FOR IMMEDIATE RELEASE
October 25, 2004

FOR ADDITIONAL INFORMATION

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

MERRILLVILLE, Ind. - Northern Indiana Public Service Company (NIPSCO) today announced that due to increases in wholesale natural gas prices over the past few weeks, customers’ bills are expected to rise.

"Dramatic and significant changes in wholesale market activity during the past few weeks have brought about price increases," said NIPSCO President Mark Maassel. "Natural gas bills are expected to be 10 to 15 percent higher for the November 2004 to March 2005 winter heating season when compared to a similar period last winter. These increases will be reflected in our residential customers’ natural gas bills beginning in November."

NIPSCO purchases its natural gas from wholesale gas suppliers. NIPSCO, which adjusts its natural gas costs monthly to accurately reflect the changes in wholesale markets, does not mark up the cost of the natural gas, and charges customers only what it pays to purchase the gas.

NIPSCO attributed the increase to a number of factors and did not rule out future price increases. The natural gas price increase is due in part to the significant rise in oil and home heating oil prices that drive up the wholesale market for natural gas.

"I am disturbed by this rise in natural gas prices. I am also disturbed by the impacts on our customers and we are committed to working with customers to minimize the impact of price increases," Maassel said. "We encourage our customers to prepare now for high natural gas prices this winter heating season, take advantage of our assistance programs, and call NIPSCO if bill payment problems occur."

NIPSCO offers a variety of programs that will help customers manage their home heating bills this winter, including:

• BudgetPlan, which provides an average monthly bill based on past energy usage and estimated future prices. Customers pay an equal amount each month.
• DependaBill, which is a predetermined, totally guaranteed, fixed monthly natural gas bill for 12 months.
• Price Protection Service Program, which offers customers the flexibility of choosing a fixed price option or a capped price option.
• NIPSCO Choice, which allows customers to shop for an alternate gas supplier.
• Assistance locating available energy support, such as the Low Income Home Energy Assistance Program (LIHEAP).

NIPSCO will be launching a short-term consumer-education campaign - comprised of print advertisements - across its service area to provide customers with tips and strategies on how to conserve energy.

"Regardless of income, it’s important for all of our customers to try to conserve energy, such as keeping the thermostat set at 68 degrees, as well as weatherizing homes by sealing and caulking around windows and doors," Maassel said.

A brochure called 99 Ways to Conserve Energy is available to customers by visiting www.nipsco.com or by calling 1-800-4NIPSCO (1-800-464-7726).

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 440,000 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.