCO, which would be approved by the commission and followed through. So in other words, it’s not a matter of if the PPAs pricing relative to our existing system, it’s relative to the special contract, which we would file for execution.

Got it. Okay. That’s helpful. And then just lastly, the $2.2 billion that’s currently outside of the base plan. Should you get a signed agreement? Do you see an opportunity to accelerate the $2.2 billion? So I guess in other words, is there other large load customers embedded in that assumption or would that be incremental to the $2.2 million? Thanks.

So the $2.2 billion upside does not include any data center development or economic development capital. The $2.2 billion upside are other projects and the regulated utility that could be potential upside. Like AMI, Pipeline Integrity and Transmission. There’s no data center capital there. Any data center capital would be incremental to the plan.

Perfect. Thank you guys. Fantastic execution. Really appreciate it. See you soon.

All right. Thank you.

Hey, guys. It’s actually Julien here. Thank you guys very much. Appreciate it. Maybe just to follow up on a couple...

Good morning, Julien.

Hey. Good morning to you guys. Pleasure. If I can follow up on a couple of nuances here, there’s been a lot of talk in the state around co-retirement and federally for that matter. I’d love to hear how you guys are thinking about that juxtaposed against your plan. And specifically how you think about potentially extending the lives of your assets and to what extent that that would or could impact your CapEx. Because it’s not obvious even if you did hold open your assets, if that would change necessarily your current spending plans and/or your future spending plans predicated on some of this incremental data center load?

Yeah. So, Julien, we are currently in the middle of assessing the impact of those executive orders. Today in our plan, we are still on track to retire Schaefer at the end of 2025 in Michigan City at the end of 2028. Understanding that and taking a look at the executive orders. We’re assessing what it would take to extend those. And we’ll work with the various federal and state regulators to do what’s best for our customers and various stakeholders and other stakeholders. But the important point is we’re in the middle of a deep assessment on those.

Got it. Okay. I'm not ready to comment on the potential impact yet. Thank you for that. Staying on the same topic, I understand the state has recently updated some CPCN procedures and timelines. Can you explain how this could potentially facilitate your data center filings? Specifically, how might your innovative declination effort be affected? Does this change provide a faster path to a timely outcome?

I think you are talking about Senate Bill 1007. So the declination filing is separate from 1007. 1007 just gives you another path for large load customers. I mean, so we’re pursuing the declination filing. Remember we said in the past, that’s only one of the mechanisms we have to deal with this counterparty of these load opportunities. Senate Bill 1007 just gives us a second or even a third path.

Right. Indeed. And just, does that make it more likely? I mean, when you think about the pathways here and what you’re seeing, in fact, let me just ask it directly here. I mean, with respect to Genco, is your expectation here that you would, given that you’ve now seen very clearly where parties stand, that have a pathway to potentially settle this out or at what point do you kind of elect to pursue this expedited CPCN process, especially given how timely some of this generation may need to be moving forward?

So let me say a couple of things. One is we’re in the midst of settlement discussion. So I can’t talk in detail about those because they have not been concluded. I think in terms of following this Genco, we think it’s a really good path in terms of dealing with the counterparties. It meets the four pillars I talked about in my prepared remarks. Good for customers, good for our financial integrity, gives us speed and flexibility we need and we’re optimistic about completing that process. But we’re also looking at Senate Bill 1007 as another path, and we’ll evaluate that if Genco doesn’t pan out for us. Melody, you want to comment on that?

Sure. Julien, good morning, and thanks for your question. So to Lloyd’s point, House Bill 1007, it really didn’t change any currently available options for utilities to serve large load customers. And also to Lloyd’s point, what it did do was add those additional options. So expediting the generation resource planning process, as well as it provides for 150-day review of an application for utility to serve the load. So our strategy remains the same. So it really doesn’t change any of the options that are available for us to serve large load customers.

Excellent, guys. Thank you so much. Appreciate it.

Hi. Good morning. Thank you for the time today.

Good morning, Richard.

I appreciate discussions are still ongoing, but just offer any thoughts on sort of the pace and engagement with your large load, prospective large load counterparties, maybe relative to 4Q or last fall. It has certainly been a lot of attention here broadly on sort of hyperscaler, CapEx reaffirmations, what have you. Are you seeing that following through on your end in talks?

Sure, let me respond to that. If you recall, towards the end of 2024 and in February 2025, I mentioned that large load growth from hyperscalers would be a focus for 2025. We are making significant progress, but it’s crucial to recognize that these transactions are complex and may take a considerable amount of time and management focus. We are committed to ensuring we handle this properly. Referring back to my four pillars, ensuring this is done right is beneficial for our customers, maintains financial integrity, aligns with the speed and flexibility our counterparties expect, and protects our business model. We are moving in the right direction and are excited about this opportunity, which we believe will be advantageous for NiSource and all our stakeholders. We will relay any new information as soon as possible. Observing the ongoing capital plans of various hyperscalers and developers indicates they are consistently investing in building and developing data centers, which signals a strong interest in the network. Additionally, when considering Indiana as an investment location, we see plenty of opportunities, but it is important to ensure we execute this correctly.

