NiSource has signed a 20-year agreement to supply Microsoft’s planned data center campus in northwest Indiana, adding about 1,100 megawatts of new generation resources. Microsoft is expected to begin taking electric service in 2028, and it will fully fund all generation and transmission required to serve its load, NiSource said.
The resources will sit in NiSource Generation Company, or GenCo, a unit the utility holding company uses to serve large-load customers. NiSource says the structure is designed to protect existing customers of its NIPSCO electric utility from incremental costs and to return value from large customers’ use of the existing system.
GenCo’s pool of generation will grow by about 1,100 MW, and NIPSCO and GenCo will provide transmission and generation infrastructure for the data center and NIPSCO’s other customers. NiSource said the new assets will upgrade NIPSCO’s transmission system.
GenCo has contracted 600 MW of battery storage under a long-term tolling agreement. An affiliate of AGP Group will develop and build the facility, which will join a pool of GenCo resources intended to serve multiple large-load customers. NiSource did not identify the other resources in its announcement.
The company raised its estimate of savings for existing NIPSCO electric customers from data center contracts to about $1.75 billion over the life of the contracts, up from the $1.4 billion it had previously disclosed. NiSource said that equates to as much as $140 per customer annually.
“Affordability is not separate from economic development; it is a key pillar of our GenCo model,” said Lloyd Yates, NiSource’s president and chief executive.
Jeff Riles, Microsoft’s senior director of energy markets, said the company “has always been committed to paying our own way” and to ensuring “that our data centers don’t increase electricity prices for other ratepayers.”
NiSource’s announcement refers only to Microsoft’s “previously announced northwest Indiana campus.” Local broadcaster WSBT reported that the agreement will power Microsoft’s planned campus in La Porte, where the company broke ground in June.
Indiana Gov. Eric Holcomb announced the La Porte project in June 2024 as a $1 billion, 245,000-square-foot data center on 489 acres at the Radius Industrial Park, with up to 200 jobs by the end of 2032. At the time, NIPSCO President Vince Parisi said the utility was working with Microsoft on plans to meet the data center’s energy needs.
NiSource’s forward-looking statements list the receipt, timing and terms of required regulatory approvals among the risks to the agreements, along with customers’ ability to carry out their data center construction plans.
Earlier in October, Google signed a power deal with Constellation that includes 890 MW of new nuclear capacity. Microsoft has said it plans multi-gigawatt deployments of its Maia 300 accelerator.
NiSource said it will share more operational and financial details on its third-quarter earnings call.
Sources: NiSource, WSBT, Indiana Economic Development Corporation
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By the Control Plane Editorial Team