The paragraph outlines the introduction to NiSource Inc.'s Q4 2024 earnings conference call, led by the conference operator Janine. Chris Turnure, Head of Investor Relations, welcomes participants and introduces key company executives who will review the company's financial performance and growth strategies. The presentation includes forward-looking statements subject to risks and non-GAAP measures, with relevant information available in the company's SEC filings and website. After the presentations, there will be an opportunity for participants to ask questions.

The paragraph discusses NiSource Inc.'s investment strategy, focusing on providing safe, reliable, and affordable energy through efficient capital use and regulatory mechanisms. This strategy aims to deliver competitive returns and enhance the company's balance sheet. The company operates in six jurisdictions, offering diversification in fuel types and regulatory environments. The CEO highlights a successful year for NiSource Inc., emphasizing key principles like building a constructive regulatory foundation, operational excellence, and fulfilling financial commitments. The commitment to being a trusted energy partner differentiates NiSource from its peers, as they engage with stakeholders to manage costs related to capital expenditures for energy services. Additionally, NiSource builds credibility through rate case and tracker filings using a stakeholder-focused approach.

NiSource Inc. invested $6.9 billion in capital expenditures across a six-state region to enhance system reliability and comply with regulatory expectations, obtaining approval to recover $340 million in revenue for 2024. The company emphasizes proactive stakeholder engagement and continuous improvement in operational excellence, with a focus on risk reduction, efficiency, and safety improvements. An AI initiative has been introduced to enhance operations. Financially, NiSource exceeded its adjusted EPS target for 2024, reporting $1.75 per share, reflecting a 9.4% increase from 2023. The company's business plan aims for consistent annual growth of 6% to 8% in subsequent years.

The paragraph discusses the company's financial outlook and future plans. It states that the 2025 adjusted EPS guidance is raised to $1.85 to $1.89 per share, indicating a 6% to 8% growth. The company is focused on business development and investment opportunities to provide greater value to customers. A base capital plan of $19.4 billion from 2025 to 2029 in Virginia and Indiana is highlighted, aiming for an 8% to 10% rate base growth, which supports a continued annual EPS growth of 6% to 8%. Additionally, there is an upside plan of $2.2 billion for additional investments. The company is also working on economic development in Indiana, emphasizing the region's advantages, such as infrastructure, climate, and business environment, to attract data center operations.

The paragraph outlines NIPSCO's four guiding principles in developing data center solutions, focusing on protecting existing customers, serving new ones quickly, maintaining financial integrity, and preserving business flexibility. In January, NIPSCO filed a petition with the IURC to establish NIPSCO Genco as a regulated utility to support large load customers. This setup aims to provide benefits to system customers, enhance local communities, and offer investment opportunities. Northern Indiana is highlighted as an ideal location for data centers. NiSource Inc. aims for value creation by leveraging advanced AI models to improve operational efficiency and data insights, exemplified by its work management intelligence process.

In the middle of the year, Ohio saw a 16% improvement in work productivity due to the Apollo Continuous Improvement Program, which achieved $77 million in O&M savings through efficiency initiatives. These included a risk model initiative saving $13 million and improved scheduling processes eliminating unnecessary truck rolls. In 2024, occupational safety improved with an 8% reduction in OSHA incident rate and a 10% reduction in vehicle collisions. Infrastructure was enhanced by replacing underground cables and upgrading substations. State policy stability aided NiSource Inc.'s operations, and federal policies aligned with strategies to ensure low-cost, reliable energy for customers.

In this paragraph, the speaker thanks NiSource Inc. employees and contractors for their adherence to company values before introducing Melody Birmingham. Melody discusses the company's regulatory activities, including various rate case and rider filings. A significant focus is on the NIPSCO electric rate case, involving major investments such as unit retirements and new solar and storage projects in Northern Indiana. The company has successfully reached settlement agreements in multiple states, supporting significant investments. They emphasize their commitment to affordability, noting a decline in residential gas bills while maintaining a focus on safety, compliance, and reliability.

The paragraph highlights various economic development projects in Indiana and Virginia, supported by NIPSCO's investment in electric and gas infrastructure. These projects, including a food product facility, a concrete producer, and an EV battery plant, contribute to local economic growth by expanding the tax base, creating jobs, and reducing energy costs and carbon emissions. The company emphasizes its commitment to customer satisfaction, operational excellence, and sustainable practices. As a result, NIPSCO Electric and Columbia Gas of Virginia received high customer service satisfaction ratings, and NiSource Inc. was included in the 2024 Dow Jones Sustainability Indices.

In the paragraph, NiSource Inc. highlights its commitment to sustainability and economic development alongside energy delivery. Shawn Anderson gives an update on NIPSCO's transition from coal to renewable energy, mentioning the completion of the Dunsbridge solar project and progress on other projects like Fairbanks and Gibson. This transition supports system reliability and aligns with NIPSCO's history of executing renewable projects since 2020. Looking ahead, NIPSCO has submitted its 2024 Integrated Resource Plan to regulators, outlining future energy needs and compliance over a 20-year period. The plan considered various energy technologies, including gas, solar, wind, battery storage, and small modular nuclear.

