Ladies and gentlemen, thank you for standing by. Hello, my name is Dustin, and I will be your conference operator today. At this time, I would like to welcome you to the third quarter of NISOR's conference call. All lines have been placed on mute to prevent background noise. After the speaker's remarks, there will be a question and answer session. So if you'd like to ask a question at that time, please press star and the number one on your telephone keypad. If you would like to withdraw your question or your question has been answered, please press star 1 again. Thank you. I would now like to turn the conference over to Durgis Chopra, Vice President of Investor Relations. Please go ahead, sir.

All right. Thanks, Dustin. Good morning and welcome to NICEHORS' third 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 Lewis, and Executive Vice President and Group President of NYSource Utilities, Melody Birmingham. Today we'll review NYSource's financial performance for the third quarter and share updates on operations strategy and code drivers we'll open the call for your questions after our 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 MDA 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. With that, I'll turn the call over to Lloyd.

Thank you, DeGrasse, and good morning, everyone. Let's begin on slide three. At NYSource, our mission remains clear and consistent. Deliver safe, reliable energy that drives value to our customers. The NYSource team has been focused on executing our premier business plan. We have advanced the work to develop data centers in Indiana, and we've refreshed the long-term outlook for our business. As a result of this, we've strengthened our financial commitments, demonstrated a disciplined and well-defined base business plan, and have capitalized on emerging data center opportunities. Through approximately $7 billion of Genco investments, generating approximately $1 billion in savings to be flowed back to our existing customers, this business model serves as a scalable platform for growth. These commitments are backed by our efficient capital deployment and safe and reliable operations within our robust regulatory framework. The refresh of our strategic plan outlook enables updated financial guidance while reaffirming our confidence in delivering sustainable value and extends the company's growth targets. This supports a 6% to 8% annual adjusted EPS growth rate in the base business through 2030. We are now introducing an 8% to 9% adjusted EPS compound annual growth rate for the consolidated business through 2033. This transparent approach drives predictability and aligns our financial plan with long-term stakeholder value. Turning to our key priorities on slide four, this quarter, we secured approval of the Genco model in Indiana and full ownership of the Templeton Wynn Asset, reinforcing the strength of our constructive regulatory foundation. Our ongoing focus to refine our operations through AI efficiency and continuous improvement initiatives supports our steadfast commitment to customer affordability, ensuring that our investments and operational decisions are made to support our goal of keeping energy costs reasonable and predictable for the communities we serve. Today, we reported third quarter adjusted EPS of 19 cents, bringing our year-to-date total to $1.38. We are reaffirming the upper half of our 2025 adjusted EPS guidance of $1.85 to $1.89. We're also announcing 2026 consolidated EPS guidance of $2.02 to $2.07. Despite these strong financial commitments, significant upside remains as we continue to invest in regulated infrastructure to better serve our communities. Developing projects supporting data center growth, ensuring of manufacturing, and economic development across our territories remains robust across the outlook of our plan. Some of that robust pipeline has been realized through the recently executed contract with a large investment-grade data center customer. Let's move to slide five. our ai and digital strategy is measurably driving efficiency scalability and better experiences for employees and customers our ai work management intelligence continues to deliver sustained field productivity uplifts of over 20 percent as measured through work hours achieved less idle time and less rework building on this success we are expanding ai into additional high value areas including a new supply chain program to reinforce our focus on customer affordability. We're also piloting AI for system reliability and faster storm response, including average prediction and resource staging. Across the enterprise, we're employing AI through secure role-based tools and strong governance. These initiatives are outcome-driven, along with our regulatory commitments, and designed to capture sustainable O&M efficiencies while improving service quality. We're making deliberate investments in the people and capabilities required to meet the growing needs of our data center customers. Our ability to execute large-scale construction projects stems from a proven track record of project management, deep technical experience, and a culture of accountability. These efforts align directly with our commitment to operational excellence, ensuring we're not only prepared to deliver, but positioned to lead this next phase of growth. On slide six, we continue to make strong progress on our regulatory agenda. We're advancing our tracker programs in Ohio and Indiana, and our Pennsylvania rate case remains on track with a final order expected by year end. We're also advancing initiatives that promote economic development. These efforts expand the customer base, which leads to more efficient distribution of fixed costs. Columbia Gas and Virginia's partnership in delivering natural gas to Eli Lilly and Company's newly announced $5 billion manufacturing facility near Richmond exemplifies a proactive approach to economic transition and infrastructure development. This state-of-the-art facility is projected to create 650 permanent jobs and 1,800 construction jobs, showcasing how strategic investments can drive both immediate and long-term economic benefits for local communities. Columbia Gas of Virginia's collaboration with state and local agencies underscores the commitment to attracting high-impact investments and building foundational energy infrastructure that supports ongoing economic growth. In parallel with these economic initiatives, NYSOS remains focused on its energy transition strategy by advancing coal plant retirements, including Schaefer at the end of 2025 and Michigan City in 2028. The company continues to closely monitor executive orders and regulatory developments and is working with federal and state officials and MISO to ensure these transitions are managed responsibly. The goal is to provide the best outcomes for customers and communities, ensuring reliability and affordability. These efforts, together with investments in new facilities and infrastructure, reinforces MISO's commitment to supporting both community prosperity and a sustainable energy future. The IURC's approval of GENCO unlocks a unique business model designed to protect existing customers, serve new customers with speed and flexibility, and maintain the financial integrity of NIPSCO. The GENCO strategy goes beyond simply providing power. It establishes a framework that strengthens our system, supports local communities, and drives long-term sustainable growth for all stakeholders. Last month, we executed a data center contract with a large investment-grade customer to support significant gas and battery storage buildup in northern Indiana, representing approximately $6 to $7 billion in capital investment. This project fully aligns with our strategic priorities, enabling affordability for customers, supporting economic development in the communities we serve, enhancing shareholder value for a strengthened financial profile, and prudent risk management. I want to emphasize that customer affordability remains central to our strategy. The special contract ensures that growth enhances value for our existing customers, going well beyond cost neutrality. The counterparties' use of the NIPSCO infrastructure will generate significant bill savings for our retail customers while investments in grid modernization will enhance reliability and reduce long-term operational expenses this project also delivers meaningful economic development benefits including job creation workforce development and increased tax revenues that support public services and infrastructure across indiana lastly this agreement enhances our existing financial commitments and will diversify and strengthen denies sources earnings cash flow and growth profile as sean will touch on later but first

