September 29, 2020 Investor Day Exhibit 99.2
FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” within the meaning of federal securities laws. Investors and prospective investors should understand that many factors govern whether any forward-looking statement contained herein will be or can be realized. Any one of those factors could cause actual results to differ materially from those projected. These forward-looking statements include, but are not limited to, statements concerning our plans, strategies, objectives, expected performance, expenditures, recovery of expenditures through rates, stated on either a consolidated or segment basis, and any and all underlying assumptions and other statements that are other than statements of historical fact. All forward-looking statements are based on assumptions that management believes to be reasonable; however, there can be no assurance that actual results will not differ materially. Factors that could cause actual results to differ materially from the projections, forecasts, estimates and expectations discussed in this presentation include among other things, our debt obligations; any changes to our credit rating or the credit rating of certain of our subsidiaries; our ability to execute our growth strategy; changes in general economic, capital and commodity market conditions; pension funding obligations; economic regulation and the impact of regulatory rate reviews; our ability to obtain expected financial or regulatory outcomes; our ability to adapt to, and manage costs related to, advances in technology; any changes in our assumptions regarding the financial implications of the Greater Lawrence Incident; compliance with the agreements entered into with the U.S. Attorney’s Office to settle the U.S. Attorney’s Office’s investigation relating to the Greater Lawrence Incident; the pending sale of the Columbia of Massachusetts business, including the terms and closing conditions under the related Asset Purchase Agreement; potential incidents and other operating risks associated with our business; potential impacts from the COVID-19 pandemic; our ability to obtain sufficient insurance coverage and whether such coverage will protect us against significant losses; the outcome of legal and regulatory proceedings, investigations, incidents, claims and litigation; any damage to our reputation, including in connection with the Greater Lawrence Incident; compliance with applicable laws, regulations and tariffs; compliance with environmental laws and the costs of associated liabilities; fluctuations in demand from residential and commercial customers; economic conditions of certain industries; the success of NIPSCO’s electric generation strategy; the price of energy commodities and related transportation costs; the reliability of customers and suppliers to fulfill their payment and contractual obligations; potential impairments of goodwill or definite-lived intangible assets; changes in taxation and accounting principles; the impact of an aging infrastructure; the impact of climate change; potential cyber-attacks; construction risks and natural gas costs and supply risks; extreme weather conditions; the attraction and retention of a qualified workforce; the ability of our subsidiaries to generate cash; our ability to manage new initiatives and organizational changes; the performance of third-party suppliers and service providers; changes in the method for determining LIBOR and the potential replacement of the LIBOR benchmark interest rate; and other matters in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as updated in our Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 and in our subsequent SEC filings, many of such risks are beyond our control. In addition, the relative contributions to profitability by each business segment, and the assumptions underlying the forward-looking statements relating thereto, may change over time. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to, and expressly disclaim any such obligation to, update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events or changes to the future results over time or otherwise, except as required by law. Regulation G Disclosure Statement This presentation includes financial results and guidance for NiSource with respect to net operating earnings available to common shareholders, which is a non-GAAP financial measure as defined by the SEC’s Regulation G. The company includes this measure because management believes it permits investors to view the company’s performance using the same tools that management uses and to better evaluate the company’s ongoing business performance. With respect to such guidance, it should be noted that there will likely be a difference between this measure and its GAAP equivalent due to various factors, including, but not limited to, fluctuations in weather, the impact of asset sales and impairments, and other items included in GAAP results. NiSource is not able to estimate the impact of such factors on GAAP earnings and, as such, is not providing earnings guidance on a GAAP basis.