The paragraph discusses MISO's adoption of a four-season evaluation and changes to its resource accreditation process, which now relies on availability during peak reliability risk periods. This shift necessitates new generation additions, estimated at around 900 megawatts by 2028, to meet energy and capacity needs. To address this, the team is evaluating and commercializing procurement solutions, increasing their upside CapEx plan by $400 million for necessary generation capacity. Additionally, they have raised their five-year base CapEx plan to $19.4 billion due to new economic developments, with a primary focus on their gas utilities, accounting for over 60% of the plan. Investments will be made in pipeline replacement, system modernization, and new leak detection technology to ensure safety and reliability.

The paragraph outlines NiSource Inc.'s ongoing efforts and future plans for infrastructure investments, focusing on advanced metering infrastructure, prudent capital allocation, and aligning investments with recovery mechanisms. Eighty-one percent of their base five-year plan investments are expected to begin recovery within a year. They are also exploring additional investment opportunities, particularly in transmission projects through MISO and data center development across six states, including NIPSCO. These opportunities are not yet reflected in their base or upside capital expenditures plans but represent potential future growth areas once further developed and integrated.

NiSource Inc. has strengthened its financial profile, benefiting from a supportive regulatory environment in Indiana and efficient capital market access. While 2024 was a strong financial year with earnings of $1.75 per share, driven by higher rate base investments, challenges such as increased O&M, depreciation, and non-controlling interest were noted. The company reported a decrease in fourth-quarter adjusted EPS to $0.49 per share due to similar factors. Customer growth contributed $36 million in revenue. Moving forward, NiSource has raised its 2025 adjusted EPS guidance to $1.85-$1.89, reflecting a 6% to 8% growth over 2024's results.

The paragraph discusses the company's financial strategy and outlook. They have increased their annual adjusted EPS guidance for the third consecutive year, supported by a $19.4 billion five-year capital expenditure plan that aims for an 8% to 10% rate base growth from 2025 to 2029, and an annual adjusted EPS growth of 6% to 8%. The plan assumes minimal customer growth and realistic interest rate expectations. They are confident in meeting long-term growth targets due to regulatory achievements and established capital trackers. Cost-saving initiatives, like Project Apollo, help minimize customer financial impacts, projecting less than a 5% average annual bill increase. The focus is also on maintaining a strong balance sheet.

In the fourth quarter, the company completed its forward ATM program and strengthened its balance sheet by issuing $1 billion in junior subordinated notes. The FFO to debt ratio improved from 14.1% in 2023 to 14.6% in 2024. The company maintains its target FFO to debt range of 14% to 16% using a balanced mix of cash, long-term debt, and annual equity maintenance. Additionally, the annual dividend was increased from $1.06 to $1.12 per share, aligning with a 60% payout ratio. The company prioritizes thoughtful capital allocation and infrastructure investments in a high-cost environment. Consistent execution of the business plan has led to sustained growth, with adjusted EPS guidance increasing each year and creating significant value for shareholders.

The paragraph discusses NiSource Inc.'s financial performance and strategic plans. It highlights a 6% increase in the 2025 earnings forecast, underscoring the company's strong earnings power due to strategic business reviews and regulatory support. NiSource outperforms its sector's median EPS with an 8.5% achievement since 2021. The company is confident in its financial commitments and guidance for 2024 and 2025, emphasizing a robust balance sheet and strategic investments to ensure system safety and reliability. Regulatory progress supports effective capital allocation, promising predictable financial outcomes and shareholder returns. The financing strategy is solid, with completed 2024 activities and plans for programmatic and accelerated investments for future growth.

The paragraph discusses a company's financial guidance and investment strategy. The company's rate base and adjusted EPS projections do not account for potential additional investments like data center initiatives or load growth. Their strategy includes investing in regulated utility assets, focusing on gas infrastructure and electric business tied to energy transitions. A unique aspect of their value proposition is the potential to support economic development, onshoring, and new data center projects, which sets them apart from other market options. The paragraph ends by transitioning to a Q&A session, with the first question from Julien Dumoulin-Smith of Jefferies, highlighting interest in a specific filing.

The paragraph discusses the strategic considerations and commercial arrangements related to NIPSCO's involvement with data centers, expected to be significant by 2025. The focus is on balancing traditional investment concepts like rate base with new opportunities. The speaker outlines the company's strategic pillars, including protecting existing customers, serving new ones quickly, and maintaining financial integrity, while viewing new ventures as additional upside. An important step in this plan is a filing with the IURC, which helps NIPSCO pursue this opportunity as a regulated entity, similar to a utility. Michael Luhrs is mentioned to provide further details.

