NiSource Signs 20-Year Power Supply Agreement with Microsoft

en.Wedoany.com Reported - On October 16, U.S. energy company NiSource announced that it has signed a 20-year long-term power supply agreement with Microsoft to provide electricity services to Microsoft's data center campus in northwestern Indiana, with power supply expected to begin in 2028. Under the agreement, GenCo, a power generation subsidiary of NiSource, plans to add approximately 1,100 megawatts of generation resources to its shared power resource portfolio, with Microsoft bearing the full cost of the generation and transmission infrastructure required to meet the campus's electricity demand.

NIPSCO, NiSource's Northern Indiana Public Service Company subsidiary, and GenCo will jointly provide the relevant generation and transmission facilities. The new power resources will be owned by GenCo and used to serve Microsoft's data center and other electricity customers. The related facilities will also be used to upgrade NIPSCO's existing transmission system. Under the cost arrangement determined by both parties, large electricity customers bear the infrastructure costs corresponding to their own added load, and existing residential and commercial/industrial customers will not bear the costs of new power supply facilities for the data center.

NiSource expects that this agreement will increase the cumulative expected savings for NIPSCO's existing electricity customers over the term of all data center customer contracts from the previous $1.4 billion to approximately $1.75 billion, equivalent to savings of up to $140 per household per year.

In conjunction with the Microsoft power supply agreement, GenCo has signed a long-term capacity use agreement for a 600-megawatt, 2,400-megawatt-hour battery energy storage facility. The storage facility will be developed, constructed, owned, and operated by an entity under AGP Group and connected to the transmission network managed by the Midcontinent Independent System Operator (MISO). GenCo is responsible for providing the electricity needed to charge the storage facility and will obtain dispatch and related revenue rights for the facility's available capacity, discharged energy, and ancillary services.

According to U.S. Securities and Exchange Commission filings, the storage agreement's service term is expected to be approximately 20.5 years, with the first-phase facility planned to enter commercial operation by December 1, 2027. GenCo expects to pay approximately $2.2 billion in storage service fees over the term of the agreement. The agreement's effectiveness is conditional upon AGP Group completing the engineering, procurement, and construction contract and signing a grid connection agreement meeting the agreed conditions by January 31, 2027.