Private equity juggernaut Blackstone completes $2.16 billion investment in NIPSCO

The infrastructure unit of New York-based private equity giant Blackstone has completed the acquisition of a just under 20% stake in the Northern Indiana Public Service Company (NIPSCO), the companies said in a Tuesday release.

The deal, worth $2.16 billion, was first announced by NIPSCO parent company NiSource in June, and comes with an additional equity commitment of $250 million by Blackstone Infrastructure Partners to fund ongoing capital requirements. The Merrillville-based NiSource will maintain ownership of 80.1% of NIPSCO.

“We are pleased to announce the completion of this transaction and are excited about the longterm partnership we have entered into with Blackstone,” NiSource president and CEO Lloyd Yates said in a news release. “The transaction strengthens our balance sheet, supports our financing plan and provides greater flexibility to execute on high-quality capital investments that will enhance the safety, reliability and sustainability of our gas and electric systems for the benefit of our customers …. This financing transaction will have no impact on NIPSCO’s current strategic direction or on our commitment to our gas and electric customers in Indiana.”

Blackstone Infrastructure senior managing director Sebastien Sherman said that the deal “underscores Blackstone’s commitment to decarbonization to create value for our investors and our desire to help facilitate the reindustrialization of the Midwest.”

“We are excited to invest behind NIPSCO, one of the fastest growing utilities in the country with one of the nation’s fastest decarbonization plans,” he added. “Blackstone looks forward to supporting the vital role that NIPSCO plays in communities across Northern Indiana.”

NiSource, which also operates the Ohio-based Columbia Gas, is one of the largest fully regulated utility companies in the United States. It provides natural gas service to roughly 3.5 million customers and electricity to another 500,000 across six states, according to its website.

In August, the Indiana Utility Regulatory Commission (IURC) approved an increase in NIPSCO’s electric rate, which is expected to increase an average customer’s bill by at least $12 this year. In October, the company filed another request with the IURC asking for a 10.6% increase in its natural gas rates. That rate increase is still under review.

Blackstone, whose assets crossed the $1 trillion threshold earlier this year, is the world’s largest alternative investment firm. With more than 300,000 units of rental housing in the U.S. among those assets, it is also the country’s largest landlord.

Blackstone has come under fire from housing advocates, who have accused it of contributing to the global housing crisis by sharply raising rents, aggressively pursuing evictions, and opposing efforts to impose rent control. In 2019, the United Nations’ housing adviser accused the company of “using its significant resources and political leverage to undermine domestic laws and policies that would in fact improve access to adequate housing consistent with international human rights law.”

A report released in March by the nonprofit Private Equity Stakeholder Project noted steep rent hikes at hundreds of Blackstone’s properties and recommended that the company voluntarily limit rent increases on its properties to 3% per year.

Blackstone, for its part, has dismissed these criticisms.

“We own less than 1% of rental housing in the U.S. and every market across the UK and Europe where we own assets,” the company wrote on its website in July. “Given our ownership levels, we have virtually no ability to impact market rent trends. Rents are going up because there is significantly less supply of housing across the globe than demand for it.”