AGENDA 6 CLOSING Joe Hamrock 3 OPERATIONS & SAFETY FOCUS Pablo Vegas 5 FINANCIAL OVERVIEW Donald Brown WELCOME Randy Hulen 1 STRATEGIC OVERVIEW Joe Hamrock 2 GENERATION TRANSITION Shawn Anderson 4 Q&A 7
Joe Hamrock President, Chief Executive Officer & Director, NiSource Strategic Overview
PREMIER REGULATED UTILITY BUSINESS ELECTRIC NATURAL GAS COLUMBIA GAS OF KENTUCKY COLUMBIA GAS OF OHIO COLUMBIA GAS OF PENNSYLVANIA COLUMBIA GAS OF VIRGINIA COLUMBIA GAS OF MARYLAND NIPSCO GAS NIPSCO ELECTRIC * Estimated total shareholder return at a constant P/E ratio Note: Structure is post sale of Columbia Gas of Massachusetts, which is expected to close in October 2020 Significant Scale across Six States ~3.2M Gas Customers ~500K Electric Customers 10%–12% Compelling expected annual total shareholder return proposition 2021-2024* NI LISTED NYSE NIPSCO
6 THE U.S. REGULATED UTILITY INVESTMENT OF CHOICE Safety and environmental leadership will continue to drive customer value and sustainable growth 100% regulated revenue expected to deliver consistent and predictable earnings growth Expected 7%-9% NOEPS3 CAGR 2021-2024 Dividend growth to maintain targeted 60%-70% payout ratio Balanced financing plan focused on maintaining current investment grade credit ratings and maximizing NOEPS growth Committed to Shareholder Value Strong Foundation Clear Path to Drive Incremental Growth 12020E excludes CMA; 2Compared to 2005 baseline; 3Net Operating Earnings Per Share (Non-GAAP) Regulatory diversity resulting from multiple jurisdictions provides stability Significant scale, with ~$14B of regulated electric and gas rate base1 Proximity to abundant, low-cost natural gas resources supports ongoing rate affordability Investments and recovery supported by favorable energy policies and constructive regulatory environments Benefiting Customers and Communities Enhanced ~$40B infrastructure investment opportunity set driving long-term growth Increase of ~$10B from prior expectation Well-established capital investment programs with track record of recovery through regulatory trackers Driving 10%-12% expected rate base CAGR 2021-2024 Accelerated and enhanced implementation of Safety Management System (SMS) Generation investments to save customers $4B over 30 years and reduce GHG 90% by 20302 Investments and focus on organizational efficiency to drive continued customer affordability Gas safety and modernization investments advancing environmental benefits
7 commitment to safety and A sustainable strategy for all stakeholders Realigned executive leadership and integrated key operations functions across the organization Accelerated implementation of our Safety Management System (SMS) Advancing renewable portfolio with first phase of wind projects expected to be in service by Q4 2020 Enhanced oversight and guidance on the Quality Review Board and NiSource Board of Directors Pending sale of Columbia Gas of Massachusetts Significant ongoing process 2019 2020 March Secretary Ray LaHood Named Chair of Quality Review Board April Successful financing transactions May Realignment of Leadership team March Lloyd Yates, former EVP at Duke Energy added to the NiSource Board Acceleration of Safety Management System (SMS) implementation began February Announced sale of CMA October Expected closing of CMA sale June Deborah Hersman, former Chair of NTSB added to the NiSource Board August Implementation of VSP as part of larger NiSource Next initiative April Kevin T. Kabat elected Board Chairman August Regulatory approval of milestone renewable project (Rosewater) Q4 Anticipated CPCN filings for solar projects
Joe Hamrock President & CEO Pablo Vegas EVP/COO & President, NiSource Utilities Donald Brown EVP/CFO & President, NiSource Corporate Services Violet Sistovaris EVP & Chief Experience Officer Carrie Hightman EVP/CLO, & CEO & President, Columbia Gas of Massachusetts Shawn Anderson Chief Strategy & Risk Officer Chuck Shafer Chief Safety Officer 8 focused EXECUTIVE LEADERSHIP TEAM Balanced senior roles and responsibilities support the execution of our long-term strategic priorities Leadership enhancements further advance NiSource’s focus on safety, service and value
9 Skilled and Independent Board of Directors* Diversity of Board experience and expertise is well-aligned with NiSource strategy * All directors independent other than Joe Hamrock (CEO) Deborah A. Henretta Age: 59 Elected: 2015 Occupation: Partner G100 Companies Wayne S. DeVeydt Age: 50 Elected: 2016 Occupation: Executive Chair of Surgery Partners, Inc. Joe Hamrock Age: 57 Elected: 2015 Occupation: Pres. & CEO, NiSource Inc. Deborah A. P. Hersman Age: 50 Elected: 2019 Occupation: Consultant Waymo, LLC Eric I. Butler Age: 60 Elected: 2017 Occupation: Pres. & CEO, Aswani-Butler Associates Theodore H. Bunting Jr. Age: 61 Elected: 2018 Occupation: Retired Group Pres., Entergy Corp. Peter J. Altabef Age: 61 Elected: 2017 Occupation: Chairman & CEO, Unisys Corp. Aristides S. Candris Age: 69 Elected: 2012 Occupation: Retired Pres. & CEO, Westinghouse Carolyn Y. Woo Age: 66 Elected: 1998 Occupation: Retired Pres. & CEO, Catholic Relief Services Kevin T. Kabat Age: 63 Elected: 2015 Occupation: Independent Chairman of the Board, NiSource Inc.; Retired CEO of Fifth Third Bancorp Michael E. Jesanis Age: 63 Elected: 2008 Occupation: Retired Pres. & CEO National Grid USA Lloyd M. Yates Age: 59 Elected: 2020 Occupation: Retired EVP, Duke Energy
