NiSource continues to advance its energy transition, with 1,750 MW of owned renewable and storage projects and 800 MW of renewable PPA projects already in service as of June 30, 2025. Key projects like Dunns Bridge II, Fairbanks, and Gibson achieved mechanical or substantial completion, leading to significant milestone payments to developers.

The company remains on track to make capital investments totaling $4.0 billion to $4.3 billion during 2025, with an expected $19.4 billion investment during 2025-2029 to support its generation transition strategy and ongoing utility infrastructure upgrades, enhancing safety and reliability.

NIPSCO GenCo filed a declination of jurisdiction petition in January 2025 to establish a framework for accommodating 'megaload customers,' including data centers. This strategic move aims to manage potential power demand and secure generation/transmission capabilities, indicating a proactive approach to emerging market opportunities.

The company completed the first and second phases of a three-phased Work and Asset Management (WAM) ERP program, which optimizes scheduling, dispatch, and execution of field operations across electric and gas distribution, enhancing operational efficiency and reducing enterprise risk.

Management reports being on track to retire R.M. Schahfer's remaining two coal units by the end of 2025 and Michigan City Generating Station by the end of 2028, aligning with the 2018 and 2021 Integrated Resource Plans to replace them with lower-cost, cleaner options.

NIPSCO's Electric rate case filing resulted in a Joint Stipulation and Settlement Agreement approved by the IURC on June 26, 2025, with new rates to be implemented starting July 2025. This demonstrates effective management of regulatory processes to ensure cost recovery and stable returns.

The filing highlights increased likelihood of facilities being targeted by military strikes, terrorism, or cyberattacks due to escalating Middle Eastern conflicts, particularly involving Iran. This could significantly disrupt global supply chains and capital markets, impacting operations and financial position.

The company acknowledges increased frequency of severe and extreme weather events, such as volatile temperatures, storms, and flooding, which could materially impact facilities, energy sales, and results of operations. Mitigation efforts are ongoing, but the unpredictability remains a significant concern.

New EPA deregulatory actions and proposed repeals of GHG emissions standards, alongside evolving state-level GHG policies (e.g., Maryland's Climate Solutions Now Act), create an uncertain regulatory environment. The company continues to assess the impacts of changing PHMSA pipeline safety regulations and the Legacy CCR Rule, which accrued an additional $38.8 million in Q2 2025.

Columbia Operations saw residential customer growth of 11,348 (0.5%) for the six months ended June 30, 2025, while NIPSCO Electric residential customers increased by 3,785 (0.9%) and NIPSCO Gas residential customers by 6,596 (0.8%). This indicates stable customer acquisition in its regulated service areas.

The company's status as a fully regulated utility allows for state-approved recovery mechanisms (e.g., GCA, FAC) for prudently incurred energy costs, providing a competitive advantage by mitigating commodity price risk and ensuring stable revenue streams, as evidenced by the NIPSCO Electric rate case approval.

NiSource is actively evaluating potential load growth from data centers and expects future growth in per-customer electric usage due to increasing electric applications like EVs. This forward-looking approach positions the company to adapt to evolving market demands and maintain relevance.

Total Operating Expenses for the six months ended June 30, 2025, increased by $473.3 million (24.0%) to $2,443.9 million. This was primarily due to a $319.6 million increase in the cost of energy and a $49.7 million increase in depreciation and amortization, reflecting capital investments and commodity price fluctuations.

The majority of energy costs are tracked costs passed directly to customers, and regulatory trackers allow for recovery of certain O&M, depreciation, and tax expenses. This mechanism ensures that increases in these costs generally have no material impact on total operating income, despite the rising expense figures.

Management continues to monitor risks related to order and delivery lead times for materials, potential unavailability of raw materials, and elevated prices. Additionally, increased competition for employee and contractor talent is driving up costs to attract and retain a qualified workforce, posing ongoing operational challenges.

The company is upgrading and modernizing its electric system to enhance safety and reliability by deploying advanced grid technologies. This includes core infrastructure investment programs across all six states of operation, supported by regulatory capital programs.

NiSource is enhancing safety and reducing methane emissions on its gas systems through modernization programs and the utilization of advanced leak detection and repair technologies. This initiative is a key component of its energy transition strategy and operational excellence roadmap.

The implementation of the WAM ERP program, with its first two phases completed, is designed to optimize the scheduling, dispatch, and execution of field operations. This digital transformation effort aims to streamline work, improve logistics, and ensure the company remains on modern systems.

NiSource completed the issuance and sale of $1.5 billion of 5.850% senior unsecured notes maturing in 2055 and $900.0 million of 5.350% senior unsecured notes maturing in 2035 in Q2 2025, resulting in approximately $1.616 billion in net proceeds. This debt financing supports ongoing business operations and significant capital expenditures.

Net Cash Flows used for Investing Activities increased by $972.3 million to $(2,566.3) million for the six months ended June 30, 2025, primarily due to milestone payments to renewable generation asset developers. The company plans $19.4 billion in capital investments for 2025-2029, with a strong focus on its generation transition strategy.

The company's net available liquidity increased to $2,430.4 million as of June 30, 2025, from $1,567.6 million at December 31, 2024, supported by cash and cash equivalents. The debt to capitalization ratio of 55.2% remains well below the 70.0% covenant, indicating sound financial health and capacity for future financing.

NiSource reiterated its commitment to achieving net zero Scope 1 and Scope 2 GHG emissions by 2040, building on a 72% reduction from 2005 levels by the end of 2024. This goal is supported by ongoing coal retirement, renewable generation deployment, and advanced leak detection programs.

As part of its energy transition, NiSource has placed 1,750 MW of owned renewable and storage projects and 800 MW of renewable PPA projects in service. An additional 400 MW of renewable BTA projects are under development, demonstrating concrete steps towards a cleaner energy portfolio.

The company continues to enhance safety and reduce methane emissions on its gas systems through modernization programs and advanced leak detection and repair. NiSource is certified in conformance to API Recommended Practice 1173, underscoring its commitment to operational excellence and public safety.

The EPA announced 31 deregulatory actions and proposed rescinding the 2009 Endangerment Finding and repealing GHG emissions standards for fossil fuel plants. While potentially saving NIPSCO customers $675 million, these actions introduce uncertainty regarding the broader federal regulatory environment for clean energy initiatives.

Maryland's Climate Solutions Now Act mandates significant GHG reductions and promotes electrification, with the PSC ordering staff to prepare regulations eliminating company contributions to main/service extensions for new residential/commercial customers. These policies could materially impact Columbia of Maryland's business, creating regional challenges.

NIPSCO's 2024 IRP incorporates anticipated load growth from data centers and other economic development. Additionally, NIPSCO expects future growth in per-customer electric usage due to increasing electric applications like EVs, signaling a strategic focus on adapting to and capitalizing on these industry trends.