April 16 - NiSource announced on Thursday that it has entered a long-term energy supply agreement with a unit of Alphabet to provide power to a large data center located in northern Indiana. The company also said it has broadened an existing agreement with Amazon to hasten delivery of electricity to Amazon sites and to accelerate bill credits for households.
The deals are being structured under NiSource's GenCo model. Under this framework the utility supplies power to large customers through a combination of dedicated generation assets and market-based resources. The company says the approach is intended to insulate existing customers from additional costs while producing savings across the system.
NiSource said the GenCo-owned portfolio will supply about 340 megawatts of generation to serve data centers. That is expected to be supplemented by up to 175 megawatts of seasonal purchases sourced from market resources. The arrangement with Alphabet is timed to begin supplying power in summer 2026.
The company provided an estimate of system-wide customer benefits tied to the GenCo model. NiSource put those savings at roughly $1.25 billion in aggregate, or approximately $90 to $115 per household per year. The expanded agreement with Amazon builds on previously announced customer savings, which the company said totaled $1 billion.
Commenting on the announcements, NiSource President and CEO Lloyd Yates said, "The cost savings announced today expand on the previously announced $1 billion in customer savings with Amazon as we continue to work closely with a broad coalition of stakeholders to bring this GenCo vision to life."
The company framed the deals as part of broader demand from large technology customers seeking reliable and cleaner energy sources to power rapidly expanding data center capacity, driven in part by increased use of artificial-intelligence applications.
At the same time, the rapid buildout of data center facilities has prompted regulatory scrutiny in some jurisdictions. Lawmakers in Maine voted earlier this week for a bill that would halt approvals for new large data centers amid concerns that such facilities could strain local electric grids and raise household energy bills.
Background on the GenCo model
The GenCo approach supplies generation and transmission infrastructure directly to data center customers while relying on seasonal market purchases to balance demand. NiSource says the model is designed to both serve the new large users and deliver savings to existing residential customers.
Key implementation details provided by the company include the 340 megawatts from GenCo-owned assets and up to 175 megawatts of supplemental seasonal purchases, with power for the Alphabet facility expected to commence in summer 2026.