NIPSCO has reached a deal with an unnamed corporation to provide power to the corporation's data centers, according to a U.S. Securities and Exchange Commission filing.
NiSource, the parent company of the Merrillville-based gas and electric utility, revealed in an 8-K disclosure that it "entered into an agreement with a large, investment grade company, pursuant to which the company has agreed to provide electric service to customer’s data centers pursuant to a capacity commitment beginning in 2027 and increasing annually to the end of 2032." NIPSCO's new subsidiary, GenCo, will build the additional electric generation capacity.
"The contract will be submitted to the Indiana Utility Regulatory Commission for approval, which will include a mechanism to flow savings back to retail customers for use of the existing system beginning in 2027," NiSource said in the filing. "In order to meet demand under the Contract, NIPSCO Generation LLC, a subsidiary of NiSource Inc., expects to construct new dispatchable generation and has entered into engineering, procurement, and construction contracts, and equipment supply contracts, with respect thereto.
NIPSCO received approval this week to spin off GenCo — officially NIPSCO Generating LLC — as a subsidiary that would serve megaload data centers, which can consume more than 100 MW, by negotiating rates directly with them and having them pay for their own electric generation capacity rather than seeking a general rate increase.
"The company expects to finance the project through a combination of debt and equity financing, which may include minority equity investments in subsidiaries, and may also pursue other funding sources, structures, or partnerships as market conditions and strategic considerations evolve," NiSource said in the SEC filing. "The company expects to provide additional information regarding the contract, including updating its financial plan to incorporate the financial ramifications of the contract, in connection with its earnings conference call for the quarter ending September 30, 2025."
A NIPSCO spokesperson said more details about the data center contract would not be divulged until NiSource's third-quarter conference call.
NIPSCO filed plans with the Indiana Department of Environmental Management seeking permission to build a 2,300 MW natural gas plant, roughly as much as the peak demand from its entire current customer base, in order to serve new data centers coming online.
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