NIPSCO ANNOUNCES GAS COST ADJUSTMENT TO DECREASE IN FEBRUARY

MERRILLVILLE, Ind. - Northern Indiana Public Service Company (NIPSCO), a subsidiary of NiSource Inc., announced today a decrease in its gas cost adjustment (GCA) for February 2001.

This adjustment, which was approved subject to refund by the Indiana Utility Regulatory Commission (IURC), represents a 1.06 percent decrease in a typical residential customer's bill from January 2001. NIPSCO's business and commercial gas customers will see similar impacts on their billing statements.

For example, a typical NIPSCO residential customer using 200 therms of natural gas during January should expect a $2.24 decrease in their February billing statement when compared to last month.

Natural gas commodity prices for the month of February 2001 are projected to be lower than January 2001 prices. The warmer-than-normal temperatures across the country are contributing to this decrease. The national weather service forecasts now indicate that the above-normal temperatures can be expected for the country in the near future. Lower demand for natural gas due to moderating temperatures will provide some relief for concerns over national storage inventory levels.

For natural gas customers who are more comfortable with price stability, NIPSCO's Budget Plan is an option to stabilize their monthly gas bills. The NIPSCO Choice program gives customers an opportunity to choose an alternative natural gas supplier.

The GCA is an allowed monthly adjustment to the gas supply charge portion of NIPSCO's natural gas service rates. The adjustment, which must be approved by the IURC, reflects the fluctuations in the price NIPSCO pays in the marketplace for natural gas. The company passes on the costs of the natural gas directly to the customer without any markup.

Aside from the gas supply charge, the other components of NIPSCO's monthly gas statements include service costs for gas delivery, and state and local taxes. These service costs, which are also regulated by the IURC, vary with monthly gas use.

Customers may contact the Indiana Office of the Utility Consumer Counselor toll-free at (888) 441-2494, or visit their website at www.state.in.us/oucc. The OUCC is the state agency that represents the interests of Indiana consumers in matters related to the provision of utility services.

The Indiana Utility Regulatory Commission (IURC) may also be contacted toll-free at (800) 851-4268, or visit the their website at www.state.in.us/iurc. An advocate of neither the public nor the utilities, the IURC is required by state statute to make decisions that balance the interests of all parties to ensure that utilities provide adequate and reliable service at reasonable prices.

Northern Indiana Public Service Company (NIPSCO), with local headquarters in Merrillville, Ind., serves approximately 700,000 gas and 425,000 electric customers in 30 Indiana counties. NIPSCO is a subsidiary of NiSource Inc. (NYSE: NI), whose operating companies engage in virtually all phases of the natural gas business from exploration and production to transmission, storage and distribution, as well as electric generation, transmission and distribution. As the second-largest natural gas distributor in the U.S., NiSource companies serve a high-growth energy corridor from the Gulf of Mexico to the Midwest to New England. NiSource distribution companies serve 3.6 million gas and electric customers primarily in nine states.