FOR IMMEDIATE RELEASE
July 16, 2004

FOR ADDITIONAL INFORMATION

Larry Graham, Manager NIPSCO Communications (260) 417-1685

MERRILLVILLE, Ind. --- Northern Indiana Public Service Company (NIPSCO) announced today that Selective Catalytic Reduction (SCR) systems are operational at three of NIPSCO’s coal-fired generating facilities, providing improved air quality during the ozone season.

SCR systems significantly reduce nitrogen oxide (NOx). NOx, which is a byproduct gas generated during the fuel combustion process, contributes to the formation of ozone. Ozone is a major component of smog, which is formed in the summer months in periods of high temperatures, strong sunlight and little or no wind.

"Since new federal and state standards were established for reducing NOx emissions, NIPSCO has maintained an aggressive schedule for installing SCR units," said NIPSCO Vice President of Generation, Transmission, Construction, and Chief Operations Officer Jerry Godwin. "In just over two years, NIPSCO has placed in service three of the NOx reduction systems, which greatly reduce NOx emissions for the summer ozone season. Additional work will continue to install "smart" systems designed to optimize unit operations and emission controls, which will improve efficiency and further reduce NOx emissions."

NIPSCO began its NOx SCR control program in January 2002 with the installation of a SCR system on Unit 12 located at Michigan City Generating Station, which became operational in June 2003. Construction of additional SCR systems followed at the R. M. Schahfer Generating station in Wheatfield, Indiana and the Bailly Generating Station in Porter County, Indiana. Both of these units became operational in May 2004.

NIPSCO has estimated the capital cost for NOx compliance at approximately $274 million once all equipment installation has been completed.

In the past decade NIPSCO has spent over $250 million to construct, operate and maintain pollution control equipment, primarily Sulfur Dioxide (SO2) scrubbers at the Bailly and Schahfer generating stations. All of NIPSCO’s generating units control SO2 by using scrubber technology or low-sulfur coal.

"NIPSCO’s efforts to control the emission of NOx and SO2 have resulted in NIPSCO operating some of the most environmentally sound coal-fired generating units in the country," said Godwin.

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.