Participants

Dave Rau; Corporate Communications Manager; NiSource Inc

Lloyd Yates; President, Chief Executive Officer, Director; NiSource Inc

Shawn Anderson; Chief Financial Officer, Executive Vice President; NiSource Inc

Michael Luhrs; Chief Commercial Officer, Executive Vice President - Technology, Customer; NiSource Inc

Melody Birmingham-Byrd; Executive Vice President, President - NiSource Utilities; NiSource Inc

William Jefferson; Executive Vice President - Operations and Chief Safety Officer; NiSource Inc

Shahriar Pourreza; Analyst; Guggenheim Securities, LLC

Julien Dumoulin-Smith; Analyst; Jefferies LLC

Richard Sunderland; Analyst; J.P. Morgan Securities LLC

Nicholas Campanella; Analyst; Barclays Capital Inc.

William Appicelli; Analyst; UBS Securities LLC

Travis Miller; Analyst; Morningstar, Inc. (Research)

Steven Fleishman; Analyst; Wolfe Research, LLC

Ross Fowler; Analyst; BofA Global Research (US)

Ryan Levine; Analyst; Citi Investment Research (US)

Presentation

Operator

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the NiSource First Quarter 2025 Earnings Conference Call. (Operator Instructions) I will now turn the conference over to Dave Rau, Communications. Please go ahead.

Dave Rau

Good morning, and welcome to the NiSource First Quarter 2025 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, NiSource Utilities, Melody Birmingham.
 Today, we will review NiSource's financial performance for the first quarter and provide an update on operations and growth drivers. We'll open the call to your questions following prepared remarks. 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 earnings measures. Please refer to the supplemental slides, segment information and full financial schedules for information on the most directly comparable GAAP measure and a reconciliation of these measures.
 Now I'll turn the call over to Lloyd.

