FOR IMMEDIATE RELEASE
January 5, 2004

FOR ADDITIONAL INFORMATION

Larry Graham, Manager NIPSCO Communications and Community Relations (260) 439-1330 Tony Dzwonar OUCC External Affairs Director (317) 233-9682 Beth Herriman IURC Director of Public Information (317) 232-2714

MERRILLVILLE, Ind. - Northern Indiana Public Service Company (NIPSCO) announced today that natural gas costs for January 2004 increased compared to last month. NIPSCO residential customers will see an increase in natural gas costs of 9.36 percent when compared to December 2003 through the company's gas cost adjustment (GCA). The Indiana Utility Regulatory Commission (IURC) approved the December adjustment subject to refund.

A typical NIPSCO residential customer using 200 therms of natural gas during December 2003 should expect an increase of $15.52 from last month's statement in their January billing, although total bill amounts will vary as a result of actual consumption.

NIPSCO still expects an average January natural gas bill to be slightly less than forecasted by the utility in October 2003.

In December 2003, the natural gas market experienced price increases of 40 to 50 percent due to colder than normal temperatures, causing increased demand in portions of the Midwest and East Coast.

NIPSCO utilizes a balanced portfolio of storage gas purchased prior to winter and contracts with suppliers to reduce price volatility for our customers.

The $15.52 increase for a customer using 200 therms of natural gas includes a reduction of $.96 as part of a previously announced $3.8 million refund to NIPSCO customers. Customers will receive the final GCA credit on their January 2004 bill to complete the refund. The amount of the GCA refund credit received by each customer will vary with actual usage.

The IURC required the GCA refund as part of its September 2003 order following a review of NIPSCO's March 2003 natural gas costs initiated by the Indiana Office of Utility Consumer Counselor (OUCC).

NIPSCO encourages customers experiencing bill payment problems to contact NIPSCO at 1-800-4-NIPSCO (1-800-464-7726). Customer Service Representatives can provide options for managing energy costs and also help customers access available energy assistance. It is also important for customers to take advantage of all information available through their monthly bill messages, bill inserts and NIPSCO's web site.

Helpful information is also available from the 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 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.