NiSource Inc. stock rose roughly 3% in after-hours trading Thursday after the company disclosed strategic energy supply agreements with subsidiaries of two major cloud providers to support data center development in Indiana.
Under the announcements, NiSource has reached a long-term energy arrangement with a subsidiary of Alphabet Inc. to provide capacity and energy for a large-scale data center located in northern Indiana. Service to the Alphabet-linked site is scheduled to commence in the summer of 2026, and the energy and capacity will be supplied through NiSource’s NIPSCO Generation LLC - known as the GenCo model.
Separately, NiSource expanded its existing agreement with Amazon Data Services, Inc. The amended contract accelerates the energization timeline for Amazon sites in the state and brings forward credits intended for residential customers. The company said the changes will enable earlier site activations and quicker customer savings than had been planned under previous schedules.
NiSource described the GenCo approach as a mechanism to both create value for current customers and attract economic development to Indiana. Following these deals, the company now projects aggregate cost savings for existing customers of about $1.25 billion, which it said translates to approximately $90 to $115 in annual savings for an average residential customer.
To support communities hosting the new generation assets and data center activity, NiSource will contribute an additional $17 million. The company said the GenCo-owned pool portfolio is expected to reach about 340 megawatts, with seasonal market purchases of up to 175 megawatts to satisfy counterparty requirements associated with the agreements.
NiSource indicated it will provide more detailed operational and financial information related to these strategic agreements during its upcoming first quarter earnings call.
Context and market reaction
The combination of multi-year energy commitments for large-scale data centers and the GenCo delivery structure was cited by the company as the rationale for both the projected customer savings and the community contributions. The announcements coincided with a modest after-hours uptick in the company’s share price.
All operational timelines, capacity figures, expected savings, the additional community contributions, and the planned disclosures at the first quarter earnings call were reported by the company.