i'll turn it over to michael to walk us through the agreement in more detail thanks lloyd i'll begin on slide eight i'm happy to share this breakthrough infrastructure agreement driving significant energy development in indiana due to confidentiality agreements and ongoing discussions with other parties we are limited in the details we can share at this time but we are excited to share these developments. Under this agreement, Genco will construct two combined cycle gas turbine power plants, each with a nominal output of 1,300 megawatts and 400 megawatts of battery storage capacity. Drawing on our expertise in the energy sector, these technology solutions were designed to ensure cost-effectiveness, long-term value, and meet system reliability Our approach delivers benefits across the board, providing customer benefits, state-level energy planning and regulatory compliance, community economic development, shareholder benefits, and aligns with MISO's capacity requirements. This collaborative model ensures that all stakeholders, customers, the state, community, investors, and MISO are positioned for success. These assets will support transmission and substation infrastructure representing a total capital investment of approximately $6 to $7 billion. The agreement outlines a multi-phase development plan with a clear demand-aligned ramp for efficient and scalable employment of resources. We plan to submit this special contract agreement to the IURC for review before year-end and expect approval in the first half of 2026. The agreement is structured with a 15-year initial term providing long-term stability. Our returns will be generated under a fixed-rate contract structure with consistent capacity payments and pass-through treatment of certain costs. Termination protections also help mitigate early exit risk and further safeguard financial integrity. Furthermore, we have entered into an engineering procurement and construction agreement with a joint venture between Quanta Infrastructure Solutions Group and Zachary Industrial for development of the two GE Veronova state-of-the-art CCGT stations. Additionally, we have signed a separate EPC contract with Quanta to lead the construction of our advanced battery storage facilities, reinforcing our commitment and capabilities to deliver effective, reliable, and sustainable energy solutions for Indiana. We're confident in our ability to execute this project effectively, safely, and with minimal disruption to our existing operations. As Lloyd noted and has highlighted on slide 9, affordability is central to our strategy, particularly in an inflationary environment where energy costs can pose significant challenges. This project has been carefully structured to uphold NISORCE's commitment to customer affordability so that growth does not come at the expense of existing customers. NYSource has to prioritize customer affordability by structuring a special contract that ensures NIPSCO retail customers are not financially responsible for the infrastructure costs associated with serving this large load customer. These protections apply both during the contract term and at its conclusion. This arrangement will allow for approximately $1 billion to be passed back to our existing NIPSCO electric customers, creating bill savings over the contract life. Through the construction and development of new assets, we are building a more resilient, future-ready grid. Moving to slide 10, this project drives meaningful economic development in Indiana, creating more than 2,000 jobs, spanning a range of skill levels and industries, and contributes to long-term employment opportunities. The boost to local and state tax revenues from an investment of this magnitude is tremendous, enhancing the overall value and sustainability of the community by supporting public services and infrastructure. Beyond direct financial contributions, the initiative promotes workforce development in our communities while also attracting top talent, energizing Indiana's economic economy and positioning the region for the sustainable economic growth we continue to see strong momentum from large load customers combined with the recent commission approval of the genco structure we are unlocking a differentiated business model one that protects the benefits and provides benefits to existing customers while enabling us to serve new large load customers with speed and flexibility. These developments give us a high confidence in the pipeline, which Lloyd will speak to later. I'll now turn things over to Sean.

