NiSource Inc. (NI): ANSOFF MATRIX [Dec-2025 Updated]

You're looking at how NiSource Inc. is planning its next few years, and honestly, it's a classic utility balancing act-stable infrastructure meets aggressive new growth. As someone who's seen a few cycles, I can tell you their focus is clear: they are accelerating the $21.0 billion base capital plan to hit the top end of their $1.85 to $1.89 adjusted EPS guidance for 2025 through core business improvements. But the real story is the diversification, specifically that $7.0 billion GenCo investment dedicated to powering data centers, which is a new market approach for them. We need to see how they manage the execution risk on these new products and markets while keeping the lights on reliably; let's dive into the four-part plan below to see the concrete actions driving this strategy.

NiSource Inc. (NI) - Ansoff Matrix: Market Penetration

Market Penetration for NiSource Inc. (NI) centers on deepening its presence within its existing service territories by maximizing the value derived from current customers and infrastructure through focused investment and operational excellence.

Infrastructure Modernization Investment

You are accelerating the $21.0 billion base capital plan to modernize infrastructure, which supports the regulated utility operations. This base plan is part of an extended commitment running through 2030. This level of capital expenditure is designed to support an expected 8% to 10% rate base growth annually from 2026 through 2030. The rate base growth is the mechanism to achieve financial targets within the existing service footprint.

Customer Program Engagement

A key lever in market penetration is increasing customer participation in existing energy efficiency programs. This drives usage optimization and customer engagement, which can be tracked across the gas and electric segments. Here's a look at recent participation numbers:

The total combined participation across both gas and electric efficiency programs reached 1,190,588 customers in the latest reported period.

Operational Cost Reduction via Analytics

NiSource Inc. is leveraging AI and advanced analytics to drive internal efficiencies. Specifically, the Project Apollo initiative, which deploys AI in scheduling and work management across 17 operations centers, has already saved over 60,000 labor hours since 2023. This productivity gain has helped keep operating and maintenance (O&M) costs flat at $1.4 billion annually since 2016, which is a significant achievement in this capital-intensive sector.

Earnings Target Through Rate Base Growth

The focus on the existing market is directly tied to financial performance. NiSource Inc. is targeting the upper half of the $1.85 to $1.89 adjusted EPS guidance for 2025. This is being pursued through the aforementioned rate base growth, which is projected to be between 8% and 10% annually for the 2025-2029 period.

Service Reliability and Customer Experience

Enhancing service reliability is crucial for retaining and satisfying the existing customer base. Reliability improvements are measured through outage metrics and direct customer feedback. The utility has seen its Customer Average Interruption Index (CAIDI) as low as 150 minutes in one reporting period. Furthermore, in 2024 data, the NIPSCO website was ranked first overall out of ninety-three utilities surveyed by E Source for customer engagement.

You need to keep driving those reliability scores down. Finance: draft the Q4 2025 operational expenditure variance report by next Tuesday.

NiSource Inc. (NI) - Ansoff Matrix: Market Development

Market Development for NiSource Inc. centers on expanding its regulated utility footprint and applying successful operational models to new customer segments and geographies within its existing six-state service area and beyond.

Systematically expanding gas and electric service into unserved, high-growth areas within the six-state footprint is supported by ongoing infrastructure investment. NiSource is executing on a $19.4 billion base Capital Expenditure plan spanning 2025 through 2029, which is projected to support 8%-10% rate base growth. The company currently serves approximately 3.3 million natural gas customers and 500,000 electric customers across Indiana, Kentucky, Maryland, Ohio, Pennsylvania, and Virginia. For example, Columbia Gas of Pennsylvania filed for a rate adjustment representing a $110.5 million annual increase to fund modernization, including replacing nearly 1,500 miles of aging pipeline.

Targeting large-scale commercial and industrial customers in adjacent counties not currently served is evidenced by growth in existing customer classes and new project development. Columbia Operations reported year-over-year revenue increases across its segments, with industrial segments showing an increase of $7.8 million in a recent quarter. Furthermore, new projects, such as a concrete and aggregate facility and an EV battery plant in Indiana, are being supported by the utility's growth plans.

Exporting the successful NIPSCO GenCo model to attract hyperscaler customers in other NiSource states is a key strategic vector, following the Indiana Utility Regulatory Commission approval for NIPSCO Generation LLC. This structure is designed to isolate the costs of serving new, large-load customers, such as data centers, from existing retail ratepayers. The consolidated capital expenditure plan, which includes nearly $7.0 billion in strategic data center investments, is projected to support a consolidated non-GAAP adjusted Earnings Per Share compound annual growth rate (CAGR) of 8%-9% for 2026 through 2033, with the GenCo contribution reaching $0.25-$0.45 by 2033.

Pursuing strategic acquisitions of smaller, regulated utilities in contiguous US states is a potential avenue for growth, though recent public data focuses on organic growth and the GenCo structure. The company's current structure involves five gas local distribution companies (LDCs) and one gas and electric utility. The customer base across these regulated entities provides a foundation for potential consolidation in adjacent markets.

Utilizing existing pipeline infrastructure to serve new municipal or wholesale gas customers is an inherent part of maintaining and modernizing the gas network. NiSource distributes natural gas to approximately 3.3 million customers through approximately 55,000 miles of distribution main pipeline and 1,000 miles of transmission main pipeline across its service territory. The company's 2024 investments of $1.5 billion in infrastructure modernization support system integrity and capacity for new load.

