NiSource Inc. 2026 Q3 Earnings Call

Hello, everyone. Thank you for joining us, and welcome to the third quarter 2026 NiSource Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Durgesh Chopra, Vice President of Investor Relations. Durgesh, please go ahead. Thank you.

Good morning and welcome to NiSource's third quarter 2026 investor call. Joining me today are President and Chief Executive Officer, Lloyd Yates; Executive Vice President and Chief Financial Officer, Shawn Anderson; Executive Vice President of Technology, Customer, and Chief Commercial Officer, Michael Luhrs; and Executive Vice President and Group President of NiSource Utilities, Melody Birmingham. Today, we'll review NiSource's financial performance for the third quarter, share updates on operations, strategy, and growth drivers, and walk through our extended long-term plan. Following our prepared remarks, we'll open the call for your questions. Slides for today's call are available in the investor relations section of our website. Some statements made during this presentation will be forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements.

Information concerning such risks and uncertainties is included in the risk factors and MD&A sections of our periodic SEC filings. Additionally, some statements made on this call relate to non-GAAP financial measures. Please refer to the supplemental slides, segment information, and full financial schedules for information on the most directly comparable GAAP measures and a reconciliation of these measures. With that, I'll turn the call over to Lloyd.

Thank you, Durgesh, and good morning, everyone. I'll begin on slide 3. At NiSource, our strategy remains grounded in delivering safe, reliable, and affordable energy while creating long-term value for our customers, communities, and shareholders. This quarter, we are extending our long-term plan through 2033, providing a seven-year view of the investment opportunity we see across our footprint and the growth it supports. That plan rests on two complementary platforms. Our base business, six regulated utilities situated across multiple states, delivering natural gas and electricity to 4 million customers. Our growing GenCo business adds differentiated growth, delivering power and capacity to large load customers supporting national security through data center operations. The complementary nature of these segments provides stability, diversification, and long runway of needed investment that has supported a consistent record of delivering on our commitments.

With our recently announced Microsoft agreement, GenCo now serves three of the largest technology companies in the world and brings our signed agreements to an expected $1.75 billion in savings to existing NIPSCO electric customers. Turning to slide 4, we continue to advance our regulatory priorities in support of the financial plan, while AI-enabled tools and Project Apollo are strengthening efficiency and productivity across the business. Today, we report a third quarter consolidated adjusted EPS of $0.27, bringing our year-to-date consolidated adjusted EPS to $1.49. This performance keeps us firmly on track to deliver on our full-year growth commitment. As a result of our progress, we are narrowing our 2026 consolidated adjusted EPS guidance to the upper half of our previously stated range of $2.02 to $2.07.

We are also initiating 2027 consolidated adjusted EPS guidance of $2.22 to $2.30 and expanding our growth commitments through 2033, supported by an increased consolidated adjusted EPS compound annual growth rate of 10%-11%. Shawn will take you through our growth drivers, financing plan, the $40 billion capital plan, and the associated financial commitments later in the call. Moving to slide 5, safety remains our top priority and the foundation of how we serve our customers. This quarter tested our system, our people, and our communities. on August 11, a derecho moved across northern Indiana with wind speeds of up to 110 miles per hour, one of the most severe weather events in NIPSCO's history. Additional rounds of severe weather in the following days brought even more significant damage to our system.

The weather pattern evolved rapidly, and while we were prepared for what was forecasted, the weather severely accelerated in the hours before the storm crossed into our system territory. We activated our incident command structure, suspended non-critical work, and placed contractor resources on standby. Within 24 hours, more than 1,700 external personnel had joined the internal teams, including Columbia Gas employees, contractor partners, and mutual assistance crews from across the region. By August 25, we had completed our broad restoration effort without injury, reflecting our ongoing focus on strengthening our safety culture, disciplined execution, and consistent application of critical safety behaviors. I want to thank our employees, mutual assistance partners, and the local officials and first responders who worked alongside us. We have an improvement mindset and are focused on learning from this event.