Thanks, Michael. Good morning, folks. I'll start on slide 11. As Lloyd and Michael have both highlighted, the Genco investments we plan to develop will enhance the value proposition our business delivers to its customers in Indiana and will enhance long-term shareholder value. This partnership represents an investment inventory of approximately $7 billion, incremental to our refreshed $21 billion base plan capital expenditures forecast. Consistent with rate designs from our base business, Genco's capital investments are designed to drive revenue and earnings growth immediately and will track the rate of deployed CapEx, which will bolster NISOR's financial profile. This partnership is projected to be accretive for NYSource shareholders in two key areas. First, over the initial term of the contract, the returns generated are forecasted to achieve a rate of return greater than NIPSCO's regulated rate of return. Second, the project is accretive to NYSource's earnings per share forecast in all years of the plan. Strong cash flow returns are forecasted from this project, which will provide a broad range of financing solutions to achieve two primary goals. One, maintain our commitment to credit quality and achieve a 14 to 16 percent FFO to debt in all years of our plan. And two, maximize the long-term value creation to shareholders by minimizing financing costs. Genco investments are expected to strengthen Nysource's financial position by diversifying and increasing its earnings and cash flow potential while also establishing a new platform for long-term growth and development. Turning to slide 12, we recognize the tremendous growth potential ahead and have carefully and diligently built comprehensive risk management protections into our plans to protect the long-term stability of our enterprise operations. Importantly, the contract provides for a fixed-rate structure which mitigates exposure to dispatch, fuel, and merchant power risks, providing stable, predictable earnings and enhances long-term planning confidence. To further safeguard value creation, the termination payment mechanisms will mitigate early exit risk and uphold financial integrity throughout the life of the contract. The contract includes certain cost-sharing arrangements designed to mitigate construction execution risk. The rate design is developed to allow for recovery of our currently projected construction costs over the agreement's term. We are confident that the provisions we've incorporated into this contract will enhance our financial flexibility and positions NYSORS for continued success. Looking ahead on slide 13, we have a clearly defined path towards successful execution of this initiative, supported by key milestones. As announced last month, this data center contract is a strategic step forward in our long-term vision and approval of the Genco model supports the speed to market customers need to ramp their services. The additional financial disclosures provided today extend our long-term business and financial plan and build upon a premium-based business. Our future trajectory is enhanced through this project's multi-year development cycle and achieves full growth potential by 2032. Shifting gears, slides 14 and 15, detail our third quarter adjusted EPS of 19 cents per share compared to 20 cents per share for the same period last year. Earnings benefited from constructive regulatory outcomes at NIPSCO Electric and Columbia operations. These gains were offset by depreciation from new assets placed in service, the impact of higher balances of long-term debt, and increased operating expenses. On slide 16, we've refreshed our five-year capital expenditure plan outlook, starting with a base capital plan of $21 billion, which supports our six-state traditional utility footprint. The refresh in our base capital plan is $1.6 billion larger than our prior base plan. CapEx increases are driven by several projects moving from our upside plan, including MISO Long Range Transmission Tranche One, PHMSA Compliance in Ohio, and customer transformation initiatives supporting the enterprise. In addition to the base plan investment, we are now introducing approximately $7 billion of data center investment at Genco for a consolidated total of $28 billion of capital expenditures over the next five years. The magnitude of this new capital plan is substantial, signaling one of the largest investment cycles in NYSORCE's history. This significant increase, nearly 45% higher than the previous five-year outlook, demonstrates the company's proactive response to evolving market demands and invests in safe and reliable energy systems to support our communities, especially as the sector approaches a generational opportunity driven by digital transformation across industries. Beyond the refresh in the base capital plan, we have also updated the upside capital portfolio of projects supporting our traditional utility operations. These projects now estimate at $2 billion of CapEx and reflect MISO DLOL compliance projects, electric transmission investments, and system modernization and enhancement. These projects remain outside our current guidance and once they reach our threshold to be included in our base plan, we will flow these through the full plan. As we assess market and system requirements, new long-term investments arise beyond our base and upside plans. These are highlighted on slide 17. All of these projects require further development and we are actively pursuing their commercialization. Consistent financial execution has strengthened our balance sheet, allowing NiASource to be flexible in capital allocation and be opportunistic to invest more in our system to enhance safety and reliability when necessary. Our updated long-term financial commitments are shared on slide 18, which reflect the increased investment opportunity we are now position to access. There is no change to our current year projection. We are reaffirming 2025 adjusted EPS guidance of $1.85 to $1.89, expecting to achieve results in the upper half of this range. As Lloyd highlighted earlier, we have bifurcated the cash flow returns associated with our existing utility operations and are defining those through our base plan guidance. We are introducing new disclosure for the cash flow profile of the GenCo business model now that it has been approved by the IURC. This new investment thesis will combine with the base plan guidance to produce consolidated financial returns and guidance range. We expect our base plan, adjusted EPS, to grow annually at 60% from 2026 through 2030, incorporating the refreshed financials in our plan. This provides the foundation for our 2026 guidance range, which we are initiating. Consolidated adjusted EPS of $2.02 to $2.07 per share. Included in this range is 1 to 2 cents per share coming from the development of Genco-related assets. Beyond 2026, we expect our base plan to continue to grow annually at 6 to 8 percent, which is fueled by a continuation of the 8 to 10 percent rate-based growth planned across the next five years to support safe and reliable operations across our six-state utility portfolio. Similar to 2026, we are now incorporating returns associated with new data center investments, which now produce a forecasted consolidated rate-based growth of 9% to 11% over the same five-year horizon. The returns associated with these investments provide for a consolidated adjusted EPS CAGR of 8% to 9% through 2033. Importantly, we will continue to rebase our annual base plan adjusted EPS growth guidance off of actual results, allowing for outperformance to compound across the plan horizon. We are committed to minimizing the financial impact that our safety, reliability, and compliance investments have on our customers. The Genco structure enables an increase in capital investment without those expenditures flowing to existing customers. In addition, the customer flowback mechanism from this contract refunds system costs to customers while eliminating risk associated with fuel costs for large load generation assets. And finally, operational excellence and innovation in our operations project flat O&M over the life of the plan, all of which help support annual bill increases of less than 5% across NYSource. Additionally, we remain committed to 14% to 16% FFO to debt in all years of the plan. Slide 19 details our financing plan. Our credit metrics have continued to improve and strong operational cash flow continues to support capital investments. Long term, Genco will further strengthen our balance sheet while we maintain financing flexibility to meet our strategic goals. We're excited to expand our partnership with Blackstone infrastructure partners through Genco. As minority interest holders, Blackstone will contribute 19.9 percent of all investments, supporting both current initiatives and future growth opportunities. Blackstone has committed $1.5 billion in equity, which reinforces our capital structure and positions Genco for long-term success in meeting the evolving energy demands of data centers. Efficient financing plans help to avoid financing drag and minimize public equity dilution to our shareholders, thereby maximizing overall return. We continue to favor utilization of our ATM structure. As of September 30th, we have settled all forward agreements under the ATM, which approximately $50 million of remaining capacity in the program. We expect to issue $300 to $500 million of maintenance ATM equity annually across the five-year plan to support our consolidated capital expenditures. Turning to slide 20, the company's adjusted EPS trajectory reflects strong and consistent execution, with adjusted EPS increasing from $1.37 in 2021 to a projected adjusted EPS of $1.88 this year based on our guided midpoint, representing an impressive 8.2% CAGR over the five-year period. This performance underscores the resilience of our base plan, which has historically outperformed expectations, and is projected to sustain 6% to 8% annual adjusted EPS growth through 2030. With that in mind, I'll point out the midpoint of our 2026 consolidated adjusted EPS guidance range of $2.02 to $2.07 represents an 8.8% growth from our 2025 midpoint. Building on this proven foundation, the introduction of GenCO as a meaningful layer of growth, contributing an incremental 10 to 15 cents per share in 2030, growing to 25 to 45 cents per share through the horizon for a consolidated adjusted EPS CAGR of 8 to 9 percent. The GenCO EPS contribution range incorporates the recently announced data center agreement and contemplates multiple customers at the top end. Our strategic negotiation pipeline of 1 to 3 gigawatts, which Lloyd will touch on momentarily, offers us the opportunity to exceed the top end of the range. We have consistently demonstrated strong execution and growth, as reflected on slide 21. Our dedication to customers, investors, employees, and all stakeholders remains at the core of what we do. Strong execution of our base plan, including operations, financing, regulatory, and prudent investment strategies position us favorably as we step into 2026 and beyond. The value proposition NYSource continues to offer investors is diversified and regulated utility assets with the opportunity to invest in both programmatic gas infrastructure and the long-term energy transition story of a fully integrated electric business. These elements have been core to our story, and the emerging opportunity to support economic development, onshoring, and data center development truly differentiate our value proposition relative to many alternatives in the market today. And with that, I'll turn things back over to Lloyd.