capital plan resulting in Expected lasting value creation 10 ~$9.9B – $10.5B of Identified Investment Opportunities 10% to 12% Expected rate base CAGR 2021–2024 7% to 9% Expected NOEPS1 CAGR 2021–2024 2021–2024 1Net Operating Earnings Per Share (Non-GAAP)
11 ACCELERATING OUR PATH FORWARD Leveraging our platform through a dedicated investment approach and relentless commitment to safety Enhanced System Safety Customer Affordability and Increased Customer Satisfaction Improved Earnings Power Sustainable Value Creation over Long-Term Horizon Asset Modernization Generation Transition Cost-Structure Improvements SMS Implementation Enhanced Capabilities
Pablo Vegas EVP/COO & President, NiSource Utilities Operations & Safety Focus
13 NISOURCE OPERATIONS OVERVIEW Energizing the lives of nearly four million customers 1Based on 2020E operations post the sale of Columbia Gas of Massachusetts, which is expected to close in October 2020 ~3.2MM Gas Customers1 ~500K Electric Customers $8.1B-$8.5B Planned Safety & Modernization Investments 2021-2024 ~$9.0B Gas Rate Base1 ~$5.0B Electric Rate Base $1.8B-$2.0B Planned Renewable Generation Investments 2021-2023 Investments supported by favorable energy policies and regulatory frameworks SMS enhancing safety culture NiSource Next driving business transformation Gas and electric safety & asset modernization investments Planned renewable generation investments through 2023 with longer-term opportunities thereafter Focus on customer safety, reliability and affordability
14 CONTINUED INVESTMENT SUPPORTED BY REGULATORY FRAMEWORK A significant part of our investment portfolio is preplanned, repeatable and tracked for recovery annually Investment plan supported by established recovery mechanisms in all states that emphasize long-term rate affordability (targets annual rate impacts in the low-to-mid single digits) $1.9 - $2.2B Expected Annual Investment ~$0.7 - $0.8B ~$1.9 - $2.0B ~$5.5 - $5.7B
SMS ENHANCING SAFETY CULTURE (VIDEO)
Unwavering Commitment to Safety Leadership Achievable Annualized Run Rate Savings Targets Seamless Customer Service Using Digital Capabilities Standard Operations Management Supported by Modern Technology for Improved Speed and Reliability Customer Trust and Investor Confidence Flatter Organization, Stronger Teams, Empowered Leaders & Upskilled Employees 16 NISOURCE NEXT TRANSFORMATION NISOURCE NEXT enhancing our ability to achieve consistent, stable growth, while fostering a culture of leadership, innovation and commitment to continuous improvement by everyone within our organization
17 NATURAL GAS OPERATIONAL HIGHLIGHTS Significant annual capital investment in natural gas safety and asset modernization programs planned through 2024 SMS continues to prioritize investment opportunities focused on system, public and employee safety improvement and risk reduction Safely and sustainably operating in the communities we serve continues to be our highest priority Excess flow & automatic shutoff valves Pipeline over pressurization protection Picarro advanced leak detection Inline pipeline inspection upgrades Bare steel & cast iron pipe replacement 50% Reduction in methane emissions from natural gas pipelines by 20251 Gas Prioritized Investments Projected Environmental Benefits 1Compared to 2005 baseline
Delivering customer benefits, improving system reliability and embracing the need for affordable clean energy are driving growth in our electric business $400-$600 million of planned annual capital investment in base electric system infrastructure and asset modernization programs planned through 2024 Incremental $1.8-$2.0 billion in planned generation investment opportunities through 2023 Well-established and supported plan for electric generation enhances sustainability and diversification of business profile Replacing approximately 1,400 megawatts of retiring coal-fired generation at Schahfer by 2023 Incremental opportunities beyond 2024 supporting planned Michigan City plant retirement Rate structure supports competitiveness of energy-intense industrial customers and reduces associated risks ELECTRIC BUSINESS OPERATIONAL HIGHLIGHTS 18
Operational safety and risk management systems driving technology investments to improve the customer experience “Know Your Home” campaign launched to better educate customers on their gas infrastructure Improved operational efficiency enabling us to become leaner and more efficient while providing more value for customers Introduced new payment platforms (PayPal, Venmo) to make bill payment easier Continuing payment assistance programs to help customers mitigate COVID-19 IMPROVING CUSTOMER EXPERIENCE, SATISFACTION AND AFFORDABILITY 19 We are elevating our capabilities to better engage with our customers, with a strong ongoing focus on maintaining competitive and affordable rates “Our customers are at the center of our business …”
