August 30, 2000

MERRILLVILLE, Ind.--- Northern Indiana Public Service Company (NIPSCO), a subsidiary of NiSource Inc., joined the American Gas Association (AGA) and other Indiana gas utilities on Wednesday in presenting information to the Indiana Utility Regulatory Commission (IURC) regarding natural gas prices and issues for the coming heating season.

Jeffrey Yundt, NiSource Inc. executive vice president, and R. Douglas Walker, NiSource Inc. director of Corporate Gas Supply, presented NIPSCO's assessment of winter gas prices, natural gas availability, what customers can do to prepare for the winter heating season, and ways NIPSCO can provide assistance.

"While early winter weather and other factors can still affect the actual gas prices we see this winter, we are informing customers to plan on increases of 50 to 60 percent in their natural gas bills in December 2000, and January and February 2001 when compared to the same months last heating season," said Yundt. "This comparison assumes normal winter temperatures this heating season versus last season's milder than normal winter."

NIPSCO recovers from customers what it pays for natural gas through its monthly Gas Cost Adjustment (GCA) and is not profiting from the recent natural gas price increases. NIPSCO is committed to providing its customers with reliable natural gas supplies at the lowest possible cost. To do this, NIPSCO continuously seeks to improve its purchase contracts and its storage and transmission costs in an effort to ensure the most competitive price for its customers as well as ease the effect of market price fluctuations on their monthly billing statements.

"A combination of decreased production during 1997 and 1998 due to unusually low gas prices coupled with increasing demand by business and industry due to the strong economy has created a supply imbalance in the market," Yundt stated. "While new production in response to higher gas prices has taken place, it can take six to eighteen months for these new supplies to reach the market and have an impact on prices."

Although some imbalances do currently exist in the natural gas market, Yundt emphasized that these are temporary market changes that do not represent long-term supply and demand problems with natural gas.

"NIPSCO anticipates no problems in meeting the natural gas needs of our customers this winter," said Yundt. "NIPSCO has access to eight interstate pipelines and up to 100 suppliers, with an additional source of Canadian gas available later this year from a new contract with Vector pipeline. In addition, NIPSCO has significant storage facilities and a distribution system with the capacity to meet the demands of our customers."

Yundt informed the commission that NIPSCO will be communicating with its customers through its monthly energy newsletter sent with each bill, information included with monthly gas cost adjustment press releases, and a new section to NIPSCO's web site available in September addressing gas prices and issues. NIPSCO will also be scheduling "Natural Gas Road Shows" in early October, where NIPSCO officers will schedule visits across the service territory to discuss gas price issues with community leaders, elected officials, and the media.

NIPSCO also plans to have its Public Affairs representatives and Sales Support personnel available to talk with community groups, civic and business organizations, and NIPSCO's Consumer Advisory Panels (CAP) to help keep customers informed regarding gas price issues.

Yundt said the utility is encouraging customers to take time now to improve the energy efficiency of their homes and check their gas appliances to be sure they are operating efficiently and safely.

"NIPSCO offers its free "Contractor Connect" program to our customers where, by simply calling our customer service phone center, the company can recommend qualified and certified heating and home improvement contractors they can trust," said Yundt. "NIPSCO can also provide customers with our 99 Ways to Save Energy booklet to help identify energy conservation ideas."

To prevent the large winter heating bills, NIPSCO is also encouraging customers to sign up for the NIPSCO Budget Plan.

"It's not too late to benefit from a budget plan," said Peg Landini, NIPSCO's vice president of Commercial Operations. "Customers can sign up for our eight-month budget plan beginning in October or became a budget plan customer immediately. The sooner customers sign up, however, the more months we have to average their bills and reduce their monthly budgets. "

Landini also stated NIPSCO's Customer Service phone center can assist customers concerned with bill payment problems by identifying state and local energy assistance agencies. Customers may also be eligible for NIPSCO's Gift of Warmth program for which the company has matched up to $500,000 annually in community contributions for local energy assistance since 1982.

Customers can call NIPSCO's customer service at 1-800-4NIPSCO (1-800-464-7726).

Northern Indiana Public Service Company (NIPSCO), a subsidiary of NiSource Inc., is a regulated utility that provides natural gas to nearly 700,000 customers and electricity to 416,000 customers across the northern third of Indiana. NIPSCO is the largest natural gas distribution company, and the second largest electric distribution company, in the state of Indiana. Information about NiSource Inc. and its subsidiaries is available via the Internet at www.nisource.com.