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Released May 04, 2023 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)-- NiSource Incorporated (NYSE:NI) (Merrillville, Indiana), a holding company whose electric and gas utility units serve 3.2 million customers in six states, plans to make investments of about $15 billion over the 2023-2027 period, and has opportunities to double that to $30 billion over 10 years, company officials said on an earnings call May 3.
Click on the images at right to see NiSource's five-year capital budget, broken out by function and year.
Most of the planned spending is for electric and gas infrastructure at NiSource operating utilities, though a significant amount also will go to power-plant environmental remediation and decommissioning and demolition of coal-fired power plants. NiSource utility subsidiaries operate in Indiana, Kentucky, Ohio, Pennsylvania, Maryland and Virginia.
Regarding its environmental priorities, NiSource officials said the company expects to retire 100% of coal assets by 2028 and replace that generation primarily with renewables. It is on track for 90% reduction in Scope 1 greenhouse gas emissions by 2030 compared to a 2005 baseline. And it is reducing methane emissions through infrastructure modernization and advanced leak detection and repair.
Over the 2023-2027 period, more than half of the company's planned capital outlays will go to modernizing its natural gas infrastructure. One-fifth, or about $3 billion, of the capital budget is slated to be invested in the electric infrastructure of NiSource's operating utilities. About 17%, or about $2.5 billion, is expected to be invested in electric generation, the company told investors May 3.
Click on the image at right to see the five-year aggregate capital program by function across NiSource's six operating utilities.
NiSource's Indiana electric unit, Northern Indiana Public Service Company (NIPSCO) (Merrillville, Indiana), is adding significant amounts of renewable energy in the Hoosier State, some of which will be built under a "build-transfer agreement" (BTA) with third parties and some of which is backed by a NIPSCO power-purchase agreement (PPA).
Over the 2020-2025 period, NiSource officials said the NIPSCO unit plans to invest between $2 billion and $2.2 billion on eight "BTA" renewable energy projects, two of which have already begun operating and four of which are under construction. Two more "BTA" projects have been approved but are not scheduled to begin operating until 2025. NIPSCO also plans to purchase electricity from six other renewable energy projects under PPAs. One such PPA project already is operating while the others are in varying stages of development.
Click on the image at right to see a map of the renewable energy facilities that have been built, or are scheduled to be built, in Indiana.
Industrial Info is tracking seven capital projects involving a NiSource subsidiary valued at about $913 million.
As for the additional $15 billion in "investment opportunities," NiSource categorized them as follows:
Near Term (through 2027)
Longer Term (after 2028)
Upsides (after 2028)
On the May 3 earnings call, NiSource officials told investors the company earned $319.2 million in the first quarter, down $93.8 million from year-earlier quarterly profits of $413 million. On an operating basis, a non-GAAP measure, the gas utility unit accounted for about 85% of operating income. Profits rose at the gas unit due to new rates reflecting capital spending.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Most of the planned spending is for electric and gas infrastructure at NiSource operating utilities, though a significant amount also will go to power-plant environmental remediation and decommissioning and demolition of coal-fired power plants. NiSource utility subsidiaries operate in Indiana, Kentucky, Ohio, Pennsylvania, Maryland and Virginia.
Regarding its environmental priorities, NiSource officials said the company expects to retire 100% of coal assets by 2028 and replace that generation primarily with renewables. It is on track for 90% reduction in Scope 1 greenhouse gas emissions by 2030 compared to a 2005 baseline. And it is reducing methane emissions through infrastructure modernization and advanced leak detection and repair.
Over the 2023-2027 period, more than half of the company's planned capital outlays will go to modernizing its natural gas infrastructure. One-fifth, or about $3 billion, of the capital budget is slated to be invested in the electric infrastructure of NiSource's operating utilities. About 17%, or about $2.5 billion, is expected to be invested in electric generation, the company told investors May 3.
NiSource's Indiana electric unit, Northern Indiana Public Service Company (NIPSCO) (Merrillville, Indiana), is adding significant amounts of renewable energy in the Hoosier State, some of which will be built under a "build-transfer agreement" (BTA) with third parties and some of which is backed by a NIPSCO power-purchase agreement (PPA).
Over the 2020-2025 period, NiSource officials said the NIPSCO unit plans to invest between $2 billion and $2.2 billion on eight "BTA" renewable energy projects, two of which have already begun operating and four of which are under construction. Two more "BTA" projects have been approved but are not scheduled to begin operating until 2025. NIPSCO also plans to purchase electricity from six other renewable energy projects under PPAs. One such PPA project already is operating while the others are in varying stages of development.
Industrial Info is tracking seven capital projects involving a NiSource subsidiary valued at about $913 million.
As for the additional $15 billion in "investment opportunities," NiSource categorized them as follows:
Near Term (through 2027)
- New gas system modernization programs focused on replacing legacy plastic mains and services installed prior to 1985
- Gas transmission programs focused on inspection retrofits and reconfirmations to comply with Pipeline and Hazardous Materials Safety Administration (PHMSA) regulations
- New programs to deploy advanced metering infrastructure (AMI) for gas systems
- Increased ownership of electric generation investments utilizing the IRA's tax transferability provision
Longer Term (after 2028)
- Continuation of legacy plastic, gas transmission and gas AMI programs
- Electric generation additions to support anticipated capacity requirements
- Electric reliability and performance investments focused on infrastructure replacement, continued grid modernization and system hardening
- FERC regulated electric transmission projects included in MISO's multi-year Long Range Transmission Planning initiation
Upsides (after 2028)
- Electric T&D investments to support transportation electrification, including utility-owned charging points
- Generation investments to support incremental demand, asset retirements and decarbonization
- Investments in Renewable Natural Gas production and transportation infrastructure
- Investments to support Hydrogen production, transportation, storage and consumption in our territories
On the May 3 earnings call, NiSource officials told investors the company earned $319.2 million in the first quarter, down $93.8 million from year-earlier quarterly profits of $413 million. On an operating basis, a non-GAAP measure, the gas utility unit accounted for about 85% of operating income. Profits rose at the gas unit due to new rates reflecting capital spending.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
