NiSource (NI) 2026年第三季度业绩电话会：400亿美元计划及10%-11%每股收益增长目标

核心要点

• NiSource公布2026年第三季度综合调整后每股收益为0.27美元，高于上年同期的0.19美元。今年迄今调整后每股收益达到1.49美元。
• 管理层将2026年调整后每股收益指引收窄至此前2.02-2.07美元区间的上半段，并首次引入2027年指引为2.22-2.30美元。
• 公司将计划延长至2033年，目标是以2027年预期为基准实现10%-11%的综合调整后每股收益复合年增长率，这得到了400亿美元七年资本计划的支持。
• 该资本计划包括用于基础公用事业业务的320亿美元以及用于支持数据中心客户的GenCo投资约80亿美元。
• 与微软签署的全新20年协议将GenCo的池化投资组合扩大了约1100兆瓦。已签署的数据中心协议预计将为NIPSCO电力公司的现有客户节省17.5亿美元的费用。
• NiSource预计GenCo在2030年将贡献每股0.32-0.40美元的收益，在2033年贡献0.52-0.68美元；而基础业务的目标是在2033年前实现6%-8%的年均调整后每股收益增长。

关键财务数据

业务与经营业绩

NiSource将本季度的强劲表现归因于严谨的成本管理以及客户对天然气和电力需求的上升。NIPSCO以及该公司在俄亥俄州、弗吉尼亚州和肯塔基州的天然气公用事业公司的用量和客户数量均实现同比增长。

由于风暴应对成本，运营与维护费用有所增加，管理层表示其他活动同比持平。第四季度的推动因素包括NIPSCO电力公司第二阶段费率、弗吉尼亚州新费率、已获批的追踪机制更新、Alphabet的负荷增长，以及超过4000万美元的成本优化举措进展。

GenCo目前已与三家大型科技客户签署了五份协议。其储备项目总计9吉瓦，包括约5吉瓦的已签约容量、2吉瓦的战略谈判容量以及2吉瓦的开发中机会。管理层表示，更广泛的机会集已超过9吉瓦，并计划在2027年提供有关潜在扩张的最新进展。

根据与微软签署的协议，供电服务将于2028年开始，期限为20年。GenCo的池化投资组合将新增约500兆瓦的燃气轮机和600兆瓦的电池储能。NiSource预计将在年底前向印第安纳州公用事业监管委员会提交特殊合同申请，并在2027年上半年寻求获得批准指令。

公司预计其已签署的协议将为NIPSCO电力公司的现有客户节省约17.5亿美元，高于上一季度的14亿美元。在完全达产时，管理层估计平均每个住宅客户每年可节省约140美元。在获得IURC批准的前提下，账单扣减最早可能于1月开始。

管理层指引

NiSource 400亿美元的资本计划预计将支持截至2033年9%-10%的综合投资增长。预计超过90%的计划投资将在12个月内进入初始回收期，从而减少监管滞后并支持现金流。

随着GenCo项目投入运营和客户需求攀升，管理层预计调整后每股收益将实现多年的双位数增长。GenCo的预估贡献将从2027年的每股0.05-0.09美元上升至2030年的0.32-0.40美元以及2033年的0.52-0.68美元。

该计划假定客户温和增长、融资假设保守且运维费用持平。NiSource预计从2027年至2031年，住宅客户的年均账单增幅将低于4%，比此前规划的预期低100个基点以上。

公司于8月发行了7.5亿美元的次级次级债券。管理层预计近期每年维持性股权融资为4亿至6亿美元，随着GenCo从资本投放转向产生现金，该金额将有所下降。黑石集团预计将资助NIPSCO和GenCo资本计划中19.9%的投资。

风险与关注事项

• 监管批准：GenCo收益实现的时间部分取决于客户合同的获批情况，包括在IURC待批的微软备案申请。
• 建设与客户需求释放时机：监管批准、项目执行、融资成本和客户负荷增长将决定业绩落于管理层长期预期区间的具体位置。
• 恶劣天气与系统韧性：8月11日的一场直线雷暴大风风速高达每小时110英里，在印第安纳州北部造成严重破坏。NiSource在参与IURC调查的同时，正在开展内部及独立审查。
• 潜在的韧性支出：管理层正在评估额外的电力系统加固投资，但这些投资机会尚未量化，也未包含在基础计划中。
• 发电需求：NIPSCO正通过其综合资源计划评估容量需求、MISO认证变更、联邦税收抵免资格，以及Schahfer煤电机组潜在的继续运营情况。
• 可负担性：印第安纳州和宾夕法尼亚州的监管讨论正在审查核准回报率、追踪机制、费率设定流程以及客户负担能力。

分析师问答亮点

管理层表示，在NiSource推进目前处于战略谈判和开发中机会阶段的额外4吉瓦项目之前，无需完成对GenCo的战略审查。研究GenCo能在9吉瓦储备之外扩展多大规模的评估仍在进行中，预计将于2027年公布研究结果。

在融资方面，管理层表示基础公用事业业务的现金生成能力和快速的资本回收应当能够支持其在极少需要股权融资的情况下实现增长。GenCo的合同还可以使现金流入与建设支出保持同步，支持了企业层面借贷和股权融资需求随着时间推移而下降的预期。

关于亚马逊发电日程的变化，管理层将一台联合循环燃气轮机的调整归因于投资组合优化而非项目延期。已披露的资金需求保持不变，价格仍与客户的负荷增长挂钩。

管理层还指出，约3.9吉瓦的已签约客户需求与4.9吉瓦的供应资源之间的差异反映了认证、失负荷要求以及其他投资组合平衡因素。

NiSource预计风暴应对审查将明确运营改进方案、系统加固投资需求以及在重大停电期间改善客户沟通的方法。审查结果将提交给印第安纳州委员会。

业绩电话会议完整文字记录

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完整财报电话会议逐字稿

管理层陈述

Operator

Hello, everyone. Thank you for joining us, and welcome to the Third Quarter 2026 NiSource Earnings Conference Call. [Operator Instructions]

I will now hand the conference over to Durgesh Chopra, VP of Investor Relations. Durgesh, please go ahead.

