FOR IMMEDIATE RELEASE
December 4, 2002

FOR ADDITIONAL INFORMATION
Larry Graham, Manager
NIPSCO Communications
260-439-1330
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

MERRILLVILLE, Ind. - Northern Indiana Public Service Company (NIPSCO) announced today that gas costs for December 2002 are approximately three percent higher than November 2002 natural gas prices. As a result, NIPSCO customers will see an increase 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 150 therms of natural gas during November should expect a $3.81 increase from last month's statement 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 rise in gas prices is attributed to anticipated seasonal demand. The adjustment was approved subject to refund by the Indiana Utility Regulatory Commission (IURC).

"We encourage our customers to consider all available options in managing their winter energy costs," said Dan Gavito, vice president, NIPSCO Regulatory and Governmental Policy. " It is important for customers to take advantage of all information available through their monthly bills, bill inserts, and NIPSCO's Web site."

Helpful information is also available from the Indiana Office of Utility Consumer Counselor (OUCC) 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.

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).

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 nearly 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 3.7 million natural gas and electric customers primarily in nine states. More information about NIPSCO is available at www.nipsco.com.