FOR IMMEDIATE RELEASE
December 3, 2001

FOR INFORMATION CONTACT Bill Keegan Director Corporate Communications (219) 647-6203 Julia Van De Water Manager NIPSCO Communications (219) 647-6375 Anthony Swinger OUCC Public Information Officer (317) 233-2747 Mary Beth Fisher IURC Director of Public Information (317) 232-2297

NIPSCO ANNOUNCES GAS COST ADJUSTMENT
FOR DECEMBER
Natural Gas Costs Remain 20 Percent Lower Than 2000 Prices

MERRILLVILLE, IN - Northern Indiana Public Service Company (NIPSCO) announced today its gas cost adjustment for December 2001. While natural gas costs remain approximately 20 percent lower than December 2000 prices, NIPSCO announced that its gas cost adjustment (GCA) for December 2001 will increase 3.07 percent from the previous month.

This adjustment was approved subject to refund by the Indiana Utility Regulatory Commission (IURC).

For example, a typical NIPSCO residential customer using 150 therms of natural gas during November should expect a $3.06 increase in their December billing. NIPSCO's business and commercial gas customers should see increases on their December billing statements as well.

According to company officials, the slight increase in gas prices is due to the anticipated return to seasonal temperatures and a projected rise in natural gas demand for home heating use as cooler temperatures arrive.

NIPSCO continues to encourage its customers to use energy wisely. Customers are also reminded about various products and services available to them to help in managing their monthly utility costs.

For natural gas customers who want consistent monthly payments, NIPSCO's BudgetPlan allows customers to spread gas costs over an entire year. The NIPSCO Choice program gives customers an opportunity to choose an alternative natural gas supplier and NIPSCO's Price Protection Service option allows customers to fix or cap their per unit cost of gas.

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 customers without any markup under its traditional, regulated GCA service option.

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.

In addition, NIPSCO is reminding customers about their ability to complete various transactions through its automated phone service, DirectLink, including several convenient bill payment options that differ from traditional mail, such as writing a check via phone or paying with a credit or debit card. Customers with Internet access can also pay with a credit, debit card or check online, or enroll in NIPSCO's Online Bill Payment program. For more information about DirectLink services and options, customers can call NIPSCO at 1-800-4-NIPSCO (1-800-464-7726).

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

The Indiana Utility Regulatory Commission (IURC) may be contacted toll-free at (800) 851-4268, or via their website at www.in.gov/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.

NIPSCO, with headquarters in Merrillville, Ind., is one of the 10 energy distribution companies of NiSource Inc. (NYSE: NI). With approximately 700,000 natural gas customers and 430,000 electric 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. NiSource distribution companies serve 3.6 million natural gas and electric customers primarily in nine states. More information about NIPSCO is available at www.nipsco.com.