Durgesh Chopra

Thank you. Good morning, and welcome to NiSource's Third Quarter 2026 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 of NiSource Utilities, Melody Birmingham.

Today, we'll review NiSource's financial performance for the third quarter, share updates on operations, strategy and growth drivers and walk through our extended long-term plan. Following our prepared remarks, we'll open the call for your questions. 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 MDA sections of our periodic SEC filings.

Additionally, some statements made on this call relate to non-GAAP financial measures. Please refer to the supplemental slides, segment information and full financial schedules for information on the most directly comparable GAAP measures and a reconciliation of these measures.

With that, I'll turn the call over to Lloyd.

Lloyd Yates

Thank you, Durgesh, and good morning, everyone. I'll begin on Slide 3. At NiSource, our strategy remains grounded in delivering safe, reliable and affordable energy while creating long-term value for our customers, communities and shareholders. This quarter, we are extending our long-term plan through 2033, providing a 7-year view of the investment opportunity we see across our footprint and the growth it supports.

That plan rests on two complementary platforms: our base business, fixed regulated utilities situated across multiple states, delivering natural gas and electricity to 4 million customers. Our growing GenCo business adds differentiated growth, delivering power and capacity to large load customers supporting national security through data center operations. The complementary nature of these segments provide stability and diversification and a long runway of needed investment that has supported a consistent record of delivering on our commitments. With our recently announced Microsoft agreement, GenCo now serves 3 of the largest technology companies in the world and brings our signed agreements to an expected $1.75 billion in savings to existing NIPSCO Electric customers.

Turning to Slide 4. We continue to advance our regulatory priorities in support of the financial plan, while AI-enabled tools and Project Apollo are strengthening efficiency and productivity across the business. Today, we reported third quarter consolidated adjusted EPS of $0.27, bringing our year-to-date consolidated adjusted EPS to $1.49. This performance keeps us firmly on track to deliver on our full year growth commitment. As a result of our progress, we are narrowing our 2026 consolidated adjusted EPS guidance to the upper half of our previously stated range of $2.02 to $2.07. We are also initiating 2027 consolidated adjusted EPS guidance of $2.22 to $2.30 and expanding our growth commitments through 2033, supported by an increased consolidated adjusted EPS compound annual growth rate of 10% to 11%. Shawn will take you through our growth drivers, financing plan, the $40 billion capital plan and the associated financial commitments later in the call.

Moving to Slide 5. Safety remains our top priority and the foundation of how we serve our customers. This quarter tested our system, our people and our communities. On August 11, a derecho moved across Northern Indiana with wind speeds of up to 110 miles per hour, one of the most severe weather events in NIPSCO's history. Additional rounds of severe weather in the following days brought even more significant damage to our system. The weather pattern evolved rapidly, and while we were prepared for what was forecasted, the weather severely accelerated in the hours before the storm crossed into our [ system ].

We activated our [ instant command ] managed structure, suspended noncritical work and placed contractor resources on standby. Within 24 hours, more than 1,700 external personnel had joined the internal teams, including Columbia Gas employees, contractor partners and mutual assistance crews from across the region. By August 25, we had completed our broad restoration effort without injury, reflecting our ongoing focus on strengthening our safety culture, disciplined execution and consistent application of critical safety behaviors.

I want to thank our employees, [ mutual assistants ], distance partners and the local officials and first responders who worked alongside us. We have an improvement mindset and are focused on learning from this event. We are completing a full internal after-action review, which we expect to finish by late November, and we are hiring a third-party expert to conduct an independent review of our response over the next several months. Meanwhile, we are participating fully in the review by the IURC underway in Indiana. NIPSCO will learn from this event and act on the lessons learned as we look to build a stronger and more resilient system for our community.

Turning to Slide 6 and our regulatory agenda. I'll start with Ohio. Building on the tracker approvals we received this year, Columbia Gas of Ohio filed its first 3-year forward-looking rate case under the framework which took effect earlier this year through Senate Bill 103. This forward-looking structure reduces regulatory lag and better aligns recovery with the continued safety and modernization investments for our communities. Our Kentucky and Virginia rate cases remain on schedule and continue to progress constructively, with new rates in Virginia effective October 12, subject to refund, and decisions expected in both cases in the first half of 2027.

In September, NIPSCO received a fourth federal order requiring continued operation of the Schahfer coal units. We continue to comply, and we are pursuing recovery of compliance costs through the FERC-approved MISO tariff schedule, having submitted Section 205 filings for each [ quarter ] period. We're evaluating a potential extension of the unit's operations through our integrated resource plan. NIPSCO's IRP will also evaluate near-term capacity needs evolving MISO accreditation rules and changes in the federal tax credit eligibility.

Later this month, we held our second public stakeholder meeting focused on the 20-year low forecast, updated seasonal peak methodology, resource adequacy needs, existing unit assumptions and stakeholder portfolio concepts. Our financial plan contains a point of view on the necessary generation requirements to support expected load growth while maintaining flexibility as the IRP evaluates the appropriate resource mix and timing of those investments. We will continue to share further updates with you through our ongoing stakeholder process.