Thank you, Sean. We are proud to have secured a data center contract with a credit-worthy commercial partners, positioning us to deliver on all of our key strategic objectives as outlined on slide 22. Our teams engaged across an array of stakeholders to protect our retail customer base while expanding shareholder investment opportunities, diversify our earnings profile with stable, predictable contracted earnings and cash flow, capitalize on low growth and data center opportunities, which validates our growth thesis in Northern Indiana, and establish a customer-centric business model that supports our communities. This partnership strengthens our competitive position as we continue negotiations with additional prospective customers and advance our strategy to deliver long-term value to Northern Indiana and our stakeholders. Finally, moving to slide 23, our GenCO strategy is underpinned by a robust and growing pipeline that positions us for long-term success in the data center market. This commercial partnership represents the proof set of the generation capacity opportunity we've highlighted for the past year. We have secured data center load that will be backed by 3 gigawatts of generation capacity with negotiations progressing on an additional one to three gigawatts of projects from new and existing customers, creating a clear path to scale. Looking ahead, developing opportunities could expand this pipeline even further by an additional three gigawatts, reinforcing our ability to deliver sustained growth. This opportunity showcases the strength of our team and the precision of our strategy. I'm incredibly proud of the discipline and focus that has brought us to this point. Our team's operational excellence, customer focus, and accountability continues to set NISOs apart, and I'm confident it will be the driving force behind the successful execution of this initiative. With that, we'll open up the line for questions.

We will now begin the questions and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. Also, a quick friendly reminder to please limit yourself to one question and one follow-up. Thank you. Now, first question comes from the line of Charles Perez from Wells Fargo.

Hey, guys. Hey, guys. How are you? Morning, Lloyd. So, just without going into specific names, can you just maybe speak to the quality of the customer kind of behind the agreement? So is it a true hyperscaler, counterparty, or co-locator? And kind of now that you've secured this initial deal, how are you sort of thinking about the broader pipeline as we think about that one to three gigs of negotiation? So the broader counterparty quality and what it could mean to the CAGR.

So what I will say is this is a very large investment-grade data center customer that will be served in front of the meter via the NIPSCO transmission network. As mentioned earlier, you know, we're going to build 3,000 gigawatts. It'll be 2.4 gigawatts of load. I think as we think about our pipeline, I think it was mentioned earlier, I think what we've unlocked is a new business model. You know, we've got, I think, September 24th, we got the JNCO declination. I think you've seen through this transaction is really a blueprint of what we're going to execute on to go forward. So as we look at negotiating with, you know, subsequent counterparties, you know, we've shown you a blueprint of all the things that we're going to put in place before we announce this to the market. I think the team knows that we've aligned the organization to focus on these things, and we have a path towards execution on all of these subsequent customers, and we're excited about it.

