NiSource Inc Stock

NiSource Inc. (NiSource) operates as an energy holding company.

The company operates under the Public Utility Holding Company Act of 2005 whose primary subsidiaries are fully regulated natural gas and electric utility companies, serving approximately 3.8 million customers in six states. NiSource’s principal subsidiaries include NiSource Gas Distribution Group, Inc. (a holding company that owns Columbia of Kentucky, Columbia of Maryland, Columbia of Ohio, Columbia of Pennsylvania, and Columbia of Virginia), and a controlling interest in NIPSCO (a gas and electric company).

Business Strategy

The company’s business strategy focuses on providing safe and reliable service through its core, rate-regulated, asset-based utilities, with the goal of adding value to all of its stakeholders. The company’s utilities continue to advance its core safety, infrastructure and environmental investment programs supported by complementary regulatory and customer initiatives across the six states in which it operates. The company’s Safety Management System (SMS) is the established operating model within NiSource.

Segments

NiSource has two segments: Gas Distribution Operations and Electric Operations.

Gas Distribution Operations

The company’s natural gas distribution operations serve approximately 3.3 million customers in six states. Through its wholly-owned subsidiary NiSource Gas Distribution Group, Inc., the company provides natural gas to approximately 2.4 million residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, and Maryland. Additionally, the company distributes natural gas to approximately 0.9 million customers in northern Indiana through its subsidiary Northern Indiana Public Service Company LLC (NIPSCO). The company operates approximately 55,000 miles of distribution main pipeline plus the associated individual customer service lines and 1,000 miles of transmission main pipeline located in its service areas. Throughout its service areas the company also has gate stations and other operations support facilities.

Electric Operations

The company generates, transmits and distributes electricity through its subsidiary NIPSCO to approximately 0.5 million customers in 20 counties in the northern part of Indiana and also engages in wholesale electric and transmission transactions. The company owns and operates sources of generation, as well as source power through Power Purchase Agreement (PPAs). The company continues to transition its generation portfolio to primarily renewable sources. The company has four owned projects in service: Rosewater, Indiana Crossroads Wind, Indiana Crossroads Solar, and Dunns Bridge I. Rosewater went into service in 2020 and Indiana Crossroads Wind went into service in 2021. The Indiana Crossroads Solar and Dunns Bridge I Solar projects went into service in June 2023. In October 2021, NIPSCO completed the retirement of two coal-burning units with installed capacity of approximately 903 MW at Schahfer Generating Station, located in Wheatfield, Indiana (IN). As of December 31, 2023, the company had multiple PPAs that provide 700 MW of capacity, with contracts expiring between 2024 and 2040.

NIPSCO’s transmission system, with voltages from 69,000 to 765,000 volts, consists of approximately 2,920 circuit miles. NIPSCO is interconnected with eight neighboring electric utilities. The company operates 66 transmission and 250 distribution substations, and owns approximately 311,000 poles. Additionally, the company owns and operates reactive resources to supplement generation when necessary.

In November 2021, NIPSCO submitted its 2021 Integrated Resource Plan (2021 Plan) with the Indiana Utility Regulatory Commission (IURC). The 2021 Plan builds upon the 2018 Integrated Resource Plan which outlined NIPSCO’s plan to retire its coal generating assets by 2028. The 2021 Plan affirmed the 2018 retirement decisions and calls for the replacement of the retiring coal generating assets with a diverse portfolio of resources, including demand side management resources, incremental solar, stand-alone energy storage, new gas peaking resources and upgrades to existing facilities at the Sugar Creek Generating Station, among other steps.

NIPSCO participates in the MISO transmission service and wholesale energy market. MISO is a nonprofit organization created in compliance with FERC regulations to improve the flow of electricity in the regional marketplace and to enhance electric reliability. Additionally, MISO is responsible for managing energy markets, transmission constraints and the day-ahead, real-time, Financial Transmission Rights and ancillary markets. NIPSCO has transferred functional control of its electric transmission assets to MISO, and transmission service for NIPSCO occurs under the MISO Open Access Transmission Tariff. NIPSCO generating units are dispatched by MISO which takes into account economics, reliability of the MISO system and unit availability. During the year ended December 31, 2023, NIPSCO generating units, inclusive of its BTA projects, were dispatched to meet 49.5% of its overall system load, and the remainder of the overall system load was procured through PPAs and the MISO market.

Seasonality: The company’s electric operations are subject to seasonal fluctuations in sales. Revenues from electric operations are more significant during the cooling season, which is primarily from June through September.

Regulations

NiSource’s service company and operating companies are subject to varying degrees of regulation by the FERC. As natural gas LDCs, Columbia of Maryland, Columbia of Ohio, Columbia of Pennsylvania, Columbia of Virginia, and NIPSCO have limited jurisdictional certificates to transport gas in the respective service territories into interstate commerce. As an electric company, NIPSCO has Market Based Rate authority and is a Transmission Owner subject to FERC jurisdiction.

As a Transmission Owner subject to the MISO Transmission Owners Agreement and Tariff, NIPSCO has various FERC jurisdictional obligations such as maintaining its Attachment O formula rates and corresponding protocols. NIPSCO also has FERC approvals to make affiliate transactions between itself and various JVs. NIPSCO’s officers, on the electric side, are also subject to FERC’s interlocking directorate rules and reporting requirements.

Under the Protecting Our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2020, PHMSA has revised, and continues to revise, the pipeline safety regulations to require operators to update, as needed, their existing distribution integrity management plans, emergency response plans, and operation and maintenance plans. Regarding federal policies, the company continues to monitor the implementation of any final and proposed climate change-related legislation and regulation, including the IIJA, IRA, EPA's final methane regulations for the oil and natural gas industry, and EPA's proposed Waste Emissions Charge for Petroleum and Natural Gas systems. The company has identified potential opportunities associated with the IIJA and the IRA.

History

The company was founded in 1847. It was incorporated in 1999. The company was formerly known as NIPSCO Industries, Inc. and changed its name to NiSource Inc. in April 1999.