Affordability remains a key focus across our jurisdictions, and we continue to engage constructively with regulators and policymakers. In Pennsylvania, the commission's ratemaking working group is evaluating ROE methodologies, rate case processes and the [ D6 ] framework as part of the state's broader affordability dialogue. We are participating constructively, and our financial plan retains flexibility to navigate these processes while continuing to invest for our customers.

We are also engaged in Indiana through the IURC's broader affordability review, including proceedings on authorized returns and tracker mechanisms. We will remain actively engaged as those proceedings advance, focused on maintaining affordability while enabling investment necessary to serve Indiana's growing economy.

We are already seeing meaningful progress. The IURC's 2026 residential bill survey shows our electric customers' bills declining year-over-year, and our data center agreement are expected to deliver meaningful savings to NIPSCO Electric customers. Together, these reinforce our view that Indiana remains a great place to do business with significant investment potential. And more broadly, that economic development can be a driver of savings and support affordability solutions across our footprint.

Speaking of savings, our new partnership with Microsoft reflects our third GenCo customer and fifth agreement we've reached in just over 1 year. This also represents the latest agreement served through the pooled strategy we introduced in May. We're proud of the work we are doing to bring meaningful savings to our customers in Northern Indiana. We have bought ingenuity and commercial acumen to a problem many states and regions in this country have not been able to figure out. This has unlocked a truly unique win-win-win for existing retail customers and local communities. New customers advance the imperative for the U.S. to keep up with data center technology to protect our country and our shareholders.

Shown on Slide 7, our signed agreements are now expected to deliver approximately $1.75 billion in savings to existing NIPSCO Electric customers, up from $1.4 billion last quarter. At full ramp, that equates to approximately $140 per year for an average residential customer, and we expect bill credits to begin as early as January, pending IURC approval.

Our data center customers pay the costs associated with their load, while the use of the existing system lowers bills for our residential customers. Consistent with the objectives set up for GenCo, this partnership seeks to enable affordability for existing customers, support economic development in Northern Indiana, enhances shareholder value and is structured with prudent risk management.

I'll now turn the call over to Michael to walk through this agreement in more detail.

Michael Luhrs

Thanks, Lloyd. I'll begin on Slide 8. Under the agreement, Microsoft is taking electric service under a 20-year term starting in 2028. The GenCo-owned pooled portfolio will be increased by approximately 1,100 megawatts, including roughly 500 megawatts of combustion turbines and 600 megawatts of battery storage. We expect to file a special contract with the IURC by year-end and are seeking an order in the first half of 2027, consistent with the expedited 90- to 120-day review framework established for our data center agreements. Like our other GenCo agreements, it is structured to provide a return on and of our investment over the contract term, supported by minimum capacity charges, pass through treatment of variable costs and termination protections.

Slide 9 highlights the significant momentum we have built in just over a year. We begin with the GenCo declination order, and our initial customer agreement in September 2025 has grown to 5 agreements across 3 signed customers, supported by meaningful progress across contract approvals, regulatory filings, zoning, construction and initial energization.

That commitment is already translating to results. Following the signing of Alphabet in April, we've completed construction of transmission infrastructure ahead of schedule and begin billing this summer. Across these projects, we have been proactive in securing long-lead equipment, diversifying vendors and establishing EPC arrangements, including our partnership with Quanta and [ Zachary ] to reduce execution risk. Our teams remain focused on delivering these projects safely, on schedule and alongside our ongoing operations.

Construction continues on Amazon site, the largest infrastructure project in our company's history, including a 345 kV delivery substation and associated transmission infrastructure which is expected in service next year. As civil site work progresses and permitting and regulatory approvals advance, we remain on track for the expected energization and full ramp across our signed projects. Our progress to date demonstrates we are delivering on our signed agreements, advancing approximately 5 gigawatts of capacity. And as Slide 10 highlights, we are targeting up to 4 gigawatts of potential additional load, which our model is well positioned to facilitate.

Demand from large load customers remains robust. Customers are choosing Northern Indiana and GenCo because we can offer credible speed to power, transmission access, land, water, fiber, skilled labor and a supportive business and regulatory framework built for both speed and customer protection. We continue to see market dynamics that could expand opportunities beyond our 9-gigawatt pipeline, and we will share updates to reflect those opportunities in the future as we evaluate execution pathways to integrate that growth.

With that, I will turn the call over to Shawn.

Shawn Anderson

Thank you, Michael, and good morning, everyone. I'll begin on Slides 11 and 12. Third quarter consolidated adjusted EPS was $0.27 compared with $0.19 in the same period last year, bringing our year-to-date consolidated adjusted EPS to $1.49. Our strong financial quarter was driven by disciplined cost management and continued outperformance of customer demand for natural gas and electricity across our operating companies.

Usage and customer counts were up year-over-year at NIPSCO, Columbia Gas of Ohio, Virginia and Kentucky, all creating tailwinds for our financial results. We reached a significant agreement on property tax savings in Ohio, which will pass through lower property tax rates over time. O&M was higher year-over-year due to the costs associated with responding to storm activity. Otherwise, all other activities were flat year-over-year. These drivers give us confidence as we step into the fourth quarter.

We expect earnings to deliver the upper half of our guidance range. And many of the principal drivers are already in place, including step 2 rates at NIPSCO Electric, our Virginia rate case, approved tracker updates, the ramp of Alphabet load and continued progress on more than $40 million of cost optimization initiatives we identified earlier this year.

