IURC News Release

Indiana Utility Regulatory Commission

302 West Washington Street, Room 306

Indianapolis Indiana 46204

317.232.2297 office

317.233.1982 fax

www.state.in.us/iurc

Contact: Mary Beth Fisher

For Immediate Release

September 23, 2002

IURC APPROVES SETTLEMENT WHICH ENDS INVESTIGATION OF NIPSCO RATES

Today the Indiana Utility Regulatory Commission approved a settlement agreement between NIPSCO, Indiana Office of Utility Consumer Counselor, Ispat Inland Steel Inc., LTV Steel Company, Inc., Unilever Home and Personal Care USA, Central Soya Company, U.S. Steel, Praxair and Bethlehem Steel.

In Cause No. 41746, the majority of the Commissioners believe the agreement, as clarified by the Commission, is a reasonable compromise to a difficult case. The settlement will provide NIPSCO’s electric customers with an immediate decrease in their bills.

Key elements of the agreement include:

• Customer Credits:
  Annual revenue reduction of approximately $55 million – for a period of 49 months. The cumulative total is $225 million.
• Keep Current rates:

NIPSCO will only ask for a rate increase in the case of an emergency. This reflects a change in the company’s position that its rates should be increased by 24%.

· Sharing Mechanism:

The Commission may investigate NIPSCO’s rates during the term of the settlement agreement. If it is determined that the company is over-earning in a 12 month period the amount over-earned will be split with its customers.

• Headquarters:

NIPSCO will keep its corporate headquarters and principal corporate office in Indiana on a fully staffed basis during the term of the settlement.

· Separation:

NIPSCO agrees to withdraw its motion to separate its electric and gas utilities and not to file a similar petition for 12-months following approval of the settlement agreement.

On January 24, 2001, the IURC opened an investigation into the rates of NIPSCO. There have been numerous hearings and thousands of pages of testimony filed. On June 20, 2002 NIPSCO and the settling parties submitted the settlement agreement to the IURC for consideration.

This is an investigation, not a rate case and NIPSCO has not asked the Commission to decline, or restrict its jurisdiction in any way.

Under terms of the agreement, customers will receive credits on their bills even if parties that intervened in the case and did not sign onto the settlement appeal the Commission decision.

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