Shawn Anderson Chief Strategy & Risk Officer, NiSource Generation Transition Strategy
GENERATION Transition Strategy FOUNDATIONS The IRP Process The Integrated Resource Plan (IRP) outlines NIPSCO long-term plans to supply electricity to customers IRP is required of all electric utilities in Indiana Takes into account interests of customers, employees, environment and local economy Process includes extensive analysis across a range of generation scenarios Broad stakeholder engagement is supported throughout process Charting the long-term course for transitioning our generation portfolio Process leads to generation replacement investment opportunities Key IRP Planning Considerations 21 Reliable Flexible Diverse Affordable Compliant
11K jobs during construction and $2B in economic activity GHG emissions to be reduced 90% by 20301 ~$4B in customer savings over 30 years $1.8B–$2B of planned investment opportunities through 2023 Generation transition outcomes Replacing 80% of coal capacity by 2023 with primarily renewable resources; retiring all coal generation by 2028 1Compared to 2005 baseline 22 Estimated Impact from Generation Transition Plan
Driving CUSTOMER AND Community benefits 23 $105 in average annual savings per household2 Renewable investments expected to benefit Indiana’s economy Renewable generation infrastructure estimated to be $5B-$6B by 20233 ~11k in direct FTEs created during project construction ~$2.3B of contribution to Indiana economic output (Gross State Product) Significant reinvestment in local tax base $4 billion in savings over 30 years Illustrative Annual Cost to Customer1 1Reflects renewable investments through 2023 and potential considerations for Michigan City replacement 2Based on average of 2013 – 2019 fuel costs 3Includes JVs and PPAs $ Million
DRIVING ENVIRONMENTAL BENEFITS 24 Reduction 2005 to 2019 Reduction 2005 to 2030E Nitrogen Oxides (tons) 84% ~100% Sulfur Dioxide (tons) 97% ~100% Mercury (pounds) 94% 99% Water Withdrawal (millions gallons) 89% 99% Water Discharge (millions gallons) 93% 99% Coal Ash Generated (tons) 52% 100% Cleaner generation mix significantly reducing GHG emissions Driving down other environmental impacts related to coal Greenhouse Gas Reductions from 2005 Levels 48% By 2019 90% By 2030E
25 $1.8 - $2.0 billion in Planned Investments through 2023 Tax equity partnerships allow for significant reduction in cost to customers and efficient timing of capital deployment Mix of JVs and PPAs Drives Customer Benefits and Shareholder Value ~$1.0B Tax Equity Investment ~$1.4 - $1.6B Projects in Negotiation ~50% NiSource (NIPSCO) JV ~50% Purchase Power Agreements (PPA) ~$1.8 - $2.0B NiSource Investment ~$0.4B Approved Projects PPAs Submitted to IURC: Jordan Creek (NextEra) Greensboro (NextEra) Brickyard (NextEra) ~$2.8 -$3.0B Expected NiSource (NIPSCO) JV Ownership ~$1.8 - $2.0B JVs Submitted to IURC: Rosewater (EDPR) Indiana Crossroads (EDPR)
Robust Renewable INVESTMENTS in Indiana Jordan Creek Wind PPA: 400 Rosewater Wind JV: 100 IN Crossroads Wind JV: 300 Brickyard Solar PPA: 200 Greensboro Solar + Storage PPA: 100 + 30 All values in MW ICAP JV Project PPA Project Project Structure NIPSCO Investment ($M) In Service Status Executed Projects: Rosewater Wind (EDPR) JV ~$100 ’20 Under Construction Jordan Creek Wind (NextEra) PPA N/A ’20 Under Construction Indiana Crossroads Wind (EDPR) JV ~$300 ’21 Under Construction Brickyard Solar (NextEra) PPA N/A ‘22 Pending Approval Greensboro Solar + Storage (NextEra) PPA N/A ‘22 Pending Approval In Process Projects: Solar (+ Storage) Projects1 JV ~$1,400 – $1,600 ’22–’23 Advanced Commercial Negotiations Solar & Wind Projects PPA N/A ‘23 Advanced Commercial Negotiations Total $1,800 – $2,000 1Includes transmission projects included in IRP which will be fully owned by NIPSCO 26 Renewable Projects in Execution
27 ANNOUNCED RENEWABLE PROJECT UPDATES All renewable projects are on time and on budget Executed Agreement Regulatory Approval Under Construction In Service 2020E In Rate Base 2023E Brickyard Solar Capacity: 200 MW Greensboro Solar Capacity: 130 MW Jordan Creek Capacity: 400 MW Indiana Crossroads Capacity: 300 MW Rosewater Capacity: 100 MW Executed Agreement Regulatory Approval Under Construction In Service 2020E Recovered through Fuel Cost Mechanism Executed Agreement Regulatory Approval Under Construction In Service 2022E Recovered through Fuel Cost Mechanism Executed Agreement Regulatory Approval Under Construction In Service 2022E Recovered through Fuel Cost Mechanism Executed Agreement Regulatory Approval Under Construction In Service 2021E In Rate Base 2023E Build Transfer Agreement (JV) Purchase Power Agreement Approximately eight to ten additional projects in advanced commercial negotiations Milestone Achieved Initial Wind Projects Solar Projects
