NISOURCE INC.

Financial and operational data for the NIPSCO Operations segment, which services both gas and electric customers, for the three and nine months ended September 30, 2025 and 2024 are presented below.

Comparability of operation and maintenance expenses and depreciation and amortization may be impacted by regulatory and depreciation trackers that allow for the recovery in rates of certain costs.

The underlying reasons for changes in our operating revenues for the three and nine months ended September 30, 2025 compared to the same period in 2024 are presented below.

Weather

The results of operations for the NIPSCO Operations segment include income from both electric and gas service lines. In general, we calculate the weather-related revenue variance based on changing customer demand driven by weather variance from normal cooling degree days and normal heating degree days, net of NIPSCO Gas' weather normalization mechanism. Our composite cooling and heating degree days reported do not directly correlate to the weather-related dollar impact on the results of NIPSCO Operations. Cooling and heating degree days experienced during different times of the year or in different operating locations may have more or less impact on volume and dollars depending on when they occur. When the detailed results are combined for reporting, there may be weather-related dollar impacts on operations when there is not an apparent or significant change in our aggregated composite cooling and heating degree day comparison.

Sales

The increase in total volumes sold to electric customers for the three months ended September 30, 2025 compared to the same period in 2024 was primarily attributable to increased residential and industrial usage, partially offset by decreased commercial usage. The increase in total volumes sold to electric customers for the nine months ended September 30, 2025 compared to the same period in 2024 was primarily attributable to increased industrial and residential usage due to colder weather and increased customer count, partially offset by decreased commercial and wholesale and other usage

The increase in total volumes sold to gas customers for the three months ended September 30, 2025 compared to the same period in 2024 was primarily attributable to increased usage by industrial customers. The increase in total volumes sold to gas customers for the nine months ended September 30, 2025 compared to the same period in 2024 was primarily attributable to increased usage by industrial and commercial customers, as well as increased residential usage due to colder weather.

Commodity Price Impact

Cost of energy for the NIPSCO Operations segment's electric activities is principally comprised of the cost of coal, natural gas purchased for internal generation of electricity, transportation of coal and natural gas, and the cost of power purchased from generators of electricity for its generation and transmission activities. For its gas distribution activities, NIPSCO Operations' cost of energy is principally comprised of the cost of natural gas procured on behalf of and sold to customers while providing transportation and distribution services. NIPSCO Operations has state-approved recovery mechanisms that provide a means for full recovery of prudently incurred costs of energy. The majority of these costs of energy are passed through directly to the customer, and the costs of energy included in operating revenues are matched with the cost of energy expense recorded in the period. Any difference in actual costs incurred and amounts billed to customers is recorded on the Condensed Consolidated Balance Sheets (unaudited) as under-recovered or over-recovered fuel and gas costs to be included in future customer billings. Therefore, increases in these tracked operating expenses are offset by increases in operating revenues and have essentially no impact on net income.

The underlying reasons for changes in our operating expenses for the three and nine months ended September 30, 2025 compared to the same period in 2024 are presented below.

Electric Supply and Generation Transition

NIPSCO continues to execute on an electric generation transition consistent with the 2018 Plan and 2021 Plan and maintained in the 2024 Plan. The 2024 Plan outlines the path to retire the remaining two coal units at R.M. Schahfer by the end of 2025 and the remaining coal-fired generation at Michigan City by the end of 2028, to be replaced by lower-cost, reliable and cleaner options. NIPSCO is continuing to evaluate the development of federal and state executive orders, or other regulatory actions, with respect to its generation transition plans. Absent a directive to remain open, NIPSCO remain on track to retire R.M. Schahfer's remaining two coal units by the end of 2025. NIPSCO is taking steps to be prepared to respond to any executive order or regulatory action to the contrary.

The current replacement plan primarily includes renewable sources of energy, including wind, solar, battery storage, and flexible natural gas resources to be obtained through a combination of NIPSCO ownership and PPAs. NIPSCO has sold, and may in the future sell, renewable energy credits from its renewable generation to third parties to offset customer costs. Since 2020, five PPA projects (two wind and three solar) and eight owned projects (two wind, four solar and two solar plus storage) have been placed into service totaling 3,051 MW of nameplate capacity, including Dunns Bridge II, Fairbanks, Gibson and Appleseed, which were placed into service in January, May, and August 2025, respectively. NIPSCO has executed several PPAs to purchase 100% of the output from renewable generation facilities at a fixed price per MWh. Each facility supplying the energy has an associated nameplate capacity, and payments under the PPAs do not begin until the associated generation facility is placed into service. See "Executive Summary - Energy Transition" in this Management's Discussion for additional information. We expect the Templeton and Carpenter projects to be placed in service between 2025 and 2027.