Turning to Slide 13. We are excited to extend our capital plan through 2033. Our new 7-year plan totals $40 billion, including $32 billion of base plan investments and approximately $8 billion of GenCo investments to support data center customers. The extended plan reflects the depth of investment required to support a safe and reliable system, gas system modernization and safety programs, electric reliability and resiliency, generation to meet our customers' capacity needs and infrastructure to support economic growth across our territories.

The plan remains diversified across our gas and electric businesses throughout 6 states and in our growing business segment, GenCo. Our new plan improves our cash efficiency by converting over 90% of our investments into initial recovery within 12 months of investment. This disciplined approach to investment supports consolidated investment growth of 9% to 10% while delivering adjusted earnings per share returns of 10% to 11% through 2033. We also continue to see upside investment opportunity of $3 billion for our base business and up to 4 gigawatts of pipeline in GenCo which are not included in our guidance, and we will move into the base plan when projects meet our threshold.

Turning to Slide 14. We are narrowing our 2026 consolidated adjusted EPS guidance to the upper half of our stated range. Today, we initiated our 2027 adjusted EPS guidance at $2.22 to $2.30 per share, which implies a double-digit year-over-year growth next year at each midpoint, including $0.05 to $0.09 of contribution from our GenCo business segment. The 2027 guidance becomes the new foundation for our long-term earnings potential, which we expect to grow 10% to 11% on a compounded annual growth rate basis off of our expectations for 2027 through 2033.

Additionally, we expect multiple years of double-digit growth through the planning horizon as the GenCo segment strengthens from development to serving its customers. We are also extending our base plan to achieve 6% to 8% annual EPS growth through 2033. We see continued stability in our core business operations, which have benefited from diversification and demand for natural gas and electricity throughout the regions we serve.

As we move toward year-end reporting, GenCo will be disclosed as a separate segment. Consistent with our current reporting, we will provide operating income for the segment. To further support transparency and for your modeling efforts, we are also providing indicative GenCo EPS contribution targets for the present year, in 2027, 2030 and in 2033.

We believe our plan remains highly executable and incorporates modest customer growth, conservative financing assumptions and a continued commitment to flat O&M. We worked hard to focus on ways to drive customer bill impacts down. Our new plan has decreased our view on bill increases by over 100 basis points down to less than 4% average annual residential customer bill increases from 2027 through 2031 on the investment base of 9% to 10%. Finally, we continue our commitment to a strong balance sheet by maintaining FFO to debt of 14% to 16% in all years of our plan. We expect our balance sheet strength to grow over time as GenCo transitions from capital deployment to meaningful cash generation over the plan horizon.

Moving to Slide 15. We think it's important to view this opportunity through a longer-term lens. Our base business remains a strong foundation of the plan, expected to deliver durable 6% to 8% annual base plan adjusted EPS growth. GenCo builds on top of that foundation, contributing an incremental layer of earnings growth as these investments are placed into service and customers ramp to full demand.

Today, we are increasing GenCo's expected EPS contribution, reflecting continued efficiencies in our existing Amazon and Alphabet agreements, along with the addition of Microsoft. As a result, we now expect GenCo to contribute $0.32 to $0.40 in 2030 and growing to $0.52 to $0.68 by 2033. Together, our businesses support our consolidated 10% to 11% adjusted EPS CAGR guidance through 2033 and demonstrates the compounding value of executing across both the base plan and GenCo over the full planning horizon. Factors such as the timing of regulatory approvals, construction, financing costs and the pace of customer load ramps will determine where we land within that range. Our pipeline of strategic negotiations and developing opportunities provides the opportunity to exceed the top end.

Slide 16 details our financing plan. In August, we issued $750 million of junior subordinated notes, further strengthening our balance sheet and supporting the capital plan. Looking forward, we expect to issue $400 million to $600 million of maintenance equity annually in the near term, with those needs stepping down as we move through the plan to minimal levels starting in 2032 as the business increasingly self-funds its growth.

We maintain flexibility to fund the plan efficiently through a balanced mix of debt, hybrid securities and maintenance equity while preserving our investment-grade credit profile and supporting our 14% to 16% FFO to debt commitment. We will also be opportunistic, [ evolving ] all aspects of capital markets to fund our growth strategies. What will guide our decision is maximizing long-term value for our shareholders while retaining the strategic flexibility to capture customer, community and shareholder benefits.

And lastly, Slide 17. This quarter, we extended our plan to a 7-year view, narrowed our 2026 consolidated adjusted EPS outlook to the upper half of our range, initiated 2027 consolidated adjusted EPS guidance and executed our fifth GenCo agreement by adding a third GenCo customer, which increased customer savings to $1.75 billion. At the same time, we responded to one of the most severe storms in NIPSCO's history and are applying what we learned to strengthen our system.

Taken together, these milestones demonstrate the resiliency and the ingenuity of our teams, making progress across all fronts of our business and positioning for sustained growth and customer value over the long term. We remain confident in our ability to deliver on our commitments. Regulatory execution provides visibility into earnings and cash flow. Our capital plan is diversified across businesses and jurisdictions. Our operational initiatives continue to support productivity and cost discipline, and GenCo contracts deliver stable fixed charges for our services while adding a meaningful layer of growth and lower bills by approximately $140 per year at full ramp for existing electric customers.

NiSource offers investors a diversified regulated utility with the opportunity to invest in programmatic gas infrastructure and long-term energy infrastructure for a fully integrated electric business. The investment thesis extends to access the unprecedented energy development and power demand this country requires to support new data center operations and robust economic development. The complementary nature of these business segments offers a value proposition differentiated in the marketplace today. And finally, we continue to build upon our track record of execution and delivering on the commitments we make.