Story Continues

Lloyd Yates

Thank you Dave, and good morning, everyone. I'll begin on slide 3. The NiSource strategy is simple. We are committed to delivering safe, reliable and affordable energy to our customers. We execute this strategy through efficient deployment of capital, safe asset operations and constructive regulatory mechanisms. These are converted into a reasonable return on invested capital, enhancements to our balance sheet position, and offer a dependable and growing dividend. These are the foundation of the NiSource business plan, which continues to offer compelling value to stakeholders, driven by regulated utility operations across premium jurisdictions with diversification across geography and fuel type and disciplined capital allocation.
 Advancing to slide 4, we will step through our key priorities. Collaborative regulatory and stakeholder relationships and operating with excellence paves the way for NiSource to execute on its financial commitments. NiSource continues to work alongside stakeholders through regulatory processes to ensure resources are available for critical investments in safety, reliability and economic development.
 One example was a recent Ohio legislative proposal to modernize natural gas rate making. If passed Senate Bill 103 will shorten the time between capital outlay and recovery. This minimizes regulatory lag and maximizes the value of the investments for our communities. It also creates a special contract approval process to facilitate attracting new large low customers. This promotes economic development, creator job creation to enhance local tax base, and would make Ohio more competitive with its surrounding states.
 Our dedication to operational excellence continues to advance as we leverage AI in our operations to revolutionize our company and how we deliver service to our communities, while driving greater efficiency and enhancing the reliability of our business for our customers. Today, we reported first quarter 2025 adjusted EPS of $0.98, which is 15% above the same quarter of -- $0.85 reported one year ago. We are reaffirming 2025 adjusted EPS guidance of $1.85 to $1.89, as well as reaffirming annual 2025 to 2029 guidance for adjusted EPS of 6% to 8% -- rate base of 8% to 10% and targeting 14% to 16% [FFO to debt] in all years of the plan.
 Our plan remains resilient and executable in the current macroeconomic environment. The stability of our regulatory foundation and intentional capital deployment is fundamental to the NiSource business plan. Additionally, we are continuing commercial negotiations to support data center buildout in Northern Indiana. While these negotiations continue, we have also advanced our pending application to the IURC to establish NIPSCO and GenCo and support [Mega Load] customers.
 Our testimony in this process supports four key goals. First, it protects existing system customers by separating cost. The GenCo strategy shields existing customers from the financial impact of new capacity investments. Second, it allows us to construct the generation resources necessary to serve this customer class with the speed and flexibility that meets their needs. Third, it maintains NIPSCO's financial integrity. As with all investments, we give thoughtful consideration to the risk profile of new investments and how those drive value and ensure long-term cash flow quality for our business. Last, we're preserving flexibility in our business model by creating another tool within our portfolio to meet the evolving needs of our customers.
 The declination filing requests the commission to decline jurisdiction on a limited scope of activity related to GenCo to support a data (inaudible) strategy. We are in active settlement negotiations, and while we cannot provide an update on this call, if there is any movement on this topic, notice of progress will be filed with the commission.
 This is an exciting opportunity to advance unprecedented development in Indiana which could provide significant resources to communities and drive meaningful value to all stakeholders. We're very pleased with the progress we've made and continue to work with potential customers to make this development strategy a reality.
 Moving on to slide 5. Our commitment to deliver operational excellence is evidenced through key initiatives to standardize work and enhance risk management. Last July, we launched our work management intelligence program at Columbia Gas of Ohio. Since then, productivity gains exceeded 40,000 hours across the service territory. We have extended our work management intelligence programs to Pennsylvania, Maryland, Kentucky and Virginia. In these regions, we have observed consistent productivity gains averaging 16.5%. We are leveraging AI to revolutionize our company and its operations. To date, more than 17 operation centers use AI-generated optimized schedules resulting in over 60,000 hours of productivity improvement compared to the same period in 2023.
 And we have introduced real-time analytical dashboards enabling tracking and performance evaluation at every level from field operations to executive leadership. Continuous improvement is at the heart of the Project Apollo strategy, which targets sustainable cost savings by reducing inefficiency across our operations.
 In addition to leveraging AI, we further improve service and reduce waste from other key projects launched in 2024. Meanwhile, 75% of (inaudible) launched in 2024 continue to provide efficiency in 2025.
 Moving to slide 6, we will highlight progress made on our regulatory agenda. We are proactive on the regulatory front through general rate case and rider filings. A Maryland final order approved in April continues to a constructive path approval for critical safety, compliance and reliability capital additions in the state, including nearly $11 million in investments in 2024.
 The Virginia rate case remains on track with an order expected in the second quarter. Our Pennsylvania team filed a new rate case to recover over $400 million of anticipated investments necessary to deliver safe and reliable service to our customers. Pennsylvania has a track record of constructive regulation, and our team have achieved a settlement with stakeholders in 11 of the last 12 rate cases. The final order is anticipated in the fourth quarter.
 The (inaudible) rate case has $2.5 billion of incremental investments for our customers and communities in Northern Indiana. In February, we reached a settlement agreement making our seventh settlement in the last 10 years across both the electric and gas businesses. We expect the final order in the third quarter. Our teams are continuously engaged with key stakeholders to deliver stable and predictable outcomes for our customers by ensuring safe and reliable service in our communities.
 I'll now turn things over to Shawn.

