Microsoft signs 20-year NiSource power deal for northern Indiana data center

Microsoft has signed a 20-year energy agreement with NiSource for a planned data center campus in northern Indiana, adding roughly 1.1GW to the utility's power portfolio. Data Center Dynamics reported the signing on 19 October. The contract commences in 2028, when Microsoft is expected to begin offtaking power for the facility.

The campus will be served under a new large-load rate class, with large-load users required to fund the generation and infrastructure that powers their own facilities. NiSource says the structure is designed to protect existing customers from price rises. Power is to be delivered through the utility's subsidiary, NiSource Generation Company LLC, known as GenCo, which is expected to provide the transmission and generation capacity behind the load.

Alongside the Microsoft contract, GenCo has signed a tolling agreement for 600MW of battery storage, to be built by an affiliate of AGP Group. That is a little over half the 1.1GW the Microsoft load adds to the portfolio.

"Affordability is not separate from economic development; it is a key pillar of our GenCo model," NiSource president and CEO Lloyd Yates said. "This agreement reflects the balanced approach we believe is needed for Indiana to attract significant investment and create long-term jobs."

Jeff Riles, Microsoft's senior director of energy markets, said the company has "always been committed to paying our own way" and that the partnership with NIPSCO would support growth and protect ratepayers while supporting a reliable grid.

The reporting does not explicitly confirm which campus the contract serves. Data Center Dynamics notes it appears likely to cover Microsoft's under-construction La Porte project, announced in 2024 as a 245,000 sq ft data center on 489 acres at Radius Industrial Park, part of a $1bn investment in Northwest Indiana. A first phase would include six data centers and a substation. In April 2026, Microsoft said it was now planning 17 buildings on an expanded plot between East 250 South, East State Road 4 and Stevens Road, without saying how many would be data centers. The company also owns 939 acres in Mishawaka, Indiana, also thought to be intended for a data center.

A 20-year contract with a single creditworthy customer lets NiSource build generation whose cost sits with the load that caused it, rather than with other customers — the outcome NiSource is claiming for the structure.

A 2028 start also means the generation and the 600MW of storage must be built before deliveries begin; the schedule risk sits in the supply chain rather than in the capital markets.

The reporting does not give a contract value or a capital cost for the added generation, leaving the return on the 1.1GW and the pricing of the battery tolling undisclosed.