Operator, please open the line for questions.

Operator

[Operator Instructions] Your first question comes from the line of Shar Pourreza with Wells Fargo.

分析师问答

Shahriar Pourreza

Just firstly, the disclosures around Microsoft are a meaningful addition to the quarter, right? So can you just maybe comment on the size of the site and how we should think about the longer-term opportunity with Microsoft from here? So does the agreement announced today, does that largely capture the opportunity you see with them? Or should we view this as potentially the first phase of something larger?

Lloyd Yates

I mean, what I'll say to you, Shar, is we can't comment on any of our customer sites or the size of those sites. What I can tell you though, is we're actively engaged with all 3 of our major customers and the customers that we have in the queue. And we have a lot of demand in that queue with those customers, and we're really confident in our ability to execute on the pipeline that we have.

Shahriar Pourreza

Okay. Got it. And then just -- obviously, there's been a lot of progress on the GenCo starting to accrete value. I guess, as we move through the remaining proceedings in Indiana, I guess, how are you thinking about the key regulatory risks from here? Has anything changed in terms of the risk profile as we move further through the process?

Lloyd Yates

We're still optimistic and confident in Indiana. We think it's a great place to do business. It presents a significant long-term growth opportunity for NiSource. If you think about the GenCo and economic development -- economic development and affordability are among the administration's top priorities, and GenCo checks all of those boxes.

So we're in Indiana. We are actively engaged with all the stakeholders. Our goal is to enhance our value proposition to our customers, our large load customers and our shareholders.

Operator

Your next question comes from the line of Julien Dumoulin-Smith with Jefferies.

Julien Dumoulin-Smith

Just wanted to follow up. I'll take another crack at this, if I can. Without identifying customers' internal plans, right, I think important caveat, is the current infrastructure and resource plan being designed to preserve the ability to serve additional Microsoft load? How do you think about the physical requirements, whether that's generation or transmission, to [ upside ] from here? I'm just trying to zero in on the initial [ 788 ] and what the underlying generation plan that underpins it could be and/or if you're going to plan ahead a little bit, if you will, on generation. And then maybe a subquestion on that would be, you have an initial toll on the battery. How do you think about ownership on that front over time as well?

Michael Luhrs

So what I would say is that's sort of back up to more of the global perspective first, which is Indiana is a positive area of the country by which to facilitate both the generation growth and the serving of data center customers, as mentioned in the forward of it, like relative to land, fiber, et cetera. When we plan our assets, we plan our assets for the ability to -- from that full portfolio, serve the totality of our customers within it. We don't overbuild on that or overextend on that. But at the same time, we do plan for the potentials, the risk. It's one of the ways we're able to mitigate overall challenges with the portfolio and make sure that we meet our commitments in serving our customers.

What I would say is you've seen us grow with Amazon, and you've seen us sign two additional agreements with Amazon which have both accelerated and incremented that capacity. We are focused on being able to continue to grow with our existing customer base. And with those high creditworthy counterparties, good, strong counterparties, we will continue to add them to the portfolio as we go forward. So overall, we feel like we're in a really good position. We feel we have the capability both from transmission and what we're looking at with generation capability to be able to both grow with our existing customers and expand our pipeline.

As for the tolling agreement -- go ahead and hit that -- we look at the tolling agreement, we use a variety of mechanisms to balance everything across the portfolio, both from all the financial parameters, what we want to do overall with our long-term strategy. So as we have done with batteries, some of them we own, some only toll. Some, we have -- we continue to do these arrangements. We're not opposed to owning. But at the same time, as we continue to grow this portfolio, we're going to try to make sure we take a balanced perspective that allows us to be able to step in the opportunities at the right time and also be able to adapt to technology changes as we go forward.

Julien Dumoulin-Smith

Yes, absolutely. And then if you can just elaborate a little bit further as you think about the funding plan a little bit. It seems like the additional incremental payments here being made, whether it's Microsoft or otherwise, on the GenCo is what's driving the additional [ CFO ] when is the 55% to 60% to fund the plan, the level of incremental cash in the near term?

Shawn Anderson

Yes. You're starting from a load position on customer ramp rate, which strengthens through the period of the plan. If you recall, we'll have customers fully ramped in 2030, 2031, 2032, which is strengthening cash from operations on the GenCo segment. Additionally, the base business continues to produce strong cash flows. As a reminder, the starting point of 16.1 at the end of 2025 on an FFO to debt basis just demonstrates the strong cash flows and capitalization of the base business was beginning at, and that just maintains itself through the plan horizon.

Operator

Your next question comes from the line of Nicholas Campanella with Barclays.

Nicholas Campanella

Just wanted to ask like the -- you used to talk about doing the strategic review of GenCo just in terms of being able to execute beyond the 9 gigawatts. And can you give an update on how that's going? And just -- you've made pretty steady progress here. Does that review need to happen before you execute on the remaining 4 gigs? Or could we see that a little sooner? And then I'll ask a follow-up.

Lloyd Yates

So I'll answer the second question first. That review does not need to happen before we execute on the next 4 gigawatts. We show in the chart, the slides you have, we have 2 gigawatts now in strategic negotiations and then 2 more behind that. We are in the midst of studying to upsize that. We know we have the ability to upsize those, the size of the GenCo. I mean, you will roll that out sometime in 2027. That study is ongoing, and we're optimistic, and you'll see that sometime next year.

Nicholas Campanella

That's great. That's great. And then in your prepared remarks, Lloyd, on the Indiana storms, we have seen some legislative hearings. There's been some discussions about the need to kind of increase resiliency, reliability. I'm just wondering how that informs your capital plan if there can be kind of a wider resiliency package put forward to the state and when and what that would look like?