Shawn Anderson

Thank you, Lloyd. I'd like to start on slide 7 by highlighting the progress made in our capital expenditures program over the last quarter.
 In January, [Dunns Bridge 2] launched commercial operations, making the Dunns Bridge complex one of the largest solar generation facilities in the country. [Fairbanks in Gibson] construction remains on track with in-service expected this year. All panels were purchased in advance and our on-site reducing any inflationary risk associated with tariffs on renewable assets in our planning horizon.
 Across NIPSCO, we continue to advance our energy transition strategy. To date, we've installed renewable nameplate capacity of 2,100 megawatts to support baseload generation for the region. The majority of these assets were negotiated at prices now approximately 50% lower than in today's renewable marketplace. This locks in the cost of our capital investments and positions our customers to access a low-cost energy option for the life of these assets.
 Continuing on to capital investments on slide 8. There is no change to our capital guidance for our current plan horizon. The outlook projects over $19 billion of investment over the next five years, with over $2 billion of identified upside opportunities for safety and reliability of our infrastructure and customer service offerings. Our capital plan is not susceptible to concentration risk or extended construction timelines. Investments are diversified across electric generation projects, gas and electric customer growth, and transmission and distribution modernization and system hardening. We continue to assess and actively develop our base plan to include only those investments that meet our standards.
 We continue to assess the incremental investment opportunities shared on slide 9, which includes data center generation, electric transmission and gas system investments to support incremental demand, including distribution, transmission and other infrastructure to support growing communities, the onshoring of manufacturing and new technology across the region.
 Finally, FERC-regulated electric transmission projects and MISO's multiyear long-range transmission planning initiative are opportunities to further develop across and beyond our planning horizon. These investments are unquantified and sit outside the base and upside plans, which our guidance supports today.
 Additional development of these strategies is required to meet our threshold, to include in either the base or upside capital investment plans. However, we are strongly positioned to advance these strategies. And once we've hit key milestones, new projects will flow through our plans. NiSource is able to be opportunistic in capital allocation decisions due to the strengthened financial profile of the company and enhanced balance sheet positioning.
 Now let's cover the first quarter financial results on slides 10 and 11. As Lloyd highlighted, adjusted EPS was $0.98 per share, a $0.13 per share increase versus the $0.85 reported in the same period last year, and represents a 15% year-over-year growth, primarily driven by regulated revenues, recovering capital investments from 2024s regulatory activity. These results strongly position NiSource to achieve our full year financial commitments. We have achieved over 52% of our projected midpoint earnings which is an increase of 8% compared to the same period last year.
 All planned regulated revenue increases necessary to achieve our 2025 guidance have been put into rates or pending approval. We're ahead of schedule on our financing plan and have secured at least half of our forecasted 2025 equity issuances and issued $750 million of long-term debt.
 Lloyd mentioned the resiliency of our business plans relative to the changing tariff landscape. I'll offer a few additional thoughts on this. Productivity enhancements like AI efficiency and Project Apollo reduce time and reliance on materials subject to tariff implications. Approximately 85% of our O&M and capital costs are labor and not subject to tariffs. In addition, approximately 97% of our procurement is through domestic Tier 1 suppliers, and our teams have already secured a significant portion of critical equipment to support our operations and capital plans for the five-year horizon.
 Finally, we operated in a regulated framework that reduces the impact of rising product costs on our business. It is important to note that tariffs have the potential to drive onshoring and manufacturing expansion in the US. We believe our service territory is attractive for location of facilities due to the constructive business climate, the proximity to, and availability of, low-cost energy for manufacturing services, and a skilled labor force across our region. These fundamentals underpin an attractive opportunity for economic development, providing investment and increased margin into our base plan.
 Moving to slide 12. We are reaffirming our long-term financial commitments. We are confident we will achieve 2025 guidance and sustain long-term growth throughout the planned horizon. Greater transparency and capital returns, supported by constructive regulatory frameworks, and effective recovery mechanisms, provides clearer insight into the financial projections for 2026 and beyond.
 Our internal forecasts reflect the use of established capital trackers across nearly all jurisdictions and are built on realistic assumptions for load growth, financing costs, regulatory outcomes, commodity prices and other external factors. The forecasts also include a highly visible inventory of required capital investments necessary to ensure safe and reliable energy delivery for our customers. Beyond that, we maintain upside and incremental investment opportunities not captured in our existing financial commitments, including the potential for data center development.
 We have built flexibility into our plans in advance of potential headwinds and derisk execution through our balanced and diversified business plan across six constructive operating companies. We've significantly strengthened our balance sheet and have enhanced our visibility into how the investments we make convert into earnings through reduced regulatory lag and efficient financing plans.
 Slide 13 highlights those five-year funding plans. We are reaffirming 14% to 16% FFO to debt in all years of the plan, as well as our guided annual equity needs through 2029. And a balanced mix of cash from operations, new long-term debt, and $200 million to $300 million of equity each year enables us to maintain our capital structure and strong balance sheet position. In addition to traditional sources of funding, the potential use of hybrid securities and senior unsecured debt, enhance flexibility and diversification, enabling us to grow without sacrificing credit quality.
 And finally, on slide 14, you can see we are on track to meet our 2025 financial commitments and build stability into 2026. We are confident in our ability to achieve near-term and long-term guidance given our strong business fundamentals.
 NiSource offers investors a diversified and fully regulated utility with the opportunity to invest in programmatic gas infrastructure and long-term energy transition, for a fully integrated electric business. This emerging opportunity to support unprecedented energy development and power demand, resulting from robust economic development, onshoring, as well as new data center development truly differentiates the value proposition relative to many alternatives in the marketplace today.
 I'd now like to turn the call over to the operator for Q&A.

Question and Answer Session

Operator

(Operator Instructions) Shar Pourreza, Guggenheim Partners.

Shahriar Pourreza

Just on the NIPSCO GenCo filing, I mean, obviously, understanding it's still ongoing. Do you need to receive an outcome in the proceeding before you announced the signed agreement? Or can a deal be announced prior?
 I guess, in other words, do you have a customer you could announce with the approval of the new structure?