Here are the customer counts for the regulated utility operations:

The overall 2025 non-GAAP adjusted Earnings Per Share guidance is reaffirmed in the upper half of the $1.85-$1.89 range.

NiSource Inc. (NI) - Ansoff Matrix: Product Development

You're looking at how NiSource Inc. is developing new offerings within its existing utility service areas, which is the Product Development quadrant of the Ansoff Matrix. This involves significant capital deployment into cleaner fuels and grid modernization.

For the fiscal year 2025, NiSource Inc. is reaffirming its non-GAAP adjusted EPS guidance in the range of $1.85-$1.89.

The focus on low-carbon fuels includes introducing alternatives into the existing gas network. Columbia Gas of Pennsylvania launched a multi-phase hydrogen blending project in 2023, testing a blend rate of up to 20% hydrogen with natural gas in its distribution infrastructure. Furthermore, NiSource is exploring a fully regulated Renewable Natural Gas (RNG) business model, leveraging Virginia's 2022 Energy Innovation Act. Voluntary green tariffs offering RNG access have been available since 2023, enrolling over 500 residential and commercial customers through November 2024.

For electric customers, the rollout of advanced technologies is tied to substantial capital plans. A recent announcement detailed a $7 billion plan to power data center growth in Northern Indiana, which includes the construction of 400 megawatts of battery storage, slated to begin in 2026. This follows earlier plans that included an allocation of $1 billion for battery storage and gas peaking plants as part of a larger investment wave. Separately, the Dunns Bridge II solar project, currently under construction, is planned to include 75 MW of battery storage paired with 435 MW of solar generation.

NiSource Inc. serves approximately 3.3 million natural gas customers and 500,000 electric customers across its six-state footprint. The company's strategy emphasizes balancing reliability and resilience while transitioning its energy mix.

The offering of comprehensive energy management programs is quantified through Demand Side Management (DSM) projections for NIPSCO's 2024-2026 plan. The company is also using technology for internal efficiency, with AI work management intelligence delivering fuel productivity uplifts of over 20%.

The table below summarizes the projected customer participation for several NIPSCO DSM program categories for the 2024-2026 period:

Investment in advanced leak detection directly supports the methane reduction goal. NiSource reported a 48% reduction in fugitive methane emissions from gas main and service lines as of the end of 2023, keeping it on track to meet the target of a 50% reduction by 2025 from 2005 levels. To achieve this, as of the end of 2023, 27,275 miles of gas distribution pipe in five of six service territories were surveyed using advanced leak detection equipment. In 2022 alone, 15,230 miles of distribution pipe were surveyed using Picarro vehicles, and 265 miles of priority pipe were retired.

NiSource Inc. (NI) - Ansoff Matrix: Diversification

You're looking at how NiSource Inc. is moving beyond its core regulated utility business, which is a classic diversification play, especially with the new GenCo structure.

Execute the $7.0 billion GenCo capital investment for dedicated data center power generation.

NiSource Inc. announced a consolidated capital expenditure plan totaling $28.0 billion over the next five years, which includes approximately $7.0 billion specifically for data center investments through its subsidiary, GenCo. This investment is tied to an agreement that represents a $6 billion to $7 billion capital investment for infrastructure to power data center campuses, with a 15-year term and a fixed rate contract structure. The physical assets include the construction of two 1,300-megawatt combined-cycle, natural gas-fired turbines and 400 megawatts of battery storage capacity. Construction for these GenCo power projects is slated to begin in 2026 and is expected to wrap up by 2032. This non-regulated entity structure is designed to shield existing NIPSCO customers from the cost of this major capacity expansion, with company officials estimating the approach will save existing households roughly $1 billion over the life of the contract.

Establish a non-regulated subsidiary focused on utility-scale renewable project development outside the core service territory.

While the primary focus of the GenCo non-regulated subsidiary is data centers, NiSource's subsidiary NIPSCO has already brought online solar projects like Indiana Crossroads and Dunns Bridge I Solar, generating a combined 465 MW. The overall company goal is to retire all coal-fired generation by 2028 and reduce scope one greenhouse gas emissions by 90% by 2030, compared to 2005 levels. The base capital plan, which funds regulated growth, is $21.0 billion through 2030.

Offer specialized, non-regulated energy consulting services to large industrial clients on decarbonization.

The GenCo structure itself allows the subsidiary to negotiate power rates directly with developers without regulatory oversight, which is a specialized, non-regulated commercial approach for large-load customers. The expected overall return from GenCo investments is noted to be greater than NIPSCO's regulated rate of return.

Develop microgrid solutions for new, large-load customers, which is defintely a new market approach.

The development of dedicated power generation and battery storage for a single, investment-grade data center customer, as seen with the GenCo agreement, functions as a bespoke, large-scale microgrid solution for that load. The $7 billion GenCo CapEx is sufficient capital to support the announced customer's development through 2032, with a projected contribution of $0.25 to $0.45 in consolidated non-GAAP adjusted EPS by 2033.

Explore commercializing proprietary operational technology developed from the $28.0 billion capital program.

NiSource is investing in customer affordability through AI efficiency initiatives, with AI work management intelligence delivering sustained fuel productivity uplifts of over 20%. The total consolidated capital expenditure plan is $28.0 billion.

Here's a look at the key financial targets tied to the growth strategy: