FOR IMMEDIATE RELEASE
May 10, 2004

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

A Statement From Northern Indiana Public Service Company (NIPSCO) Regarding Contract Negotiations With United Steelworkers Union Locals 12775 and 13796

Merrillville, Ind. --- NIPSCO must carefully consider tomorrow’s implications of today’s decisions. NIPSCO provides many of the best jobs in northern Indiana.

Like every other industry, utilities are struggling to manage two huge cost issues: healthcare coverage and retirement benefits.

Our goal is to preserve NIPSCO retirees' healthcare coverage for many years to come. That is why we are working to slow the rate of health care cost increases now, so that we will be better able to continue to offer post-retirement medical benefits in the future.

The company’s proposal regarding medical benefits is to offer union employees the same benefits package that most NiSource and NIPSCO management employees have today. Under this plan, many active employees would actually save money depending on their usage due to lower premiums. Any potential out-of-pocket increases would only affect those who use more services.

Medical benefits are only one part of a comprehensive proposal that the company is making to the union.

The entire contract proposal, taken together, represents a fair and equitable balance that includes benefits, wages and work rules.

As negotiations continue, it's important to keep in mind that, ultimately, we're all on the same team, and our success depends on working together. We are committed to working at the negotiating table to get a contract that benefits everyone.

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.nisource.com.