Lloyd Yates

Michael, do you want to handle that one?

Michael Luhrs

Shar, we could go ahead and proceed with a special contract and announce a special contract without having the GenCo completed. The key of the GenCo is that it provides the flexibility that Lloyd mentioned, really providing the significant protection of the existing customer base and allowing for the speed and flexibility that we know the large load customer needs, while enabling the protections that would facilitate a special contract execution.

Shahriar Pourreza

Got it. Just remind us on the PPAs. Obviously, the structure is still -- you're still working through the structure. But if the pricing of the PPAs are above what you're afforded from a regulatory perspective, just remind us how do we think about that?

Michael Luhrs

So one of the nice components of the GenCo structure is really allows the flexibility to respond to multiple stakeholder needs. And those stakeholder needs, including if there are specific resources that would enable the speed to market, the ramp that would be needed and/or the resource mix that would be needed in order to meet their goals.
 So the point of that is, we would do that. And then NIPSCO will still be the resource adequacy provider to the market. The IRP and the flow-through of the resource adequacy would go through NIPSCO and at which time we would file a PPA between GenCo and NIPSCO, which would be approved by the commission and follow through.
 So in other words, it's not a matter of if the PPA is pricing relative to our existing system, it's relative to the special contract, which we would file for execution.

Shahriar Pourreza

Got it. Okay. That's helpful. And then just lastly, the $2.2 billion that's currently outside of the base plan. Should you get a signed agreement, do you see an opportunity to accelerate the [$2.2 billion]? So I guess, in other words, is there other large load customers embedded in that assumption? Or would that be incremental to the [$2.2 billion]?

Lloyd Yates

So the [$2.2 billion] upside does not include any data center development or economic development capital, the [$2.2 billion] upside or other projects in the regulated utilities that are -- that could be potential upside like AMI, pipeline integrity and transmission. There's no data center capital there. Any data center capital would be incremental to the plan.

Operator

[Jenson Ward], Jefferies.

Julien Dumoulin-Smith

It's actually Julien here. If I could follow up on a couple of nuances here. There's been a lot of talk in the state around co-retirements and federally for that matter. I'd love to hear how you guys are thinking about that juxtaposed against your plan?
 And specifically, how you think about potentially extending the lives of your assets, and to what extent that would or could impact your CapEx? Because it's not obvious even if you did hold open your assets, if that would change is that your current spending plans and/or your future spending plans predicated on some of this incremental data center load?

Lloyd Yates

Yes. So Julien, we are currently in the middle of assessing the impact of those executive orders. Today, in our plan, we are still on track to retire [Shafer] at the end of 2025 in Michigan City at the end of 2028. Understanding that and taking a look at the executive orders, we're assessing what it would take to extend those. And we'll work with the various federal and state regulators to do what's best for our customers and various stakeholders and other stakeholders. But the important point is we're in the middle of a deep assessment on those.

Julien Dumoulin-Smith

Got it. Okay. So not ready to say yet about what that -- the net impact would be. And then maybe just if -- excellent. And then keeping it in the same realm here legislatively, I understand the state recently passed some updated CPCN procedures and procedural timeline requirements of that.
 Can you speak to how that might provide a further avenue for your data center filings, especially the extent to which that your novel declination effort may or may not go through? I mean does it provide you a further expedited effort to get a timely outcome, if you will? Seems like a third way?

Lloyd Yates

I think you talked about Senate Bill 1007. So the [declaration] filing is separate to 1007. 1007 just gives you another path for large load customers. I mean -- so we're pursuing the [declination] filing. Remember, we said in the past, that's only one of the mechanisms we have to deal with the this [discounter] party these, load opportunities. Senate Bill 1007 just gives us a second, or even a third pass.

Julien Dumoulin-Smith

Right, indeed. And just does that make it more likely? I mean when you think about the pathways here and what you're seeing -- in fact, let me just ask it directly here.
 I mean with respect to GenCo, is your expectation here that you would -- given that you've now seen very clearly where parties (inaudible) have a pathway to potentially settle this out? Or at what point do you kind of elect to pursue this expedited [CTCM] process especially given how timely some of this generation may need to be moving forward?

