Northern Indiana to Benefit from NIPSCO’s EPA Settlement

MERRILLVILLE, Ind., Jan. 13, 2011 /PRNewswire/ — Following discussions with the
U.S. Environmental Protection Agency (EPA), Department of Justice (DOJ) and the
Indiana Department of Environmental Management, NIPSCO today finalized a
settlement outlining about $600 million in new environmental investments,
conservation initiatives, and clean energy programs designed to improve the
environmental and economic sustainability of northern Indiana.

“This is a major win for our customers, the environment and the communities we
serve,” NIPSCO CEO Jimmy Staton said. “The significant new investments and
environmental projects identified in the settlement will enhance the long-term
environmental and economic sustainability of northern Indiana while also
creating hundreds of new jobs and delivering important new clean energy options
for our customers. This collaborative, forward-looking solution will deliver
tangible benefits for our environment, our customers and the communities we
serve.”

Outlined in the settlement are environmental controls and clean air technology
that further reduce nitrogen oxide, sulfur dioxide and particulate matter
emissions at the company’s coal-fired electric generation facilities.

The settlement is the 17th reached by the EPA and DOJ as part of a national
initiative to control emissions from coal-fired power plants under the Clean Air
Act’s New Source Review requirements. It follows a 2004 Notice of Violation of
the EPA’s New Source Review process alleging that NIPSCO made upgrades or
modifications to its generating facilities in the 1980s and 1990s without
obtaining the proper permits.

NIPSCO is among more than 50 U.S. electric companies receiving a Notice of
Violation since 1998 as part of the EPA initiative, and NIPSCO maintains that it
acted in accordance with the regulations and conducted only routine maintenance
and upgrades on the units. This settlement resolves all matters related to the
New Source Review and future claims through 2018.

Importantly, the investments contemplated in the settlement support and
complement the environmental improvements NIPSCO has already made to date.

Continuing Environmental Investment in Northern Indiana

NIPSCO is a leader in improving air quality. Since 1990, the company has
individually reduced the NOx and SO2 emissions by 70 percent with investments of
more than $350 million. In part due to environmental investments by NIPSCO,
northwest Indiana was designated as an attainment area in 2010 for the first
time since the EPA 1990 Clean Air Act was adopted. Attainment area status is a
key factor in economic and community development.

“We’re proud of our environmental performance and the fact that many of the
investments identified in the settlement have already been planned as part of
NIPSCO’s long term environmental improvement strategy,” Staton said. “We
currently operate one of the cleanest-burning coal fleets in Indiana. With these
investments, we will continue our leadership position and further improve air
quality for residents in northern Indiana.”

Benefits of the Settlement

By the close of 2018, NIPSCO will invest approximately $600 million in improved
environmental technology and related projects. Key benefits of these investments
will include:

— Cleaner Air:NIPSCO’s electric generating fleet is expected to be among
the cleanest in Indiana, with NOx emissions lowered by an additional 35
percent from current rates, SO2 emissions lowered by an additional 80
percent from current rates, and other benefits, such as reduced fleet
vehicle emissions and improved air quality monitoring, will be achieved.
These improvements will have an added benefit of helping NIPSCO achieve
compliance with anticipated tighter future emission standards.
— Jobs and Economic Development: Installation of new environmental
controls at NIPSCO’s R.M. Schahfer, Bailly and Michigan City generating
stations are projected to create hundreds of new jobs for locally
contracted companies during the next eight years, as well as new
positions within the company.
— Conservation and Clean Energy:NIPSCO also will invest $9.5 million over
the next five years in new environmental conservation and clean energy
projects, including:
o Working with local communities and organizations to develop new
publicly available electric vehicle charging stations – powered
exclusively with renewable energy
o Replacing and retrofitting diesel engines with hybrid and/or electric
vehicles throughout our service territory
o Partnering with the Indiana Dunes National Lakeshore and other
regional conservation groups to acquire and conserve environmentally
sensitive properties in the region

Under the terms of the settlement, NIPSCO will also pay a $3.5 million civil
penalty. The additional environmental investments have been planned as part of
anticipated ongoing capital spending.

For more information about NIPSCO’s environmental investments and energy savings
tips, customers are encouraged to visit www.NIPSCO.com.

NIPSCO, with headquarters in Merrillville, Ind., is one of the nine energy
distribution companies of NiSource Inc. (NYSE: NI). With more than 712,000
natural gas customers and 457,000 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 3.8 million natural gas and electric customers
primarily in seven states. More information about NIPSCO is available at
www.nipsco.com.

About NiSource

NiSource Inc., based in Merrillville, Ind., is a Fortune 500 company engaged in
natural gas transmission, storage and distribution, as well as electric
generation, transmission and distribution. NiSource operating companies deliver
energy to 3.8 million customers located within the high-demand energy corridor
stretching from the Gulf Coast through the Midwest to New England. Information
about NiSource and its subsidiaries is available via the Internet at
www.nisource.com. NI-F

Forward-Looking Statements:

Some of the statements provided herein include forward-looking information, in
addition to historical information. Readers should understand that many factors
govern whether any forward-looking statement contained herein will be or can be
realized including, but not limited to the success of regulatory initiatives,
the regulatory process, regulatory and legislative changes, as well as the items
discussed in the “Risk Factors” section of NiSource Inc.’s 2009 Form 10-K. Such
factors could cause actual results to differ materially from those projected.
All such forward-looking statements are expressly qualified by these cautionary
statements. All forward-looking statements are based on assumptions that
management believes to be reasonable; however, there can be no assurance that
actual results will not differ materially. NiSource Inc. expressly disclaims a
duty to update any of the forward-looking statements contained in this release.

SOURCE Northern Indiana Public Service Company