28 CASE STUDY: ROSEWATER WIND JOINT VENTURE Tax Equity Structure Tax equity partner (Wells Fargo) funding ~55% of $170M project cost with an estimated flip date of 2030 2019 Commercial Agreement Reached January 2019 Filed CPCN February 2019 Regulatory Approval Received August 2019 2020 Closed Tax Equity Financing July 2020 Expected In-Service 4Q 2020 2023 Developer Buy-Out Addition to rate base 2018 Engineering/Design Completed Board Approval Expected Rate Base Contribution ~$90M rate base investment (includes developer carry) to be paid in 2023 Will be recovered through base rate case Project Profile 100 MW wind project in White County 20 Vestas V136 3.6 MW wind turbines 5 Vestas V150 4.2 MW wind turbines Substation and transmission lines
29 Well-Positioned 2023 Rate Case 2018 Rate Case set the foundation for execution of the replacement transition Resolved federal tax reform benefits being passed back to customers Approved changes to depreciation and amortization schedules related to early retirements of coal-fired generation as submitted in the IRP (coal-fired generation to be fully depreciated by 2032) Implemented new rate structure and service flexibility for large industrial customers that provide planning certainty for future capacity needs 2023 rate case is expected to transfer CPCN approved renewable investments into rate base (2H/2023) “Locking in” long-term customer, community and environmental benefits Rate Case planned to add renewable assets to NIPSCO rate base and immediately start passing savings to customers and returns to investors 1 Return on and of Investment Taxes Fixed Costs Fuel and Other Variable Costs Trade Fuel Cost for Renewable Capex While keeping cost to customer relatively flat or lower Illustrative Future Revenue Requirement* Current Revenue Requirement 2024 Revenue Requirement *NIPSCO Generation Only Significant reduction of annual maintenance and fuel costs provides long-term rate benefits to customers 2
30 NIPSCO’S RENEWABLE-FOCUSED FUTURE SUPPLY MIX The 2018 NIPSCO IRP outlines the path to retire 100% of coal assets by 2028 …with replacement capacity pointing primarily to solar resources 2020 2023E1 2028E2 Incremental generation opportunities beyond 2023 will be shaped by future IRPs 1Retirement of Schahfer Units 14/15/17/18; 2Retirement of Michigan City Unit 12; 3Other includes DSM $1.8-$2.0B Investment Opportunity Incremental Replacement Opportunity Coal Natural Gas Renewables Other3
RENEWABLE PROJECT (VIDEO)
Donald Brown EVP/CFO & President, NiSource Corporate Services Financial Overview
33 Strong Financial Foundation for Value Creation Expected Value Creation Utility Rate Base CAGR of 10%–12% over 2021–2024 NOEPS2 CAGR of 7%–9% over 2021–2024 5%–7% Near-Term Annual Growth (2021-2023) Annual Dividend Growth Targeting 60%–70% Payout Ratio Commitment to Strengthening the Balance Sheet and Maintaining Current Investment Grade Credit Ratings Customer Value Advantage Enhanced by Sustainable Plan 1Operations are post sale of Columbia Gas of Massachusetts which is expected to close in October 2020; 2Net Operating Earnings Per Share (Non-GAAP) Strong Financial Foundation 100% Regulated and Stable Revenue Stream Diversified Footprint with Utility Businesses across Six Jurisdictions1 Focused Business Strategy Highlighted by Significant Investment Opportunities $1.9B - $2.2B of Planned Annual Growth, Safety & Modernization investments through 2024 $1.8B - $2.0B of Planned Renewable Generation investments primarily across 2022 and 2023 Solid Liquidity with No Major Debt Maturities through the Planning Horizon Driving
34 Diversified Business Mix1 Stable Revenue Profile Balanced Business Mix Financial strength driven by strong regulatory constructs and balanced portfolio mix Diversified Revenue Mix 1Data based on 2019 fiscal year results and excludes CMA. Operating Earnings Retail Margins by Customer Class Rate Design (Margin)
NiSource Next initiatives and CMA sale projected to drive an ~8% reduction in O&M costs in 2021E from 2020E NiSource next Cost and capability enhancements 35 Cost efforts intended to drive enhanced focus on safety, renewable energy, operational excellence and customer value Relatively Flat Annual O&M (2021-2024) Cost Initiatives Under Way Voluntary Separation Program savings Improvements identified Streamlined organizational structure Evolved business services Work standardization Greater field mobility Connected customer experience Modernization-driven fuel and cost reductions Offset to future inflationary pressure
36 2021-2024 Capital Forecast Investment opportunities expected to enhance system safety and reliability while driving shareholder value Expected Growth, Safety & Modernization Investments of $8.1 - $8.5B ($1.9 - $2.2B Annually) Expected Renewable Generation Investments of $1.8 - $2.0B Expected Investment Recovery Period More than 75% of Growth, Safety & Modernization Investments begin earning in less than 18 months