Lloyd Yates

So let me say a couple of things. One is we're in the midst of settlement discussions, so I can't talk in detail about those because they have not been concluded. I think in terms of following this GenCo, we think it's a really good path in terms of dealing with counterparties. It meets the four pillars I talked about in my prepared remarks. Good for customers. Good for our financial integrity. Gives us speed and flexibility we need. And we're optimistic about completing that process. But we're also looking at Senate Bill 1007 for another pass and we'll evaluate that if GenCo doesn't pan out for us.
 Mel, do you want to comment on that?

Melody Birmingham-Byrd

Sure. Julien, thanks for your question. So to Lloyd's point, [House Bill 1007], it really didn't change any current available options for utilities to serve large load customers. And also to Lloyd's point, what it did do was at those additional options. So expediting the generation resource planning process as well as it provides for a [150-day] review of an application for a utility to serve the load. So our strategy remains the same. So it really doesn't change any of the options that are available for us to serve large load customers.

Operator

Richard Sunderland, JPMorgan.

Richard Sunderland

Appreciate discussions are still ongoing, but could you just offer any thoughts on sort of the pace and engagement with your large load -- prospective large counterparties, maybe relative to 4Q or last fall? There's certainly been a lot of attention here broadly on sort of hyperscaler CapEx reaffirmations, what have you. Are you seeing that following through on your end in talks?

Lloyd Yates

Yes. Let me address that. If you go back to the end of 2024 and then in February 2025, what I said was that hyperscalers, large load growth would be a 2025 activity. And we'd really be focused on 2025.
 What I'll say to you is we're making excellent progress. But what's really important to understand is these are complex and complicated transactions, and it may require a lot of time, and I'll say, management attention. But we want to make sure we get this right.
 I'll go back to my four pillars and getting it right, it's good for customers, goods for financial integrity, meets the speed and flexibility of our counterparties and protects our business model. And I'd say we're walking down that path. We're excited about this opportunity. We think it's really good for NiSource and good for all of our stakeholders. And as soon as we have more information or more news, we will communicate that out to the [street] as fast as possible.
 I think if you take a look at with some of the hyperscalers, the developers have talked about in terms of their capital plans, they continue to be -- they continue to actively invest in building and developing data centers. I think that will give you a signal on how robust the network of people who are interested in that. If you look at what we talked about in terms of Indiana being a great place to invest, I will tell you that we have a lot of opportunity, but we want to make sure we get this right.

Richard Sunderland

Great. I appreciate the color there. And then circling back on the GenCo discussion. What would the regulatory cap structure look like for that entity I think there is a peer recently filed a tariff that specifies a higher ROE equity layer for this type of activity.
 So would this -- would you pursue something separate versus what NIPSCO is authorized? Is that something we could see in the settlement? Or do you need a separate contract or rate case to the side? Any thought there would be helpful.

Lloyd Yates

Michael?

Michael Luhrs

So we haven't discussed or disclosed anything associated with the financing structure with GenCo. We are continuing working for and focusing on completing the special contracts with customers and working through that development of those activities.

Operator

Nick Campanella, Barclays.

Nicholas Campanella

I just wanted to follow up quickly on the settlement discussions. Just do you anticipate hearings to still kick off at the end of this week here if a settlement is coming?

Lloyd Yates

Again, as I mentioned, we are in a midst of settlement discussions. When we have detail on those, we'll let you know as soon as possible, but we can't comment on specific discussions or timing with respect to those right now.

Nicholas Campanella

Okay. No problem. And I just wanted to confirm, as you think about getting to a commercial agreement with any customer that is not explicitly tied to the timeline of these proceedings or the potential settlement?

Lloyd Yates

That is correct.

Nicholas Campanella

Okay. Great. And then just on the assessment on the call, just going back to Julien's question. You have this NIPSCO IRP out there calling for long-term resource solutions. That's I would say that's probably likely well beyond the current time frame for how long the coal could stay online for us.
 So just do you see that truly impacting your long-term procurement strategy at this point? Just to supplement the generation needs and the load growth that was detailed in (inaudible) IRP?

Lloyd Yates

Michael?

Michael Luhrs

So when we look at the IRP and we look at the extended plan with the IRP, we will need additional resources for the IRP despite all alternatives and evaluating the executive orders.
 As you look at MISO's direct loss of load rules and the changes associated with resources, and the accreditation of resources we know we're going to need additional capacity on the system in order to facilitate the reliability and resiliency of the system.

Operator

Bill Appicelli, UBS.

