NiSource, a US utility company, has announced a 20-year energy agreement with Microsoft, starting in 2028, for a northwest Indiana data center campus that is expected to support economic growth in the region and expand customer savings.
The agreement was reached through NiSource Generation Company LLC (GenCo), which serves large-load customers in such a way as to protect Northern Indiana Public Service Company LLC (NIPSCO) customers from incremental costs. The structure ensures that large-load customers fund the generation and infrastructure they require in full.
“This agreement reflects the balanced approach we believe is needed for Indiana to attract significant investment and create long-term jobs,” said Lloyd Yates, NiSource President and Chief Executive Officer.
“Microsoft has always been committed to paying our own way and identifying long-term solutions like this one to ensure that our data centers don’t increase electricity prices for other ratepayers,” said Jeff Riles, Microsoft Senior Director of Energy Markets. “Our partnership with NIPSCO will not only support continued growth and protect ratepayers but also help to support a reliable grid for years to come that the communities of Northern Indiana rely on.”
NiSource has said that the agreement builds on the previously disclosed US$ 1.4 billion in customer savings over the life of data center customer contracts, increasing total expected savings to approximately US$ 1.75 billion.
“Our priority remains clear: protect existing customers, support safe and reliable service, and ensure that new growth contributes tangible benefits to the communities we serve. When structured correctly, economic development can be part of the affordability solution,” said Yates.
According to a press release, GenCo intends to increase its power pool portfolio by approximately 1,100 MW to serve Microsoft’s data center and NIPSCO’s customers. The company added that in connection with the Microsoft agreement, GenCo will contract 600 MW of battery storage under a long-term tolling agreement. An AGP Group affiliate will develop and construct the facility, which will be added to GenCo’s pool resource assets for multiple large-load customers.
GenCo and NIPSCO will provide transmission and generation infrastructure able to serve existing customers and Microsoft’s data center.
Microsoft broke ground on its data center in La Porte, Indiana, in June 2026, two years after it announced a US$ 1 billion investment in the facility. While it hasn’t publicly disclosed how much capacity the data center campus will house, GenCo’s plan to add more than a gigawatt to its pool, partly to serve the campus, points to a sizable facility.
Earlier today w.media reported that Microsoft had withdrawn from the largest AI data center project in the UK over concerns about energy supply problems that would delay the project’s connection to the grid. While Nscale, a British vertically integrated, full-stack AI infrastructure and neocloud company, remains committed to the project the departure of the its anchor customer is a major setback.