37 Capital Investment Driving Robust Rate Base Growth Planned Growth, Safety & Modernization and Renewable investments expected to drive robust rate base growth Rate base growth balanced across jurisdictions and between gas and electric businesses CAGR of 10% - 12% 12020E rate base is post sale of Columbia Gas of Massachusetts which is expected to close in October 2020
7% – 9% expected CAGR 2021-2024 $1.28 to $1.36 38 Robust Capital Investment DRIVing NOEPS growth Long-term ~$40B investment opportunity expected to drive continued NOEPS growth beyond 2024 Dividend Dividend growth to maintain targeted 60%–70% long-term payout ratio2 Annual NOEPS1 ($/share) Near-Term Annual Growth Rate 5%-7% (2021-2023) 1Net Operating Earnings Per Share (Non-GAAP) 2Subject to board approval
39 2021E – 2024E Financing Strategy1 Financing strategy targets long-term Adj. FFO2/total debt of ~14%-15% Current Financing Plan … All financing is included on our long-term growth commitments Reflects our focus on maintaining current investment grade credit rating Targets renewable investment financing (60% Equity / 40% Debt) Doesn’t include potential portfolio optimization opportunities ($ millions) 2021E 2022E 2023E 2024E Planned Annual Safety & Modernization Investments Equity ATM (At-the-Market) $200 - $300 Annually ESPP/401K/Other $30 - $50 Annually Long-Term Debt Incremental Long-Term Debt $500 - $700 Annually Planned Renewable Generation Investments (Targeting 60% Equity) Equity Common Equity Block $500 - $700 Total Long-Term Debt Incremental Long-Term Debt $500 - $700 Total Other Financing Hybrids, Convertibles, etc. $600 - $1,000 Total 1Current financing plan may change based on business developments 2Adjusted funds from operations (FFO); represents Net Income adjusted for depreciation and amortization, loss on early extinguishment of debt and deferred taxes
40 Key Balance Sheet Metrics Well positioned to maintain current investment grade credit ratings September 30, 2020 (Estimated) Total Long-Term Debt (LTD) $9.1B Weighted Average Rate (LTD) 3.68% Weighted Average Maturity (LTD) 15.5 Years Credit Ratings Baa2 / BBB+ / BBB Available Liquidity1 $1.5B - $1.6B No significant refinancing needs through 2024 1Defined as cash plus available credit facility capacity.
Joe Hamrock President, Chief Executive Officer and Director, NiSource Closing
42 our sustainable approach to ESG 1Compared to 2005 baseline Environmental $1.8B-$2.0B of planned renewable investments through 2023 Expected to retire 100% of coal assets by 2028 and replace primarily with renewables Driving toward 90% reduction1 in greenhouse gas emissions by 2030 Social Transformation focused on customer safety and reliability Economically benefiting customers and communities Committed to engagement, diversity and inclusion from the boardroom through the organization and supplier network Governance Leadership enhancements support commitment to customer service and safety Diverse, skilled and independent Board recently refreshed Robust framework for strategy, risk management and oversight
43 ACCELERATING OUR PATH FORWARD Leveraging our platform through a dedicated investment approach and relentless commitment to safety Enhanced System Safety Customer Affordability and Increased Customer Satisfaction Improved Earnings Power Sustainable Value Creation over Long-Term Horizon Asset Modernization Generation Transition Cost-Structure Improvements SMS Implementation Enhanced Capabilities
Appendix
Business Profile Largest LDC in Ohio (~1.5M customers) ~ 20,200 miles of pipe ~ 2,000 miles of bare steel and cast iron ~ $3.2B rate base Customer Focus Nationally recognized energy efficiency programs Positive trending customer satisfaction Rate Design Straight fixed variable rate design (fully fixed residential distribution rate) Bad debt tracked with full recovery Several other O&M trackers Economic Outlook / Customer Growth Stable economic environment with modest customer growth Energy is central to state economy Constructive Legislation House Bill 95 Utility modernization capital programs authorized House Bill 319 Infrastructure cost recovery for up to $25.5M annually for economic development projects Senate Bill 378 Underground protection and enforcement Regulatory Environment and Growth Strategy Fully tracked annual Infrastructure Replacement Program (IRP) and Capital Expenditure Program (CEP) Ability to defer costs associated with non-tracked investments Public policy provides tools supporting investment for economic development and deferral of pipeline safety costs COLUMBIA GAS OF OHIO 46 Anticipated Modernization Investment Summary Total Investment Opportunities ~$10.6B Annual Program Investment Range $540M - $560M Regulatory Treatment Tracked Tracker Filing Period Historical – 12 months Tracker Filing Date February Recovery Begins May (IRP Rider), Sept. (CEP Rider) Weighted Avg Regulatory Lag < 12 Months Authorized Program ROE 10.39%