William Appicelli

Just another question on the GenCo I guess it's clear that you can make the special contract filing concurrently or separately from resolution of the declination filing. But given some of the complexities and -- that you've outlined, is it prudent? Or is it a preferred outcome to have sort of visibility on the declination filing before filing a special contract, given that some of the framework would likely need to be embedded within the terms of the contract?

Michael Luhrs

So we feel the declination filing provides a very strong capability to meet the core pillars that we've discussed previously. Obviously, we would -- we look forward to the declination filing moving forward. But when we think about protecting the existing customer base, providing the resource alternatives, we can do that through multiple mechanisms regardless of the declination filing.
 However, the declination filing and the results of that we will provide a very strong capability to meet stakeholders, large load customer needs and protect our existing customer base. So when we look at the alternative with 1007, or we look at other alternatives that are available to us, we have multiple paths by which to get to the solution. However, the [declination] filing is we feel like is the best alternative by which to meet all stakeholders' needs.

William Appicelli

Okay. All right. Great. And then can you just speak to some of the federal level, some of the policy changes that have materialized here around tariffs? And then maybe speak to exposure around any potential changes to the IRA as it relates to renewable tax credits and transferability?

Lloyd Yates

Shawn, you want to take that one?

Shawn Anderson

Sure thing. On tax transferability and IRA, PTC and ITC, most of our renewable projects plan to be online by the end of this year. It leaves a limited window for direct PTC, ITC challenges that are not retroactive. Really only [Templeton] is the only base plan asset really that's beyond the horizon here in 2027.
 So the plan assumes an ongoing PTC transferability, 2026, ['27 and '28] of about 40 to 60 basis points. So we're pro tax credits to benefiting customers and helping existing customers today realize those tax credits. That's helpful to keep energy costs down for customers today. But as we think about the financing plan implications and what the IRA brings to the existing plant itself, we believe our existing plan, the strengthening we've done in the balance sheet, the cushion above our downgrade threshold, I wouldn't suspect a change to our financing plan as a result of potential appeal of tax transferability.
 And then I think we noted this in my prepared remarks on the implications associated with tariffs. We're in a really strong position, both from a standpoint of labor activities, a high degree of domestic content in our supply chains, continuous improvements such as Project Apollo. We think that those can help us face the potential changes associated with tariffs a fully regulated compact itself helps us get line of sight to where things could reset themselves.
 We've built a track record of being thoughtful around long-term energy costs for our customers and evaluating those overall impacts, delivering flat O&M really for an extended period of time amidst a range of economic conditions. We'll be able to rightsize our plans to ensure that we can pass this forward and face whatever comes our way from tariffs without any changes to our existing financial commitments.

Operator

Travis Miller, Morningstar.

Travis Miller

One more on GenCo, if you don't mind. As you're talking either through the settlement and the [official] discussions or just outside of the official discussion, are there any parties that are strictly opposed to this? Or is it just a matter of devils in the details, getting all of those aligned?

Lloyd Yates

Again, Travis, we can't comment since we're in the middle of active settlement discussions on the GenCo. We can't comment on the position of any specific party right now.

Travis Miller

Okay. That's fair. Other (inaudible) transmission. I think as Shawn mentioned milestones in terms of other projects. I wonder if you could characterize what some of those milestones are, what you're waiting to see or hear transpire before you add some of those transmission projects?

Lloyd Yates

Shawn?

Shawn Anderson

Yes. Sure thing, Travis. So when we think about MISO long-range transmission projects, both the executability from an operational standpoint, the construction, and making sure that we understand what the costs are going to be to install those assets and operationalize those assets, and then juxtapose that with the regulatory compact itself, making sure that we understand the mechanisms that will pick up those costs. Once we reach that degree of certainty around those two elements, you'll see those flow into our base plan.
 As a reminder, we do have a nominal amount of MISO [Tranche 1] projects in our base plan as well as some in our upside plan, which Lloyd highlighted earlier. We do not have MISO long-range transmission Tranche 2 projects in either the base plan, or really in the upside plan, as it mostly persists outside our existing financial plan Horizon. But we do expect the Tranche 2 projects to start to come into fruition, towards the latter part of this plan Horizon. And we think that could be additive to the upside plan once we've gone through the work to commercialize and develop our plans to operationalize those assets.

Travis Miller

Okay. Great. When you (inaudible) plan on horizon, talking 2029 and beyond, or 2030?

Shawn Anderson

Yes, that's correct. Yes.