Perfect. Appreciate that. And then just maybe a quick one for Sean. I know, obviously, just on credit, you talked about sort of the targets, but focusing a little bit more on sort of the downgrade thresholds, especially as you become more integrated, any kind of sense on how they could think about the thresholds as you become more and more integrated? It's, I mean, it's obviously, you guys have highlighted, it's a new business model for them. Quantitatively, it seems to make a lot of sense, but just more on the qualitative aspects. Thanks.

Yeah, sure. Thanks. Thanks, sir. I appreciate the question. So we've been actively engaged with our rating agencies while we've been developing this strategy. And candidly, we think that the thoughtful risk management provisions in the contract really provide for protection that's pretty similar to our existing base business. And we don't believe a change in thresholds is warranted or will occur. Our current guidance is 14 to 16 percent in all years of our plan, and our downgrade threshold is 13 percent. So there's already adequate cushion baked in, and we think strengthening in the business, the cash flow profile of the business, should continue that trend.

Fantastic. Thanks, guys. Appreciate it that addressed it. See you soon.

Thank you. our next question comes from the line of nicholas campanella from barclay the lines open hey good uh morning thanks for all the updates um morning i just wanted to ask morning uh maybe you could just kind of talk a little bit about um the 25 versus the 45 cent range and what puts you at the high end or low end of that contribution and i just wanted to confirm that the three gigawatts in strategic negotiations is incremental to this figure?

Sean, you want to take that one?

So to retain our competitive advantage, we can't disclose the individual customer contributions. However, the Genco structure adds, you know, a meaningful layer of growth that we've highlighted here. The 25 to 45 through 2033 contemplates multiple customers at the top end. but our full strategic negotiation pipeline, one to three gigawatts, would outperform the top end of that range. Now, depending on customer preferences, choice of technology, timeline for that development to occur, customer ramp rate, it can move around a fair amount, which is why we've got a bit of a broader range. But the squaring of this is 25 to 45, that range. The customer that we announced in September fits within that range. And then the top end of that range would include some portion of the advanced negotiations with the ability to outperform the range in total if all of that were to be unlocked.

Okay, I appreciate that. Appreciate the clarification. Thank you. You mentioned there's a $1.5 billion commitment, I think, to GenCO for minority interest holders. Just what is the contribution then from the NYSOR side from an equity perspective? Is it just 50% of that remaining $5 billion? How should we kind of think about that in terms of funding Genco and the capital structure?

Yeah, all of the guidance, the earnings guidance that we've provided today is projected reflecting the total cost of financing, including all equity, all debt, all non-controlling interest associated with minority interest investors. So all of that's already reflected in the earnings per share contribution. The $300 million to $500 million equity is the total amount of equity in our guidance range for NYSource. That supports the full $28 billion of capital expenditures that we've announced today. All of that is reflected in that range of $300 to $500 million annually of ATM equity from NYSource.

I appreciate it. I'll get back in the queue.

Our next question comes from Julianne Dungleon-Smith from Jeffries.

Excellent. Hey, good morning, team. Thank you guys very much for the time. Excellent update. Nicely done, guys. In fact, if I can push a little bit further. Hey, good morning, Lloyd. Good morning, Sean. Wild. Just with respect to the 25 to 45 cents here, can you elaborate a little bit of what's reflected here? I mean, is it just the CapEx, the first 7 billion here through the first five years? How should we think about the totality of CapEx to get you there? And then And related in tandem, right, you have this one to three gigawatts of upside here. Can you talk about what's included in what that earnings profile would look like? Is it as simple as taking the 25 to 45 and, I don't know, say doubling that for the argument's sake? How would you help frame out the sensitivity on that front, too?

So answer the same question, John.

Thanks. Hey, Julian. So the CapEx that we've projected in our five-year plan ranges from $6 to $7 billion. That supports GenCO development. That includes all of the capital necessary to support the customer that we announced in September. It also reflects some capital allocation that allows us to competitively compete for these large load opportunities and position us to access the strategic negotiations that Lloyd and Michael highlighted earlier. We've got no incremental disclosure in guiding within the range of $0.25 to $0.45. That $0.25 to $0.45 of earnings power is reflective of the customer we announced in September and on the higher end would reflect additional strategic negotiations flowing into it, but is not required for us to reach that range.

Got it. All right. Lloyd, I can try asking you again, right? Let me put it this way. Take another shot at it. You know, let me put it this way. If you got the full amount of that three, and again, I'd love to hear your confidence on being able to pursue this full three. is that how would you characterize the sensitivity around that if there's any other way to get at it again i i i get that you don't want to be too overly specific here but if if you can a little and obviously the timing on that three so the part i'm going to talk to this is mike i'm going to talk to the three gigawatt and the opportunity of the pipeline and then i'm going to let sean highlight a little bit more of how that three gigawatts would reflect into the earnings range on that.

But Lloyd hit a little bit of this earlier. I think one of the key points of this when you look at that three gigawatts and the executability of it, the fact that we have the ability to move quickly on the regulatory model, that we have the flow back to customers, that we have the engineering procurement and construction partnership lined up, that we have long lead time equipment secured, and that we have the ability to be able to execute that and pull that through from a construction environment, that gives us the speed to market and execution that gives us high confidence in the ability to execute on other opportunities, you know, as we move those forward and we move those into commitment.