Business Profile Third-Largest LDC in PA (~437K customers) ~ 7,600 miles of pipe ~ 1,200 miles of bare steel and cast iron ~ $1.9B rate base Customer Focus State leader in universal services, low-income initiatives, choice and energy efficiency programs Rate Design ~ 27% of residential distribution rate fixed (assuming average customer usage) Weather normalization adjustment for residential customers stabilizes revenue Economic Outlook / Customer Growth Stable economic environment Tariff program allows for modest customer growth Constructive Legislation Act 11 Allows a gas utility to file a Distribution Service Improvement Charge (DSIC) and rate case with fully forecasted rate year No limits for rate cases; DSIC increase limited to 5% of billed revenue Regulatory Environment and Growth Strategy Recovery of infrastructure and other costs through base rate filings using a fully projected future test year Tariff supports system expansion by providing limited main and service extensions at cost to customers COLUMBIA GAS OF PENNSYLVANIA 47 Anticipated Modernization Investment Summary Total Investment Opportunities ~$4.1B Annual Program Investment Range $275M - $340M Regulatory Treatment Base Rate Case Test Year Fully Projected Future Test – 12 months Filing Date 1Q Recovery Begins Typically within 9 months of filing Weighted Avg Regulatory Lag None Authorized ROE Not Specified
Business Profile Largest LDC in Indiana (~839K customers) ~ 17,500 miles of pipe ~ 23 miles of bare steel ~ $1.7B rate base Customer Focus Lowest-cost gas provider in Indiana over the last 10 years Fewest customer complaints in Indiana in the last five years Continued rise in J.D. Power customer satisfaction survey Rate Design ~ 50% of residential distribution rate fixed Low income program fully tracked Energy efficiency tracker Economic Outlook / Customer Growth Typically stable economic environment. NIPSCO continues to work with customers impacted by the pandemic with extended payment plans. Favorable regulatory treatment related to bad debt expense Customer-growth potential through rural extension opportunities Constructive Legislation Senate Bill 560 Use of forward test year, timely rate cases, infrastructure investment tracking, rural expansion for natural gas House Bill 1470 Provides for flexibility for TDSIC plan length from 5 to 7 years, permits IURC to authorize multi-unit projects without specific numbers and locations, terminating a plan prior to expiration with ability to continue TDSIC treatment, and to allow companies to seek a new TDSIC plan. Rate case required during term of each TDSIC plan 2% revenue cap applies to aggregate of TDSIC plans Regulatory Environment and Growth Strategy Six-year, $949M Infrastructure Modernization Program with semi-annual tracker filings Four-year $93M capital and $32M expense amounts for the Pipeline Safety Compliance Plan; and five-year $223M capital amount for the PHMSA Compliance Plan in the Federally Mandated Program with semi-annual tracker filings Regulatory construct encourages gas system expansion into rural areas NIPSCO GAS (INDIANA) 48 Anticipated Modernization Investment Summary Total Investment Opportunities ~ $5.0B Annual Program Investment Range TDSIC: $150M - $200M; FMCA $3M - $43M Regulatory Treatment Tracked Tracker Filing Period Historical – Prior 6 Months Tracker Filing Cadence TDSIC Feb. and Aug; FMCA May and Nov Recovery Begins TDSIC Jul and Jan; FMCA Apr and Oct Weighted Avg Regulatory Lag < 12 Months Authorized Program ROE 9.85%
Business Profile Third-Largest LDC in VA (~274K customers) ~ 5,300 miles of pipe ~ 140 miles of bare steel ~ $850M rate base Customer Focus Broad residential, commercial and industrial portfolio Industry-leading third-party damage rate Top-tier J.D. Power customer satisfaction scores Rate Design ~ 38% of residential distribution rate fixed Revenue normalization adjustments provides full residential distribution revenue recovery Energy conservation tracker Economic Outlook / Customer Growth Stable economic environment Customer growth opportunities through system expansion Initiatives in place to promote customer conversions and growth Year-over-year customer growth of 1.5%–2.0% Constructive Legislation DIMP Act - Allows deferral of incremental O&M costs related to pipeline safety SAVE Act - Allows recovery of investment on infrastructure replacement CARE Act - Provides for energy efficiency programs and a decoupling adjustment NEED Act - Allows deferral of infrastructure expansion costs and recovery of costs associated with upstream natural gas supply infrastructure MAIN Act - Provides cost recovery for infrastructure expansion into unserved certificated areas Regulatory Environment and Growth Strategy Forward-looking annual modernization / safety infrastructure investment tracker filings Tracker filings supplemented by rate case filings with forward test year Multi-Family program provides incentives for multi-family building development COLUMBIA GAS OF VIRGINIA 49 Anticipated Modernization Investment Summary Total Investment Opportunities ~ $500M Annual Program Investment Range $45M - $70M Regulatory Treatment Tracked Tracker Filing Period Forward – 12 months Tracker Filing Date August Recovery Begins January Weighted Avg Regulatory Lag None Authorized Program ROE 9.70%