Operator

Our next question comes from the line of Wolfe Research.

Steven Fleishman

Yes. It's Steve Fleishman. I'm going to avoid asking about Indiana. But the -- in your kind of bullet about data centers, as you said, to support data center strategies across Indiana, Ohio and Virginia. I might have missed some of this, but just could you talk a little more on what you're doing in Ohio and Virginia related there and opportunities for you?

Lloyd Yates

Well, I'll (inaudible) to Michael or Melody, which one? Go ahead, Melody.

Melody Birmingham-Byrd

Steve, thanks for asking the question. So we do talk a lot about Indiana being right for data centers, Northwest Indiana, but we're seeing activity in Ohio as well. And so our teams are working with the local and state entities to look at what these data center needs are, and how and if we can support them. And so I'll just say that we're staying engaged with the local and state economic development entities to look in how we can serve those customers, those potential customers.

Lloyd Yates

Yes. To Melody's point, most of that investment for natural gas infrastructure pipeline. So if you think about Virginia and Ohio, as these developers come, they're going to need energy. So that allows us to invest capital to put in gas pipeline to support data center activity.

Steven Fleishman

Understood. Separate topic, just the MISO auction outcome that we just had. I know it's for kind of more of a near-term year, but just any kind of broader thoughts from that because obviously a big uptick in pricing. How it impacts your plans?

Michael Luhrs

Yes. We've seen the MISO auction, and we are evaluating its results, and we look through the IRP consistently to make sure that we have the resource adequacy we need. But when we look at the MISO auction right now, we're well positioned within the current plans we filed from the IRP.

Operator

Our next question comes from the line of the company Ladenburg.

I guess a procedural question. If you wanted to delay the start-up hearings on Friday, you would have to file notification either today or tomorrow. Is that correct?

Lloyd Yates

That is correct.

Great. And then the other question I have is beyond sort of what you're seeing with data centers, are you seeing any activity with respect to onshoring or industrials announcing sort of major expansions in Ohio -- I mean, in Indiana?

Lloyd Yates

Yes. I think -- so, again, we're seeing recently for battery manufacturers we're seeing some expansion. One of the things we're seeing. So the answer is yes. Indiana, I'd say, very well positioned for (inaudible) and with one of the opportunities being a battery manufacturer. But in terms of economic development, our team up there is really busy with manufacturing above and beyond data centers.
 Shawn, do you want to weigh in on that?

Shawn Anderson

Yes. Just a couple more. I mean the cold storage sector continues to grow in Indiana. We've seen a couple of food organizations come in with food manufacturing and cold storage providing jobs as well as $70 million of capital investment into the region, $70 million for their facilities, not ours.
 But cold storage also in [Crown Point] also continuing the development in that theme. So NIPSCO has continued to see a general increase on manufacturing projects across the year. Several international companies are exploring opportunities to establish in Indiana, a plastics manufacturer, a biopharmaceutical firm, a recycling operation, each poised to deliver new job opportunities in Indiana and bring significant investments in the state. And as well as EV battery manufacturers, which we've seen come up a couple of times.
 So Indiana continues to be robust, but we're also seeing it in Virginia. We're also seeing it in Ohio. You highlighted that one. So we're seeing it across our service territory all of this really precedes any of the changes from the tariff landscape, right? Most of this was already in pipelines working and our states do a great job of trying to attract global companies to come into our region.

Operator

Ross Fowler, Bank of America.

Ross Fowler

So I'll be brave and ask another one about Indiana. So -- but I won't ask about the settlement process because I'm not going to make you answer that one.
 Just from like a 30,000-foot view, right? It seems like GenCo sort of versus a straight large load tariff filing has added a little bit of regulatory process and complexity at the beginning. Can you kind of just, in your mind, frame from a very high level, what you guys see as the advantage of the GenCo structure?
 I mean you kind of touched on it with (inaudible) pricing differences with large load customers, but other advantages as you see them?
 And then the corollary to that question is, as you look to Steve's question around Ohio and other segments. If you're successful with GenCo in Indiana, do you see like a (inaudible) in Ohio or something like that to structure it similarly?