Lloyd Yates

So we are actively and we will actively participate in the IURC hearings. We understand that long outages are not good for our customers and an investment to make to harden the system to make it a lot more resilient. We're in the midst of studying that. As we go through this process, we want to make it clear what kind of capital investment that, that takes, and we'll roll that out to the regulators and legislators as necessary. But I think that is ongoing. And I think you'll have an understanding of what the investment opportunity looks like in the near future.

Operator

Your next question comes from the line of Ross Fowler with Bank of America.

Ross Fowler

Just a real quick one first. I think if I've got it right, Amazon CCGT is shifting out to 2030. Kind of what drove that? How do you serve Amazon kind of in the meantime before that enters service? And sort of, does any -- who bears the incremental cost of that as we shift this out?

Lloyd Yates

Michael?

Michael Luhrs

So what I would say on that is, first of all, there's 2 CCGTs, they're not both shifting out to 2030. One has changed with what we're doing. But remember, we signed incremental agreements, acceleration agreements. We have batteries that are coming online ahead of that. We have a pooled portfolio.

So this fits into the whole capability of really making sure that we're optimizing the assets to be able to serve the customers in the most beneficial and cost accretive way, and quite frankly, derisking the construction and making sure that, that construction is done in a way that has the highest probability of execution. The moves we made with the CCGTs do that for Amazon. They help to ensure higher confidence of execution and modifying those in a way.

But it's not a delay in schedule, it's actually an optimization. And in fact, some of them are actually, I would say, are accelerated with it that helped produce for that acceleration that we're doing. So when you look at it overall, think about it in what we're doing in the totality, not on an individual asset.

Shawn Anderson

And just to add real quick, Ross, I would note that the capital requirements were not changed in our disclosure. So there's no change necessarily. As Michael indicated, it's really streamlining the construction process for best execution. And the pricing signals still are set off of the ramp rate for the customer.

Ross Fowler

Yes. And then maybe following on Julien's question a little bit on the cash flow flywheel. It looks like if I sort of look at your funding slide and I look at the percentages against the old capital plan, the new capital plan, right? And I know this is all backward dated, but if I just quickly annualize it in my head, CapEx [indiscernible] has been changing on a sort of annualized basis. But I think the important point maybe is that funding has. I mean, debt seems like it's on average, $600 million less annually. Equity is about $100 million lower.

And I know that cash is going to be front-end loaded, right? So -- but as I think about the go-forward plan, Shawn, as you add more to GenCo, there's got to be capacity to just increase the backward dated edge of that CapEx in the plan as you go forward. The more GenCo should just be more -- not only GenCo CapEx, but ability to fund regulated CapEx with the same balance sheet and sort of maybe even lower funding requirements, which was kind of a perfect trifecta of how to do this. Am I thinking about that correctly?

Shawn Anderson

Yes. Yes, you absolutely are. I mean, again, you start from about a position of 16.1 at the end of 2025 with minimal capital expenditures associated with GenCo. That really is producing the intrinsic cash flow power of the base business, which is obviously above our guided range.

So that business and the strength and the financial profile of the base business, we believe, has not changed. It's very consistent through the plan horizon. Therefore, it has the ability to operate with minimal to no equity as it grows throughout its rate base deployment, strengthened by that 90% recovery inside 12 months. That helps intrinsically stabilize the operating cash flow and minimize the use of equity for the base business.

Meanwhile, one of the strengths of the GenCo model is the ability to shape the cash flow design through its rate structure in a manner which also balances financing requirements. That flexibility helps reduce the equivalent of regulatory lag and allows for optimization and balance of cash inflow with cash outflow based on the construction cycle and what's necessary to meet the customer needs. Again, also additionally achieving a greater than regulated rate of return enables that EPS to keep up with the rate of spend on the equivalent investment, and that's producing FFO. So again, self-sustaining itself from a funding mix point.

And then finally, to Michael's point he just made, having the flexibility to procure the most efficient capacity attribute available while earning an appropriate risk-adjusted return provides that flexibility to best serve customers, that's going to matter based on the incremental, in this case, 4 gigawatts that Lloyd just alluded to and what technology solution will be necessary for us to serve those customers.

Ross Fowler

Yes. Raising CapEx and lowering equity, it's a good thing to do. Thanks.

Operator

Our next question comes from the line of Eli Jossen with JPMorgan.

Elias Jossen

Maybe just starting with the customer savings. How should we think about the regulatory positioning and playbook in Indiana? Obviously, you have to think about this post-election. Can you just kind of frame how we should think about your strategy going forward, particularly with the savings in mind?

Lloyd Yates

Well, again, as I mentioned earlier, one of the largest benefits of the GenCo is it addresses the affordability issue. With this last signing of Microsoft, we start to roll back $1.7 billion to our customers. And it will grow as the GenCo grows. That customer credit should show up in the customer's bill, I think it will call my data center credit, pending IURC approval sometime either at the end of this fourth quarter or sometime early next year, and the customers will see that number ramp up as the customers ramp up.

Unknown Executive

And just to add to that real quick, we really wanted GenCo and we feel like those proof points exist to demonstrate for both our communities and our stakeholders, the value it can provide in growing the communities, as Lloyd said, providing $1.75 billion back to customers. But also remember, this is isolated. Like what we're doing for the electric utility, it is isolated from the rate base. So they do not bear that risk with us building these assets. So we feel like it's been a very positive evolution and it's proven out now and that we're able to demonstrate that with all the stakeholders and carry that messaging through, which is beneficial to our activities in Indiana.

Operator

Your next question comes on the line of Steve Fleishman with Wolfe Research.

Steven Fleishman

So just looking at Slide 27 on the -- it looks like you added 2 new combustion turbines in there. And the $2.3 billion cost relative to the, I guess, 408 megawatts seems like a pretty high number. Could you maybe just talk about what -- is that more than just the generation? Is there other structural equipment transmission, other things in there?

Lloyd Yates

All the transmission and infrastructure is also in that cost, Steve. So it's not just the 2 [ frame CTs ], but all the transmission and infrastructure, and well, some equipment associated with that transaction.

Steven Fleishman

Okay. Is there a way to get the number just for the generation?

Lloyd Yates

No.

Steven Fleishman

Okay.

Lloyd Yates

We haven't disclosed that.

Steven Fleishman

Yes. Second question, just the GenCo CapEx is very -- I mean, it looks like the vast majority of the CapEx is pretty much the first 2 years. And is that kind of -- I mean, it fits the model of what you talked about, Shawn. And just -- does that any kind of front ending though, of what you had done before? Or is it consistent?

Shawn Anderson

There's no material change in the previous executed. There's a few things that will move year-by-year, and certainly, it will give us some tailwinds into the plan should we deploy CapEx a little later, there'll be less financing cost. Things like that could move us around within the range, but nothing material is different than what we were previously planning to execute.

Steven Fleishman

Okay. And then lastly, just on the base business. Just any kind of high-level messaging on where you're spending the capital, both states, and in terms of like what main areas? And you've taken that out to 33 now already. Just like how long term do you think that base CapEx planning to be?

Shawn Anderson

Well, it's fairly long dated. As we've discussed a lot, 60,000 miles of pipeline with an annual replacement rate of, call it, 400 annually. So there's a lot of pipeline to maintain. We're starting to enter into the first generation plastic replacement program. That's our largest vintage of pipeline.

So there'll be a lot of pipeline modernization as a staple of our plan. Additionally, in this particular moment, we have a fair amount of PHMSA compliance CapEx that we'll be executing in Ohio and likely longer term in Indiana on those gas systems. Both will require that maintenance by the middle of the next decade to maintain compliance with rules and regulations there.

We still maintain a generation short position. It's moved a little bit further into the early part of next decade, maybe the latter part of this decade. That's moved some CapEx a little bit further out, but it's unchanged in a 5-year horizon, which simply means that investment still needs to be made. It just matters when we make it per the IRP. But the total CapEx needs for this business, both the gas and electric side will be long-dated.

Lloyd Yates

And still -- and just to add to Shawn's point, there's still a possibility of some on the electric side of the business, some storm hardening and resiliency investment that we haven't quantified yet. And we believe we have a long tail of investment in the base business, and it's really strong.

Operator

Your next question comes from the line of Gabe Moreen with Mizuho.

Gabriel Moreen

Can I ask about the $0.40 to $0.60 ultimately coming from GenCo? Can you just talk about the drivers behind that range, whether it's capital spend, customer demand? And then, I guess, it's a little presumptuous to ask, but expectations for what happens thereafter, does it just stay in that range based on the existing 3 contracts?

Shawn Anderson

Yes. Just 1 quick add, Gabe. The $0.40 to $0.60 moved to $0.52 to $0.68. So the new range for 2033 is $0.52 to $0.68. That's indicative of the full ramp rate for all customers that we serve at GenCo. That would be the first year of full ramp rate. The predominant driver for that then is the revenue collected off of the capacity fees for each of the customers. That is a period of time when we still have a fair amount of financing costs that we're absorbing as we will still be paying down some of the construction and development costs.

I would expect the earnings per share contribution to get even more efficient or grow as you pay down that borrowing cost. So I would expect a step change as you get closer to the middle of next decade outside our plan horizon, all else equal.

Gabriel Moreen

And then maybe if I could stay on kind of financing assumptions and laying out a 7-year look for the base plan in GenCo. Can you talk about, I guess, what your assumptions are behind rates, maybe O&M? Have those changed since the last update, given, I guess, the forward curve on interest rates? And were there any offsets?

Shawn Anderson

Yes. We've never really projected in our plan, material rate cuts in any respect. So while we prefer lower rates, that's better for our customers. And certainly, given the financing need that we have, it's better for the efficiency of our plan.

We're not surprised by the environment we're in, and our plan did not need to modify as a result of the dislocation we've seen over the last, call it, 2 months. We also have some opportunity across the curve to select different tenor and to be opportunistic both on the debt and the equity side. So we'll manage through this. We've got a really great treasury who can be adaptable, but we'll wait for the environment to be right for us to lock in long-term commitments that can be accretive to our plan.

Operator

Your next question comes from the line of Nick Amicucci with Evercore.

Nicholas Amicucci

I think you may have touched upon it. I try and reconcile the Slide 27, just the $9.9 billion versus the $8 billion within the plan for GenCo. Just trying to frame that up and kind of rectify that?

Shawn Anderson

Yes. That's a quick one. The only difference is the time horizon. Pre-existing 2025 and 2026 investment would be included in the $10 billion. The $8 billion is really referencing the '27 through '33 period.

Nicholas Amicucci

Got it. All right. That makes sense. And then...

Shawn Anderson

Sorry, '27 through '31 period.

Nicholas Amicucci

Got it. Okay. And then -- staying on that, just on that slide. If we're talking -- just if we could reconcile too, just the 3.9 gigawatts of signed customer demand with the 4.9 of supply resources. Is that -- does that kind of consider the accreditation that's being given to the batteries and stuff? Or is there something else in that?