So we feel very good about that three gigawatts from the aspect of that we can execute it, we can pursue it, but we will do that as we have here in a disciplined, methodical manner that supports our balance sheet, supports our customers, and lends to the overall accretion sean yeah then it may be two two other points as we think about other future customers the choice of technology the construction timeline will matter and how it squares within the range some assets are more quick to construct such as battery that could accelerate itself into the construction timeline versus something that might take multiple years such as some gas technologies so that would be important to be able to answer your question julie so that, Julian, so that customer preference does matter into how it would flow into the guidance range. That said, we do see an opportunity to accelerate customer demand ahead of even 2033. So as we think about that CAGR, that 25 to 45 cent CAGR, we do see potential upside in our current forecast, even with the existing customer we announced in September. Should we have the ability to accelerate customer demand and or construction timelines, we could see that pull closer in our forecast.

Yeah, understood. Okay, fair enough. Lloyd, quick squeezing this in, thoughts on the state in Indiana, your relationship. I'm sure you've talked with the governor's office, et cetera. Any two cents you'd offer here quickly? I'd love to get your candid assessment here.

Yeah, I think that Indiana is open for business. I think that if you talk to the governor's office, and when we have conversations with the governor in his office. They like these economic development opportunities. They continue to be focused on affordability. So the idea that this transaction flows back over a billion dollars to customers over the contract period, I think that the relationship is positive. I think that more, I think that they're interested in more of these opportunities. But I think affordability is going to be on the forefront. And we're very focused on that. And developing this GenCO model helps with that in a great way.

Awesome. All right. I'll leave it there, guys. Thank you. Nicely done. Congrats again. I'll take the over. Thanks.

Thank you. Our next question comes from the line of EY Johnson from J.P. Morgan. The line's open.

Hey, good morning, everyone. Just wanted to start on kind of the learnings and business expertise gained in the first data center contracting announcement? You know, I know that Genco probably plays a big role here, but, you know, just thinking about the keys to getting this project done and then, you know, how you guys can build on that and go ahead and execute additional contracting announcements going forward.

Michael, I think you can handle this. So, what I would say is that we feel like this really creates a strategic platform for growth for us. If you, you know, reflect on the comments that lloyd mentioned earlier we have a 2400 megawatt system now this will double that system and load we're building 3000 megawatts of generation to support this so when you think about the business learnings we have created a foundation and a platform and as was mentioned earlier through that regulatory through the epc through the long lead time equipment through the ability of execution it only heightens our ability to be able to execute on future opportunities So overall, we feel like though there's plenty of learnings and we will continue to evolve, it really helps set us up in a strategic way to be able to develop the rest of that pipeline.

Awesome. And maybe just to expand on that a little bit, I think you talked a bit about kind of some of the downside and risk protections you have in the initial contracting. And, you know, I recognize you just touched on that a bit, but just can you expand a little bit about that?

Just, you know, what types of protections are in these contracts and how you can kind of and what those do for you know overall execution on these projects yeah so one of the things i'll say to that is we started out with a fundamental pillar of that in this genco structure we wanted to maintain nipsco's financial integrity and we've given very thoughtful consideration to the risk profile of new investments we have built protections into the various contracts to address these risks associated with multiple factors, and we've included features such as cost-sharing provisions as well. Great. I'll leave it there. Thanks.

Thank you. Our next question comes from the line of Bill Apicelli from UBS. The line's open. Hi. Good morning.

Just a question on if you could speak a little bit to maybe what the return profile or capital structure assumptions are within the Genco?

Sean? Yeah, thanks, Bill. Appreciate the question there. So we can't disclose the exact ROE as it's confidential with the customer, and we've not disclosed the targeted return for Genco, only that we expect it to achieve an overall return realized greater than NIPSCO's regulated rate of return. That helps us support the development, construction, and the ownership over the life of the investments. And then in terms of the cap structure itself, we sought for and were approved by the IURC some level of flexibility in the capital structure for Genco. Given the construction development cycles to support the speed to market for new customers, we'll strive to capitalize Genco in a manner to do three things. Number one, support our existing financial commitments, including the 14 to 16 percent FFO to debt that we expect in all years of our plan. Two, obviously safely and reliably support the cash flows for construction and the development of these assets for our customers, and then finally maximize the long-term value to our shareholders. Minimizing dilution and financing friction is the key. That helps us realize the greatest return possible over the life of the assets.

Okay, thanks very much. And then just a question around the timing. You talked about some opportunities for upside here and pulling forward or accelerating maybe the ramp. So, I mean, it looks like most of the capital, based on the capex slide you have you know i think about 6.4 of the gross capex for genco is spent through by the end of 30 um but we're talking about you know sort of full ramp on 2033 so maybe you can speak to that sort of timing differential of when most of the capital appears to have been invested versus you know the realization of the earnings the majority of the cap expend bill occurs between 2025 and 2030 so there's additional work to complete the project that occurs outside of our five-year plan horizon that we've guided to today that's critical because that helps us get to the final energization steps necessary

for the customer to conclude their ramp which as we stated previously finalizes in 2032 so it's slightly outside our plan horizon from a capital expenditure standpoint. When we think about the contract, it provides for a fixed rate structure. It functions like a straight fixed variable rate design. So as additional capital expenditures are developed, the recovery follows those investments. Thus, you need to step through the completion of the construction cycle before you see the fixed rate contract step up to a full rate and full return. So the structure provides for stable, predictable earnings. It enhances our long-term planning confidence. But it's key to link both the conclusion of the construction timeline to energize our customers at the highest possible ramp that they can then utilize. If that all can accelerate, that's the pull forward that you could see and could frame as greater upside both to the 2033 guidance range, the CAGR, as well as the intermediate periods that we guided to ahead of that.