The paragraph discusses a strategy for managing large load customers to protect existing customers and benefit shareholders. It highlights the flexibility and speed in accommodating new customers without impacting NIPSCO's financial integrity or existing planning. Shawn Anderson adds that this approach allows for more efficient power generation project development and cash flow generation, differing from the traditional rate-making model that NIPSCO typically follows.

The paragraph discusses NiSource Inc.'s efforts to align cash flows and secure reasonable returns over time to support ongoing construction projects. The company has improved its balance sheet by over $2 billion in 2023 and expects to add over $1 billion net in 2024, along with increased cash from operations. This financial progress enhances NiSource's flexibility to fund construction projects. During a conversation, Julien Dumoulin-Smith inquires about the company's load forecast concerning data center prospects, specifically regarding expansion phases and regulatory filings. Michael Luhrs explains that beyond their Integrated Resource Plan (IRP), no updates have been made, though discussions around these prospects have been positive. He notes a reference case of 2,600 megawatts and an upside case of 8,000 megawatts, indicating optimism about meeting the company's objectives.

The paragraph is a conversation during a conference call involving Shar Pourreza from Guggenheim Partners and Lloyd Yates, discussing potential developments in data centers in Northern Indiana. Lloyd states that they're optimistic about opportunities progressing well for 2025 but isn't willing to specify timelines for deals just yet. Shar asks about financing strategies for potential increased capital expenditures (CapEx), considering data center opportunities. Lloyd defers to Shawn Anderson, who notes that the most efficient financing would come from outperforming cash operations, allowing them to fund additional CapEx without issuing new equity.

The paragraph discusses financial strategies and operational plans of a company. It mentions their focus on capital allocation and reducing regulatory delays to increase cash from operations. They are exploring various financing options, including junior subordinated notes, without relying on equity, to achieve a target of 14% to 16% growth. It highlights their comfort with current financing programs, even if capital expenditures exceed current projections. Additionally, Lloyd Yates and Michael Luhrs address questions about data center deals, indicating that while they don't need IURC approval to announce a deal, they do need it for the Genco declination and setup. They also emphasize the advantages of this entity in providing speed and flexibility.

The paragraph is a discussion among several people, including Richard Sunderland, Shawn Anderson, and Travis Miller, during a conference call. Richard Sunderland asks about shifts in spending allocations for NIPSCO and Columbia in their current plan compared to a previous plan. Shawn Anderson clarifies that there were no significant changes in those allocations. Travis Miller then asks for an update on the La Porte facility project, specifically inquiring whether construction has started or if they're still in negotiations. Michael Luhrs responds that they are still working on the planning and negotiation stages and have not begun construction. Travis Miller also asks about the potential for serving data centers with gas directly from midstream companies, indicating an interest in such opportunities.

The paragraph is a discussion between Michael Luhrs, Lloyd Yates, and Travis Miller, with an interjection by Durgesh Chopra. Luhrs highlights the benefit of serving customers through the gas system, which has seen increased demand and is robust and reliable. Yates mentions new capital opportunities, particularly in Virginia and Ohio, where data center customers could be served off the gas infrastructure, presenting growth opportunities for the company. Travis Miller and Durgesh Chopra inquire about capital expenditures (CapEx) and returns related to the Jenco entity. Yates clarifies that returns could differ from regulated returns and indicates that cash flow benefits from the entity may materialize in the 2025 to 2029 period or later.

The paragraph involves a conversation about financial opportunities and regulatory processes. Durgesh Chopra inquiries about the timing for earnings from certain opportunities, with Lloyd Yates indicating this will likely happen in 2025 once contracts with counterparties are finalized. Steve Fleishman asks about the status of a "declination filing," and Michael Luhrs explains that they are in the process of addressing questions from other parties. He anticipates a ruling by Q3, highlighting the benefits of the filing for various stakeholders, including large load customers, NIPSCO, and other existing customers, and noting its importance in supporting project development.

The paragraph outlines the procedural process for a unique filing related to NIPSCO. Steve Fleishman asks about the process, and Michael Luhrs explains it will follow the usual Indiana Utility Regulatory Commission (IURC) process, which includes reviews and potential interventions. Melody Birmingham adds that an order is expected by Q3 of 2025, after working with stakeholders to promote understanding. The primary approval needed is from the IURC, and while future approvals from the Federal Energy Regulatory Commission (FERC) may be needed, the immediate focus is on state approval.

In the paragraph, Steve Fleishman and Michael Luhrs discuss the necessity of FERC approvals for setting up an entity and signing contracts, with Luhrs clarifying that such approvals are more administrative and not required for progressing work or signing contracts. Fleishman inquires about any changes in customer interest following a specific event, to which Luhrs responds that there has been no change in customer tone and, if anything, there is increased demand and opportunities for efficiency. The Q&A session concludes, and CEO Lloyd Yates thanks participants for their interest in NiSource Inc. before the call ends.

This summary was generated with AI and may contain some inaccuracies.