NiSource announced a 20-year agreement with Microsoft that is expected to save customers $1.75 billion over that term.

Microsoft is building a new $1 billion data center complex in La Porte. Microsoft expects the first and second buildings to be complete by spring 2029, and the third by winter 2029.

“Microsoft has always been committed to paying our own way and identifying long-term solutions like this one to ensure that our data centers don't increase electricity prices for other ratepayers,” said Jeff Riles, senior director of energy markets for Microsoft, in a press release. “Our partnership with NIPSCO will not only support continued growth and protect ratepayers but also help to support a reliable grid for years to come that the communities of Northern Indiana rely on.”

The NiSource Generation Co. was created to mitigate the financial risks for customers when companies require large amounts of energy. Microsoft will fund the generation, transmission and infrastructure of the energy it needs for the data center. The agreement is expected to generate about 1,100 megawatts of added power to the grid, starting in 2028.

“Our priority remains clear: protect existing customers, support safe and reliable service, and ensure that new growth contributes tangible benefits to the communities we serve,” said NiSource President and CEO Lloyd Yates. “When structured correctly, economic development can be part of the affordability solution.”

That deal is expected to save customers $140 a year.

“Affordability is not separate from economic development; it is a key pillar of our GenCo model,” Yates said.

The agreement includes a 600-mw battery storage facility, which will increase GenCo's power assets. It will seve several large-load customers.

NiSource will offer further information during its third quarter earnings call on Oct. 28.