FOR IMMEDIATE RELEASE
June 15, 2004

FOR ADDITIONAL INFORMATION

Larry Graham NIPSCO (260) 439-1330 Tony Dzwonar Indiana Office of Utility Consumer Counselor: (317) 233-9682

The Indiana Office of the Utility Consumer Counselor (OUCC) and Northern Indiana Public Service Company (NIPSCO) have filed a comprehensive settlement agreement with the Indiana Utility Regulatory Commission (IURC) resolving all issues involving NIPSCO’s most recent annual Gas Cost Adjustment (GCA) review.

The settlement agreement is subject to IURC approval.

Under the settlement, NIPSCO would refund $3.8 million to those customers whose natural gas cost is subject to the monthly gas cost adjustment. The OUCC and NIPSCO further agreed to improve communications regarding the utility’s natural gas purchasing plans and practices.

The parties also propose to extend the expiration date of NIPSCO’s Alternative Regulatory Plan (ARP), under which the utility offers its retail natural gas Choice and Price Protection Service (PPS) programs. Extending the ARP’s expiration date from December 31, 2004 to March 31, 2005 would allow more time for discussions currently underway on renewing the ARP. The IURC approved the settlement between NIPSCO, the OUCC and other parties on the utility’s ARP proposal in October 1997.

The ARP also established a Gas Cost Incentive Mechanism (GCIM) under which the utility and its customers are to share savings achieved when the utility beats certain price benchmarks in purchasing natural gas for its regulated GCA customers.

“All the parties involved in NIPSCO’s alternative regulatory plan have learned a great deal from the experience to date,” said Indiana Utility Consumer Counselor Anne E. Becker. “This agreement continues the process of fine-tuning the plan to ensure that both NIPSCO ratepayers and shareholders continue to benefit.”

“The natural gas market continues to offer new purchasing opportunities for our customers. Through this settlement agreement, we clarified with the OUCC how these natural gas purchasing opportunities will be handled in the future and resolved different views that existed,” said NIPSCO President Mark Maassel. “NIPSCO looks forward to working with the OUCC and sharing additional information regarding how our purchasing practices provide safe and reliable supplies of natural gas at a competitive market price while controlling price volatility for our customers.”

Based on the yet to be approved settlement agreement, NIPSCO estimates the average residential natural gas customer, whose gas cost is subject to the monthly gas cost adjustment, would receive a total refund amount of approximately $4.30.

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.

The Indiana Office of Utility Consumer Counselor (OUCC) is the state agency that represents the interests of all utility consumers and the public in matters related to the provision of utility services. The agency is active in proceedings before regulatory and legal bodies, and committed to giving consumers a voice in the creation of utility service policy. Consumers with questions or concerns regarding utility service can contact the OUCC toll-free at 1-888-441-2494 or on the World Wide Web at www.IN.gov/OUCC.