Unknown Executive

No, you got it. I mean, when we look at a difference between what we talked about of generation capacity and load accounts for all the factors related to accreditation of the different generation types, loss of load, all those different factors that are required, balance of plan, et cetera.

Operator

Your next question comes from the line of Sophie Karp with KeyBanc.

Sophie Karp

First, on the 9 gigawatts, so I guess just maybe a housekeeping question. You guys had 9 gigawatts of pipeline before you announced recent deal that's still 9 gigawatts. Was this 9 gigawatts like backfilled? Or how should we think about this?

Lloyd Yates

Michael?

Michael Luhrs

Yes. When you look at the 9 gigawatts right now, the 5 gigawatts is a signed capacity. The 2 gigawatts we've mentioned are in strategic negotiations now. And then we've got 2 in developing opportunities. And as Lloyd mentioned, we continue to, as we assess additional opportunities and expansions, we would bring that back in '27.

Lloyd Yates

Yes. I think another point there is the pipeline is much larger than 9 gigawatts. So we have a robust pipeline. Our study in -- just trying to figure out how much more than 9 we can accommodate and over what time period.

Sophie Karp

Okay. Okay. Got it. And then on the self-initiated, I guess, study of the storm response, I'm just curious, what you guys expect to learn? And how do you think those learnings will interact with the ICC proceedings?

Lloyd Yates

I'm sorry, repeat that question?

Sophie Karp

The study that you initiated on the storm response, the self study, what do you expect to learn from that? And how would you apply that, I guess, in conjunction with the commission investigation as well?

Lloyd Yates

Well, we're going to submit that study to the commission. And we expect to learn a number of things: a, how we can do better; b, what investments we need to harden the system. So it should help improve our process. It should give us a window of prudent investment opportunity to harden the system. And I think a big one here is how we can improve our communication to our customers in the midst of significant storms.

Operator

Your next question comes from the line of Trazia Miller with Morningstar.

Travis Miller

I haven't changed my name, so it's still Travis. The financing plan, does that also include a pro rata contribution from Blackstone? I see the little sliver in the pie chart, but just wanted to confirm Blackstone maintenance?

Shawn Anderson

That's exactly right. It would be 19.9% of investments across the NIPSCO and GenCo capital plans.

Travis Miller

Okay. And they're comfortable as you guys had data centers, obviously, they would have to contribute more capital. So they're involved?

Shawn Anderson

Not to speak directly for them, but I think they're extremely comfortable.

Travis Miller

Okay. Okay. And then higher level. At the gas business, obviously, tons of affordability, politics, discussion, regulatory discussion in the areas you serve. What's your stance? So where do you sit in that discussion? Are you kind of playing on the sidelines? Are you involved along with the electrics? What's your take kind of on the affordability, especially as it's become so politicized in those other states?

Lloyd Yates

Melody, do you want to handle that one?

Melody Birmingham

Certainly. No, we aren't sitting on the sidelines. We are actively engaged in the discussion around customer affordability and the impact we have on the customer's wallet as we recognize how important the affordability is for our customers. And so we continue to look for ways to manage bill impacts. We are working with our partners in the business to look at how and when we deploy capital.

And then we are also working with our external stakeholders just to make sure they understand the investments that we're making and being transparent and quantifying those investments that we need to make. So we are actively engaged, and we understand the importance affordability has to our customers as well as to our regulators as it has to us.

Operator

Our last question comes from the line of Steve D'Ambrisi with RBC Capital Markets. Steve, your line is now open.

Stephen D’Ambrisi

A quick one. On Slide 15, just -- if I eyeball the GenCo adjusted EPS growth kind of from '32 to '33, it looks like it's a pretty decent step up, maybe like $0.15 ish, which seems like a steeper climb than kind of the update on 2Q. And so can you just talk -- maybe talk about it a little bit with the financing flowback or benefits beyond '33? But can you just talk about how this is being financed, if there's amortizing debt? Or just why once all of these projects are largely ramped in '32, there's still continued significant step-ups into '33 and beyond?

Shawn Anderson

Yes, appreciate it. I'd caution against getting too precise on the bar charts just in a sense that we've not put adequate disclosure out for 2032's guidance. And so I'd just would caution against getting too precise with that. But the fundamentals that are going to drive the earnings contribution are going to be what you just mentioned, the financing cost and more importantly, the customer ramp rate.

What's happening in our dynamic, we have customers fully ramping in 2030, 2031 and in 2032. So the combination of those 3 customer ramp rates at those points in time are going to strengthen the capacity revenue that we're collecting from GenCo or through those -- from our customers. So that's what you're starting to see stabilize.

To your point about financing, we started to finance things in '25 and '26. We don't have amortizing debt. We've done everything at the enterprise level with investment-grade bonds and equity. But inherently, the need for new debt is declining at the NiSource enterprise because that cash is becoming more optimized across all of our systems. The strength of that cash flow coming off of fully ramped customers is helping us reduce borrowing in any case.

And as we go closer to a different financing strategy, if we need one, we'd still be able to optimize the use of that cash at the enterprise level. So the base case is investment-grade bonds and equity creating more efficiency in all of the net financing as we get out of this decade, and then we'll look for other ways to optimize on a risk-adjusted basis or a strategic basis for our shareholders.

Operator

There are no further questions at this time. I will now turn the call back to Lloyd Yates, CEO, for closing remarks.

Lloyd Yates

So let me thank you for your questions, your interest and your investment in NiSource and look forward to seeing a lot of you at the EEI Financial Conference in a couple of weeks. Have a great day.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.