Okay. And then just to clarify, I mean, as far as the upside from the negotiations ongoing, I mean, that can be realized within the same time period. I mean, obviously, I know it depends on how it plays out, but I mean, is it practical from just a planning perspective to assume that some of this could be stood up, you know, within this window of 233 in terms of the additional entry?

Yes, it is very practical.

Okay. And that could drive higher EPS. upside.

That's correct.

All right. Thank you.

Thank you. Our next question comes from the line of Steve Fleischman from Wolf Research. The line's open.

Hey, everybody. Congrats. Morning. So just maybe this is a question kind of more on both the kind of earnings and cash flow profile of Genco. So if I take the incremental investment net to nice horse and just did a normal equity and return and such, you know, it would be, I think, maybe more than 10 to 15 cents by 2030. But you're also issuing like a lot less equity than normal and such. And then you've got this ramp up in later years. So can you just give kind of, I feel like the contract's been structured in a way that kind of balances those two in some way. Could you just talk to that and help us better understand how much more than is needed to get to this 2033 in terms of capital investment, if anything? Sean?

Yeah, sure. So, Steve, the $7 billion guided CapEx total to support Genco is the total amount of capital necessary for us to develop through 2032 and would be enough capital for us to afford that full range of 25 to 45 cents through that horizon through 2033. To the extent that can accelerate, meaning the capital could be consumed and the construction could occur faster, that could create upside for us as well as the customer, as the customer then would be able to ramp faster than what the original timeline for the construction was contemplated to be. Incremental to that would be the upside portfolio that Lloyd just answered the question to, that Bill asked the question about. None of that CapEx is necessarily in the five-year capital guidance. All that CapEx then would be incremental CapEx, and thus potentially incremental financing, which would be necessary for us to realize greater returns over the five-year horizon, or as we look through 2033, greater returns outside the range of $0.25 to $0.45 per share.

Okay.

So just the $0.25 to $0.45, because that includes both the current deal plus the strategic negotiations, you don't need more capital to get to that range beyond what you've said? just to clarify steve the current customer and the current guidance range the 25 to 45 cents is is inclusive of just the customer that we've announced in september there is the potential that additional customers could push up to that push us to the higher end of that range and that would require incremental capital okay and then the developing opportunities a whole other bucket. You got it. That's exactly right.

Okay. And then the, but in terms of the core customer, we're capturing most, if not all, the capital in the $7 billion.

In the $7 billion, yes. Inside the five-year horizon, just due to the timeline of the construction, you just don't see the 2031 and 2032 capital being allocated on the annual slide, but it's reflective in the $17 bucket that we guided to.

And then the cash flow portion of this, you know, relative to $7 billion, when you look at the incremental equity for your plan, it's relatively modest. So assume there's stuff structured here to help, that's been able to help minimize equity need.

Yeah, it strengthens as we go. So you do see the increased cash flow profile start to strengthen once the customer begins ramping in 2027, and then grow more significantly around 2030. The plan horizon itself doesn't give you annual guidance beyond 2030, but you'll see strengthening cash flows coming in that time period as the customer begins to ramp. Understood. Thank you.

Thank you. Our next question comes from the line of Nick Amikuchi from Everport.

The line's open.

Thanks.

Yeah, sorry, Sean. I'm going to pile on here if I can. But just to think of it a little bit more simplistically, if we were to look at kind of, you know, the gigawatt addition and then kind of the EPS accretion is, I guess, roughly $0.08 per gigawatt, a good rule of thumb as we think about this. I know it's probably overly simplistic, but it's just for our sake. we have no no incremental guidance on a earnings per share per gig because the the customer technology choice the construction timelines will all have an implication there nick there uh shooters gotta shoot yeah so um uh and then as we think about as we think about kind of the um um the the procurement and the epc contract associated with it um when we're thinking of the quanta contract is that strictly for the first three gigs um or is that does that kind of do you have the ability to kind of upsize that um given given the uh the opportunity you have

yes we we've set up the structure and the partnership so that we intend to be able to upsize as we grow we want to be able to have a very deployable and scalable platform which is what we have but the initial agreements cover the two ccgts and the 400 megawatts of batteries and associated infrastructure.

I think, let me add a little bit to that, Michael, in that we set this partnership up with Qantas, Zachary, so that we can execute subsequent projects a lot faster as opposed to going out doing deep RFPs and doing things that take a long period of time. I think the collective idea here is to be able to execute on what the customers need in a way that's agile and flexible. And I think this partnership allows us to do that. Perfect.

And then if I could just squeeze one more in just really quickly, too. When we think of the affordability theme, as we kind of size it up, is it kind of – is the pitch, I guess, to the government's mentioned, incremental savings that as you kind of – as you grow this, you could provide incremental savings to kind of end consumers?

That is our objective. That is our objective. as we add new customers and they utilize the transmission grid because they're using the grid that was really paid for by our current retail base, we should flow back, continue to flow back savings to our retail customers, which will help with affordability.

Thank you. Our next question comes from the line of Travis Miller from Morningstar. The line's open.

Hi, everyone. Good morning. I'm just going to go back. Good morning. I'm going to go back to the cash flow profile one more time here. In the contract, is there any cash inflow from the customer before they start ramping? And then related to that, could the financing be more short term in nature to get you those three to four years of high cash outflow for the CapEx and then ultimately get paid back once the customer started paying? Is that a way to think about cash flow profile?

