FOR IMMEDIATE RELEASE
August 1, 2002

FOR ADDITIONAL INFORMATION

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

MERRILLVILLE, Ind.---- - Northern Indiana Public Service Company (NIPSCO) announced today that gas costs for August 2002 are approximately one percent lower than July 2002 natural gas prices. As a result, NIPSCO customers will see a slight decrease in natural gas costs when compared to last month through the company's gas cost adjustment (GCA).

For example, a typical NIPSCO residential customer using 50 therms of natural gas during July should expect a $0.37 decrease from last month's statement in their August billing. NIPSCO's business and commercial gas customers should see decreases on their August billing statements as well.

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

According to company officials, relatively high levels of gas in storage across the nation have contributed to the moderation in wholesale natural gas prices. National storage levels are currently higher as compared to inventory levels at this time for the past five-year period.

NIPSCO continues to encourage its customers to use energy wisely. Customers are also reminded about various products and services available to help manage 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 natural 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 natural 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.