Great. I appreciate the information provided. Regarding the Genco discussion, what would the regulatory capital structure be for that entity? I believe a peer recently submitted a tariff that outlines a higher return on equity and equity layer for this type of activity. Would you consider something different from what NIPSCO has authorized? Can we expect to see this in the settlement, or is a separate contract or rate case required to determine that? Any insights would be appreciated.

Michael?

So we haven’t discussed or disclosed anything associated with the financing structure with Genco. We are continuing working through and focusing on completing the special contracts with customers and working through that development of those activities.

Understood. Thanks for the time.

Hey, everyone. Thanks for taking the questions.

Good morning, Nick.

Good morning. I wanted to quickly follow up on the settlement discussions. Are you expecting hearings to start at the end of this week if the settlement is reached?

Again, as I mentioned, we are in the midst of settlement discussions. When we have detail on those, we’ll let you know as soon as possible, but we can’t comment on specific discussions or timing with respect to those right now.

Okay. No problem. And I just wanted to confirm, as you think about getting to a commercial agreement with any customer, that that is not explicitly tied to the timeline of the proceedings or the potential settlement?

That is correct.

Okay. Great. Regarding the assessment of coal, in response to Julien’s question, the NIPSCO IRP is calling for long-term resource solutions that likely extend beyond the current timeframe for how long the coal could remain in operation. Do you see this influencing your long-term procurement strategy at this point to meet the generation needs and the load growth outlined in the NIPSCO IRP?

Michael?

So when we look at the IRP and we look at the extended plan with the IRP, we will need additional resources for the IRP, despite all alternatives in evaluating the executive orders. As you look at MISO’s direct loss of load rules and the changes associated with resources and the accreditation of resources, we know we’re going to need additional capacity on the system in order to facilitate the reliability and resiliency of the system.

Thank you very much.

Hi. Good morning. Just another question on the Genco. I guess, it’s clear that you can make the special contract filing concurrently or separately from resolution of the declination filing, but given some of the complexities and that you’ve outlined, is it prudent or is it a preferred outcome to have sort of visibility on the declination filing before filing a special contract, given that some of the framework would likely need to be embedded within the terms of the contract?

We believe the declination filing presents a strong opportunity to address the core objectives we've discussed. While we anticipate progress with the declination filing, our focus on protecting our current customer base and offering resource alternatives can be achieved through various methods, regardless of the filing's outcome. Nonetheless, we believe that the declination filing and its results will effectively address the needs of stakeholders, particularly large load customers, and safeguard our existing clientele. As we evaluate the options, such as 1007 and other possible solutions, we have several avenues to reach our goals. However, we feel that the declination filing remains the most favorable option to fulfill all stakeholder requirements.

Okay. All right. Great. And then, can you just speak to some of the, at the federal level, some of the policy changes that have materialized here around tariffs and then maybe speak to exposure around any potential issues with the IRA as it relates to renewable tax credits and transferability?

Shawn, you want to take that one?

Sure. Thanks. On tax transferability and IRA, PTC and ITC, most of our renewable projects plan to be online by the end of this year. It leaves a limited window for direct PTC, ITC challenges that are not retroactive. Really only Templeton is the only base plan asset really that’s beyond the horizon here in 2027. So the plan assumes an ongoing PTC transferability 2026, 2027 and 2028 of about 40 basis points to 60 basis points. So, we’re pro tax credits to benefiting customers and helping existing customers today realize those tax credits. That’s helpful to keep energy costs down for customers today. But as we think about the financing plan implications and what the IRA brings to the existing plan itself, we believe our existing plan, the strengthening we’ve done on the balance sheet, the cushion above our downgrade threshold, I wouldn’t suspect a change to our financing plan as a result of the potential appeal of tax transferability. And then I think we noted this in my prepared remarks on the implications associated with tariffs. We’re in a really strong position, both from a standpoint of labor activities, a high degree of domestic content in our supply chains, continuous improvements such as Project Apollo. We think that those can help us face the potential changes associated with tariffs. A fully regulated compact itself helps us get line of sight to where things could reset themselves. We built the track record of being thoughtful around long-term energy costs for our customers and evaluating those overall impacts, delivering flat O&M really for an extended period of time amidst a range of economic conditions. We’ll be able to right-size our plans to ensure that we can path this forward and face whatever comes our way from tariffs without the changes to our existing financial commitments.

Okay. Great. All right. Thank you very much.