Business Profile Second-Largest Gas-Only LDC in KY (~137K customers) ~ 2,600 miles of pipe ~ 350 miles of bare steel and cast iron ~ $327M rate base Customer Focus Top-tier customer satisfaction levels Rate Design ~ 52% of residential distribution rate fixed Weather normalization adjustment for residential and commercial customers stabilizes revenue Economic Outlook / Customer Growth Stable economic environment with improving customer growth rates Constructive Legislation House Bill 100 Governments may create and assess for special energy efficiency project districts Regulatory Environment and Growth Strategy Safety Modification Replacement Program Allows for full recovery of eligible pipeline replacement program costs not recovered in existing rates via a rider that permits the use of a forward-looking test year and is reconciled Expanded to include recovery of eligible safety related initiatives beginning in November 2019 There is no stated recovery limit on the tracker PSC has authorized economic development extension tariff for high potential sites that require natural gas infrastructure Annual modernization / safety infrastructure investment tracker filings Tracker filings supplemented by rate case filings with forward-looking test year COLUMBIA GAS OF KENTUCKY 50 Anticipated Modernization Investment Summary Total Investment Opportunities ~ $900M Annual Program Investment Range $40M - $50M Regulatory Treatment Tracked Test Year Forward – 12 months Tracker Filing Date October Recovery Begins January Weighted Avg Regulatory Lag None Authorized Program ROE 9.50%
Business Profile Complementary to PA operations (~34K customers) ~ 650 miles of pipe ~ 51 miles of bare steel & cast iron ~ $149M rate base Customer Focus Sustained industry-leading employee and system safety performance Rate Design Revenue normalization adjustment provides full residential distribution revenue recovery Energy efficiency tracker Economic Outlook / Customer Growth Stable economic environment with modest customer growth Tariff provisions allow for modest customer growth Constructive Legislation STRIDE Prospective cost recovery for age and condition investment The surcharge cannot exceed $2 per month on each residential bill Regulatory Environment and Growth Strategy Forward-looking annual Infrastructure Replacement and Improvement Surcharge (IRIS) recovers age and condition investment IRIS filings supplemented by periodic rate cases Commission evaluating alternative rate designs COLUMBIA GAS OF MARYLAND 51 Anticipated Modernization Investment Summary Total Investment Opportunities ~ $230M Annual Program Investment Range $25M - $35M Regulatory Treatment Tracked Tracker Filing Period Forward – 12 Months Tracker Filing Date November Recovery Begins January Weighted Avg Regulatory Lag < 12 Months Authorized Program ROE 9.60%
Business Profile Third-largest electric utility in Indiana (~ 475K customers) Fully integrated electric utility ~ 3,000 MW of environmentally compliant generation ~10,000 distribution line miles ~ 3,000 transmission line miles ~ $4.7B rate base Customer Focus Fewest customer complaints in Indiana in the last five years Rates are below the national average Continued rise in J.D. Power customer satisfaction survey Rate Design 100% fuel costs pass-through Industrial customers ~ 40% demand charge weighted Economic Outlook Challenging economic environment whereby NIPSCO is working with customers struggling due to the pandemic on extended payment plans and changes in energy demand Constructive Legislation Senate Bill 560 Use of forward-looking test year, timely rate cases, and infrastructure investment tracking Rate case required within seven years of original TDSIC filing Rider cannot increase customer rates more than 2% of prior 12 months’ revenues House Bill 1470 Allows more flexibility for TDSIC plans by allowing projects that may rely on future inspections or details not available at the time the plan is first filed Regulatory Environment and Growth Strategy Your Energy Your Future generation transition plan to retire nearly 80% of our coal-fired generating units by 2023, and all of them by 2028, replacing them with lower-cost, cleaner energy sources, including wind and solar Seven-Year, ~ $1.25B transmission and distribution infrastructure modernization program with semi-annual tracker filings INDIANA ELECTRIC (NIPSCO) 52 Anticipated Modernization Investment Summary Total Investment Opportunities ~ $5B Annual Program Investment Range $170M - $230M Regulatory Treatment Modernization and Environmental Projects Tracked Authorized ROE 9.75% Customer Mix (Net Revenue) Steel-related customers represent ~10% of net revenues Variable ~60% ~40% Demand 67% Residential & Commercial