Do you want to take that, Sean?

The contract has been structured to prioritize cash flow to aid in the construction timelines. And the total financing net of all of that, the contract design as well as the debt equity and minority interest forecast that we've projected today is reflective in the $300 to $500 million range of equity. In terms of where we place debt or how much debt and when that flows, we'll continue to evaluate those options. We've got a range of different opportunities on how we can do that, and we'll strive for, obviously, the lowest cost that we can on a long-term basis.

Okay, so there would be some cash flow coming in before the customer ramps. Is that the way to interpret it?

Yeah, before the customer fully ramps it.

Okay, and then one higher-level question. Why battery? Why would you add a battery onto this?

When we look at the system reliability, there's multiple facets to it. Batteries provide the capability for capacity and quick response, which when we look at the overall system, it requires a diversity of assets, everything from renewables to batteries to gas assets and more. And so we will continue to develop our system in a way that highlights that reliability and grid strength. And so when we picked these solution sets, that was part of the answer.

Okay, great. I'll leave it there. Thanks so much.

Thank you. Our next question comes from the line of Paul from Leidenberg. The line's open.

Thank you very much. It sounds like part of the seven billion dollars is either transmission or distribution. Is that all going to be spent at the GENCO, or is some of that going to be spent at NIPSCO?

Yeah, for guidance purposes, we're going to segment things into the GENCO segment, Paul.

Right, but technically, in other words, I get the guidance, but is the actual spending by taking place some of that at the utility and some of that at the GENCO?

That's really my question. Yeah. That is correct, Paul.

And then can you give us a sense of how much of the $7 billion then would be pure generation spend?

Is it – I assume it's the majority, but – It is the majority, but we're not in a position to guide within that range, Paul.

Okay. And you can't – can you give us a sense of, like, the cost per KW of the CCGTs or of the battery?

That's competitive information also.

Great. And then just to clarify, the 8% to 9%, is that essentially inclusive then of the $7 billion and the lower 6% to 8% is excluding that $7 billion? Is that essentially the way to look at that?

Yeah, our base plan guidance reflects the 6% to 8% annual adjusted earnings per share growth rate that our base plan, our traditional utility plan, has achieved in the past and which is expected to grow annually off of for actual results through the plan horizon of 2030. For the consolidated CAGR, that reflects the $7 billion of CapEx that you highlighted, as well as the returns associated with this customer, and that's what provides the range of $0.25 to $0.45 inside that 8% to 9% CAGR.

Great. And then the last question that I have is, can you provide sort of the load that goes with each of the EPS data points that you're identifying for the GenCO, so I guess it would be 26, 30, and 32, for this new customer?

Unfortunately, we cannot provide that information.

Okay. And then maybe last question. In the GENCO proceeding, some of the interveners were looking to share returns above sort of NIPSCO's allowed return on equity. Is there Is there a similar sharing mechanism that was ultimately contemplated as part of the GENCO approval, or is that yet to be determined as you go through the individual contracts?

So we'll submit the contract for this customer by the end of the year, and in that contract, there's a flowback mechanism, as I mentioned, of over-determining the contract to a little over a billion dollars going back to our retail customers. There's no sharing of returns.

That's it for me. Thank you very much.

Thank you. The next question comes from the line of Christopher Jeffrey from Mizuho.

Hi, good morning, everyone. Hi, good morning. Thanks for squeezing me in. Just regarding the decision to keep on Blackstone as a 20% stakeholder in Genco, So just kind of curious how much of a consideration there was, you know, to retaining 100 percent of the business and those earnings against insulating some of that financing risk.

Thanks, Chris. Appreciate it. Well, we believe Blackstone is really the strongest long term partner for Genco. It's a large scale strategic investor, provides a robust platform for future investment. They've got familiarity and support for the state of Indiana. They've been unwavering on how they support the growth and expansion in our communities. They've been a great partner to date. The transaction itself helps reduces our overall financing needs. It reinforces our strong balance sheet. It lowers our cost of capital. It provides diversification from traditional capital markets. The commitment of not only the $1.5 billion of equity, but really to grow these projects beyond is equal to 19.9% of the ultimate Genco pipeline. So it gives us a long surety and visibility to pricing certainty to fund a growing business, all while construction is ongoing as well. So it gives us an immense amount of flexibility that we think drives greater value for our shareholders.

Great. Thanks, Sean. And then maybe to ask one non-GenCo, just as far as the base capital plan update, I just kind of noticed that it seems to be there seems to be a lot in 2029. I was just wondering if that's any, like, specific bespoke projects or just kind of more clarity into that year.

Yeah, across the plan horizon, about 50 percent of the CapEx portfolio is natural gas investment. Twenty-five percent-ish is related to NIPSCO traditional electric operations, and about 25 percent ends up being Genco support on the generation build-out predominantly. So that's kind of the overarching profile of it. But 2029 is where we start to approach some DLL compliance requirements that are necessary for us to invest in generations. You see some larger investments in 2029 associated with that. We also start to see PHMSA compliance requirements at Columbia Gas, Ohio in 2070 and 28. MISO long-range transmission also starts to pick up really actually in 29, so it's in that same year as well.

Okay.

Thank you. There are no further questions. I will now turn the call back over to NYSORCE team for closing remarks.

Thank you for your interest in NYSORCE. We're excited about this period of time of growth in our company and appreciate your questions and investments.

The meeting is now concluded. Thank you all for joining.

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