Good morning. Thank you.

Good morning, Travis.

One more on Genco, if you don’t mind. As you’re talking either through the settlement and official discussions or just outside of the official discussion, are there any parties that are strictly opposed to this or is it just a matter of devil’s in the details getting all of those aligned?

Again, Travis, we can’t comment since we’re in the middle of active settlement discussions on the Genco. We can’t comment on the position of any specific party right now.

Okay. That’s fair. Other topic, transmission. I think as Shawn mentioned, milestones in terms of other projects. I wonder if you could characterize what some of those milestones are, what you’re waiting to see or hear transpire before you add some of those transmission projects?

Shawn...

Yeah. Sure. Thanks, Travis. So when we think about MISO long-range transmission projects, both the executability from an operational standpoint, the construction and making sure that we understand what the costs are going to be to install those assets and operationalize those assets, and then juxtapose that with the regulatory compact itself, making sure that we understand the mechanisms that will pick up those costs. Once we reach that degree of certainty around those two elements, you’ll see those flow into our base plan. As a reminder, we do have a nominal amount of MISO Tranche 1 projects in our base plan, as well as some in our upside plan, which Lloyd highlighted earlier. We do not have MISO long-range transmission Tranche 2 projects in either the base plan or really in the upside plan, as it mostly persists outside our existing financial plan horizon. But we do expect the Tranche 2 projects to start to come into fruition towards the latter part of this plan horizon. And we think that could be additive to the upside plan once we’ve gone through the work to commercialize and develop our plans to operationalize those assets.

Okay. Great. When you mean plan horizon, you’re talking 2029 and beyond, or 2030.

Yeah. That’s correct. Yeah.

Okay. Very good. Appreciate it. That’s all I have.

Yeah. Hi. It’s Steve Fleishman.

Good morning, Steve.

I'm going to avoid asking about Indiana, but in your discussion about data centers, you mentioned supporting data center strategies in Indiana, Ohio, and Virginia. Could you elaborate on what you are doing in Ohio and Virginia in that context and the opportunities available?

Well, I’ll throw this to Michael or Melody. You guys, which one? Go ahead, Melody.

Hi, Steve. Thanks for asking the question. So we do talk a lot about Indiana being right for data centers, Northwest Indiana, but we’re seeing activity in Ohio as well. And so our teams are working with the local and state entities to look at what these data center needs are and how and if we can support them. And so I’ll just say that we’re staying engaged with the local and state economic development entities to look in how we can serve those customers, those potential customers.

Yeah. To Melody’s point, most of that investment for us is natural gas infrastructure pipeline. So if you think about Virginia and Ohio, as these developers come, they’re going to need energy. So that allows us to invest capital to put in gas pipelines to support data center activity.

Understood. Separate topic, just the MISO auction outcome that we just had, I know it’s for kind of more of a near-term here, but just any kind of broader thoughts from that, because obviously a big uptick in pricing and how it impacts your plans.

Yes. We’ve seen the MISO auction and we are evaluating its results. And we look through the IRP consistently to make sure that we have the resource adequacy we need. But when we look at the MISO auction right now, we’re well positioned within the current plans we filed from the IRP.

Thank you very much. I guess a procedural question. If you wanted to delay the start of hearings on Friday, you would have to file a notification either today or tomorrow, is that correct?

That is correct.

Great. And then the other question I have is, beyond sort of what you’re seeing with data centers, are you seeing any activity with respect to onshoring or industrials announcing sort of major expansions in Ohio? I mean, in Indiana.

Yeah. I think so, again, we’re seeing recently for battery manufacturers, we’re seeing some expansion. One of the things we’re seeing, so the answer is yes. Like Indiana’s, I’d say very well positioned for onshoring with one of the opportunities being a battery manufacturer. But in terms of economic development, our team up there is really busy with manufacturing above and beyond data centers. Shawn, you want to weigh in on that?

Yeah. Just a couple more. I mean, the cold storage sector continues to grow in Indiana. We’ve seen a couple of food organizations come in with food manufacturing and cold storage providing jobs, as well as $70 million of capital investment into the region. $70 million for their facilities, not ours. But cold storage also in Crown Point also, continuing the development in that theme. So NIPSCO has continued to see a general increase on manufacturing projects across the year. Several international companies are exploring opportunities to establish in Indiana. A plastics manufacturer, a biopharmaceutical firm, a recycling operation, each poised to deliver new job opportunities in Indiana and bring significant investments in the state, as well as EV battery manufacturers, which we’ve seen come up a couple of times. So Indiana continues to be robust, but we’re also seeing it in Virginia. We’re also seeing it in Ohio. You highlighted that one. So we’re seeing it across our service territory. All of this really precedes any of the changes from the tariff landscape, right? Most of this was already in pipelines working and our states do a great job of trying to attract global companies to come into our region.

