NISOURCE INC. Q1 FY2025 earnings call

Key Priorities

• Collaborative regulatory and stakeholder relationships, e.g., Ohio Senate Bill 103 which shortens capital outlay recovery time and facilitates economic development.
• Leveraging AI in operations for efficiency, reliability, and service improvement. Project Apollo targets sustainable cost savings.
• Regulatory progress: Maryland final order approved critical safety/ reliability capital, Virginia rate case on track, Pennsylvania rate case filed for over $400M investment, NIPSCO electric rate case settlement reached.
• Capital expenditures: Dunns Bridge II launched, Fairbanks and Gibson construction on track, 2,100 MW renewable nameplate capacity installed, capital guidance reaffirmed with over $19B investment over five years.

No detailed breakdown of product segments by absolute revenue and contribution % provided in the transcript. Overall, NiSource reported first quarter 2025 adjusted EPS of $0.98, 15% above the same quarter prior year.

Guidance

• Reaffirmed 2025 adjusted EPS guidance of $1.85 to $1.89.
• Reaffirmed annual 2025 to 2029 guidance for adjusted EPS 6% to 8%, rate base 8% to 10%, and targeting 14% to 16% FFO-to-debt.
• Capital guidance for current plan horizon unchanged with over $19B investment over five years and identified upside opportunities.

Risks

• Regulatory processes and outcomes could impact financial plans.
• Macroeconomic environment, including tariffs, may affect costs.
• Potential changes in tax credits and transferability under the IRA could impact renewable projects.
• Uncertainties in ongoing Genco filing and settlement discussions.

Q: On the NIPSCO Genco filing, could a deal be announced prior to the outcome of the proceeding?

A: Michael Luhrs stated a special contract could be announced prior to Genco completion, as Genco provides flexibility and protects existing customers while enabling special contract execution.

Q: On PPAs and Genco structure, how is pricing considered?

A: Michael Luhrs explained the Genco structure allows flexibility to respond to stakeholder needs, with PPAs between Genco and NIPSCO to be approved by the commission.

Q: On the $2.2 billion outside the base plan, is data center capital incremental?

A: Lloyd Yates stated $2.2 billion upside does not include data center capital, which would be incremental to the plan.

Q: On co-retirement and asset lifespans, how does it impact CapEx?

A: Lloyd Yates mentioned they are assessing the impact of executive orders on asset lifespans but are currently on track with retirement plans.

Q: On Genco regulatory cap structure, what's the outlook?

A: Michael Luhrs stated they haven't disclosed financing structure details yet, focusing on completing special contracts with customers.

Q: On transmission projects, when will they flow into the base plan?

A: Shawn Anderson explained transmission projects will flow into the base plan when there's certainty on executability and regulatory mechanisms, likely towards the latter part of the plan horizon.