Lloyd Yates

So let me go back to why we believe GenCo is our preferred path to success. And I think it's a really good question.
 I think the first one, I talk about our current priorities. It protects our existing customers by allowing us to separate the cost -- separate [costs]. I think second, it gives us a faster speed to market. Remember, we're asking the [IU RFC] to decline the CPCN which is typically a 240-day process. So that gives us a faster speed to market to deliver to generating resources for the counterparties. And if you listen to the counterparties and look at their capital needs and how fast they want to move speed to market matters a lot.
 I think that negotiating a special contract with the counterparties, gives us a lot of opportunity in terms of flexibility as we look at risk versus return in this -- I mean, this is one of the complicated parts of the process but it could give us more opportunity depending on the risk we're willing to take. And I think that matters for us, and lets us preserve the flexibility of our current business model.
 If you look at the last three years, I think our EPS CAGR has been 8.5%. So we have a really strong financial plan, and we want to protect the integrity of that plan, and to make sure that this opportunity goes above and beyond our current business financial plan. So we like it. We think it's -- I mean, I'm biased, but we think it's a really good idea. We're excited about it. We're excited about the opportunity.

Ross Fowler

That's great, Lloyd. And then you touched on it, there's a different sort of risk dynamic maybe connected with these large load customers? So doing the GenCo structure allows you to think about return differently. I know you haven't kind of fully decided the capital structure yet, but could you think about leverage differently as well?

Lloyd Yates

Shawn?

Shawn Anderson

This just goes back to Lloyd's comments on flexibility. We've got a lot of different avenues that we could go to make this sufficient for our customers and for our shareholders. We're motivated to bring the lowest cost of financing into the marketplace that we possibly can. I think everyone is in this particular case, and it will help us advance this strategy quickly.

Operator

Christopher (inaudible), Mizuho.

Just one for me regarding O&M. It's kind of ticked higher in the last couple of quarters. And I think, Shawn, you discussed some of the successes at Apollo and the flat O&M expectations.
 But just to put a finer point on it, as far as the run rate from here, are you expecting Apollo to kind of have deflationary impacts from here? Or how are you thinking about it?

Lloyd Yates

Shawn?

Shawn Anderson

Over the course of the year, we continue to expect O&M to be flat year-over-year at or around that $1.4 billion level that we've been able to maintain since 2016. Project Apollo helps drive that through an array of different opportunities, both efficiency as well as just identifying waste that can be onetime in nature and reduce the overall cost profile of the business. And our employees lead that each and every day. New ideas populate what fuels its mission and how we are able to obtain that flat O&M on a year-over-year basis again, really since 2016.
 That said, we also need to invest in our system. We make strategic investments to risk-adjust the system on an ongoing basis, things like vegetation management, leakage. They don't always track the same quarter-over-quarter, but they get to the right place at the end of each and every year, and we try and pick the opportunities that we have to ensure that we can be always risk-adjusting the system to ensure reliability of our system at all times.

Operator

Ryan Levine, Citi.

Ryan Levine

Two questions. In terms of your labor contracts, can you remind us when those labor agreements expire and what's the process of renegotiating (inaudible) is?

Lloyd Yates

[Base start mobile], I'll let (inaudible) answer this.

William Jefferson

The NIPSCO contract ends -- the end of March '26. The Pennsylvania contract ends at the end of August '26. And I don't have the dates for the Ohio contracts top of mind, but those are two of the [biggest].

Lloyd Yates

(inaudible) is renegotiated in '26.

William Jefferson

Everything gets renegotiated in 2026.

Ryan Levine

Okay. And then in terms of the EV or electric vehicle supply chain, what portion of your load in Indiana and across your service territory is tied to that industry, both historically and on a prospective basis?

Lloyd Yates

Extremely minimal.

Ryan Levine

Okay. So the EV battery is to the earlier comment is extremely minimal to the outlook despite the --

Shawn Anderson

Yes, Ryan. When you think about what the EV battery manufacturers need, ironically, it's natural gas. And the expansion of our natural gas network itself, and really with a high-capacity trunk line enables us to then market potentially to new communities that need the development of natural gas and extend the overall network itself. So it's actually pretty small on the electric system itself, larger on gas.
 But of course, as you know, the transport volume on gas isn't a significant revenue driver for us. It's really getting the infrastructure deployed and then enabling us to potentially gain more customers with a lower-cost fuel and I'm more reliable fuel at that.

Operator

There are all further questions at this time. I will turn the call back over to Mr. Lloyd.

Lloyd Yates

Yes. So we thank you for your continued interest in NiSource and your questions, and we look forward to communicating with you in the future. Have a great day.

Operator

This concludes today's conference call. You may now disconnect.

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