Great. Thank you very much.

Hello.

Good morning, Lloyd. Good morning, Shawn. How are you?

Hey, Ross.

I’ll be brave and ask another question about Indiana. I won’t ask about the settlement process. From a high-level view, it seems like the Genco structure, compared to a straightforward large load tariff filing, has introduced some additional regulatory complexity at the outset. Can you provide your perspective on the advantages of the Genco structure? You mentioned pricing differences for large load customers, but are there other benefits that you see? Additionally, regarding Steve’s question about Ohio and other segments, if the Genco approach works well in Indiana, do you anticipate something similar to a Pipeco structure in Ohio? Thank you.

Let me explain why we consider Genco to be our preferred path to success. First, it allows us to protect our existing customers by enabling cost separation. Second, it accelerates our speed to market. We are requesting the IURC to decline the CPCN, a process that usually takes around 240 days, which means we can deliver generating resources to our counterparties more quickly. Listening to our counterparties reveals that their capital needs and desire for speed are significant, making speed to market crucial. Additionally, negotiating special contracts with counterparties provides us with flexibility when evaluating risk versus return. This element of the process is complex but could present us with more opportunities depending on the risks we choose to take, which is important for us. It also helps us maintain the flexibility of our current business model. Over the past three years, our EPS CAGR has been 8.5%, demonstrating a solid financial plan that we aim to protect. We believe this opportunity not only aligns with but enhances our current business strategy. We are enthusiastic about it and view it as a very promising idea.

Yeah. That’s great, Lloyd. And then you touched on it. There’s a different sort of risk dynamic maybe connected with these large load customers. So doing the Genco structure allows you to think about return differently. And I know you haven’t kind of fully decided the capital structure yet, but could you think about leverage differently as well?

This just goes back to Lloyd’s comments on flexibility. We’ve got a lot of different avenues that we could go to make this efficient for our customers and for our shareholders. We’re motivated to bring the lowest cost of financing into the marketplace that we possibly can. I think everyone is in this particular case and it’ll help us advance the strategy quickly.

That’s perfect, Shawn. I’ll see you guys down at Florida soon. Take care.

Okay.

Hi. Thanks everyone. Just one for me regarding O&M. It’s kind of ticked higher in the last couple of quarters. And I think, Shawn, you discussed some of the successes at Apollo and the flat O&M expectations, but just to put a finer point on it, as far as the run rate from here, are you expecting Apollo to kind of have deflationary impacts from here or how are you thinking about it?

Shawn?

Over the course of the year, we continue to expect O&M to be flat year-over-year at around that $1.4 billion level that we’ve been able to maintain since 2016. Project Apollo helps drive that through an array of different opportunities, both efficiency, as well as just identifying waste that can be one-time in nature and reduce the overall cost profile of the business. And our employees lead that each and every day. New ideas populate what fuels its mission and how we are able to obtain that flat O&M on a year-over-year basis, again, really since 2016. That said, we also need to invest in our system. We make strategic investments to risk adjust the system on an ongoing basis. Things like vegetation management, leakage, they don’t always track the same quarter-over-quarter, but they get to the right place at the end of each and every year. And we try and pick the opportunities that we have to ensure that we can be always risk adjusting the system to ensure reliability of our system at all times.

All right. Appreciate it. Thank you. That’s it for me.

Hi, everybody, and thanks for squeezing me in. Two quick questions.

Good morning, Ryan.

Hi. Hi. In terms of your labor contracts, can you remind us when those labor agreements expire and what the process of renegotiating labor rates is?

The NIPSCO contract ends the end of March of 2026. The Pennsylvania contract ends at the end of August of 2026. And I don’t have the dates for the Ohio contracts top of mind, but those are two of the biggest.

Talk to me, everything gets renegotiated in 2026.

Okay. Thank you. And in terms of the EV or electric vehicle supply chain, what portion of your load in Indiana and across your service territory is tied to that industry, both historically and on a perspective basis?

Extremely minimal.

Okay. So the EV batteries is, to the earlier comment, is extremely minimal to the outlook despite the…

Yeah. Ryan, when you think about what the EV battery manufacturers need, ironically, it’s natural gas. And the expansion of our natural gas network itself and really with a high capacity trunk line, enables us to then market potentially to new communities that need the development of natural gas and extend the overall network itself. So it’s actually pretty small on the electric system itself, larger on gas. But of course, as you know, the transport volume on gas isn’t a significant revenue driver for us. It’s really getting the infrastructure deployed and then enabling us to potentially gain more customers with a lower cost fuel and a more reliable fuel at that.

Great. Thanks for taking my questions. All right.

All right.

Yeah. So we thank you for your continued interest in NiSource and your questions, and we look forward to communicating with you in the future. Have a great day.