February 16, 2001

MERRILLVILLE, Ind.---Northern Indiana Public Service Company (NIPSCO), a subsidiary of NiSource Inc., announced today that electric system improvements in LaGrange and Steuben counties are on schedule for a June 2001 completion in spite of the severe winter weather. Work on this $12 million system improvement program began in July 2000, and follows earlier projects in northeast Indiana begun in February 2000.

"Construction crews continue to make progress on the system improvements we promised to our customers last February," said Robert Schacht, NIPSCO's vice president and chief operating officer. "Once completed, these improvements will enhance system reliability and allow for additional capacity to serve both today's needs and future growth."

NIPSCO announced plans in June 2000 to invest an additional $12 million in system improvements to 60 miles of its 69,000-volt (69kv) transmission system and five electric substations serving the utilities' northeast Indiana service territory.

Construction crews recently completed seven miles of new 69kv transmission line between the Nevada Mills substation and the town of Orland. This new section of transmission line will allow for increased electrical capacity to the area and improved reliability by tying together NIPSCO's Barton Lake substation in Steuben County and LaGrange substation in LaGrange.

Work is currently underway on an additional 12 miles of new 69kv transmission line located between County Road 1100 East and the LaGrange substation. On January 29, 2001, NIPSCO began to rebuild a 15-mile section of transmission line between the Angola and Barton Lake substations that will allow for increased capacity and additional operational flexibility.

In addition, to this transmission line work, upgrades to the Barton Lake substation are currently being made and are scheduled for completion by June 1, 2001.

Northern Indiana Public Service Company (NIPSCO), with local headquarters in Merrillville, Ind., serves approximately 700,000 gas and 425,000 electric customers in 32 Indiana counties. NIPSCO is a subsidiary of NiSource Inc. (NYSE: NI), a holding company with headquarters in Merrillville, Ind., 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.