We are completing a full internal after-action review, which we expect to finish by late November, and we are hiring a third-party expert to conduct an independent review of our response over the next several months. Meanwhile, we are participating fully in the reviews by the IURC underway in Indiana. NIPSCO will learn from this event and act on the lessons learned as we look to build a stronger and more resilient system for our community. Turning to slide 6 and our regulatory agenda, I'll start with Ohio. Building on the tracker approvals we received this year, Columbia Gas of Ohio filed its first three-year forward-looking rate case under the framework which took effect earlier this year through Senate Bill 103. This forward-looking structure reduces regulatory lag and better aligns recovery with the continued safety and modernization investments for our communities.

Our Kentucky and Virginia rate cases remain on schedule and continue to progress constructively with new rates in Virginia effective October 12, subject to refund, and decisions expected in both cases in the first half of 2027. in September, NIPSCO received a fourth federal order requiring continued operation of the Schahfer Coal Units. We continue to comply, and we are pursuing recovery of compliance costs through the FERC-approved MISO tariff schedule, having submitted Section 205 filings for each order period. We are evaluating a potential extension of the unit's operations through our integrated resource plan. NIPSCO's IRP will also evaluate near-term capacity needs, evolving MISO accreditation rules, and changes in the federal tax credit eligibility. Later this month, we held our second public stakeholder meeting focused on the 20-year load forecast, updated seasonal peak methodology, resource adequacy needs, existing unit assumptions, and stakeholder portfolio concepts.

Our financial plan contains a point of view on the necessary generation requirements to support expected load growth while maintaining flexibility as the IRP evaluates the appropriate resource mix and timing of those investments. We will continue to share further updates with you through our ongoing stakeholder process. Affordability remains a key focus across our jurisdictions, and we continue to engage constructively with regulators and policymakers. In Pennsylvania, the commission's ratemaking working group is evaluating ROE methodologies, rate case processes, and the TDSIC framework as part of the state's broader affordability dialogue. We are participating constructively, and our financial plan retains flexibility to navigate these processes while continuing to invest for our customers. We are also engaged in Indiana through the IURC's broader affordability review, including proceedings on authorized returns and tracker mechanisms.

We will remain actively engaged as those proceedings advance, focused on maintaining affordability while enabling investment necessary to serve Indiana's growing economy. We are already seeing meaningful progress. The IURC's 2026 residential bill survey shows our electric customers' bills declining year over year, and our data center agreements are expected to deliver meaningful savings to NIPSCO electric customers. Together, these reinforce our view that Indiana remains a great place to do business with significant investment potential, and more broadly, that economic development can be a driver of savings and support affordability solutions across our footprint. Speaking of savings, our new partnership with Microsoft reflects our third GenCo customer and fifth agreement we have reached in just over one year. This also represents the latest agreement served through the pool strategy we introduced in May.

We are proud of the work we are doing to bring meaningful savings to our customers in Northern Indiana. We have brought ingenuity and commercial acumen to a problem many states and regions in this country have not been able to figure out. This has unlocked a truly unique win-win-win for existing retail customers and local communities. New customers advance the imperative for the U.S. to keep up with data center technology to protect our country and our shareholders. Shown on slide 7, our signed agreements are now expected to deliver approximately $1.75 billion in savings to existing NIPSCO electric customers, up from $1.4 billion last quarter. At full ramp, that equates to approximately $140 per year for an average residential customer, and we expect bill credits to begin as early as January, pending IURC approval.

Our data center customers pay the cost associated with their load, while their use of the existing system lowers bills for our residential customers. Consistent with the objectives set up for GenCo, this partnership seeks to enable affordability for existing customers, support economic development in Northern Indiana, enhance the shareholder value, and is structured with prudent risk management.

I will now turn the call over to Michael to walk through this agreement in more detail.