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Columbia Gas of Maryland Requests Distribution Rate Adjustment

CANONSBURG, Pa.-(Business Wire)-October 1, 2008 - After 10 years without a distribution rate change, Columbia Gas of Maryland today filed for an adjustment with the Maryland Public Service Commission (PSC). The proposed request reflects increased costs of providing service, including the company’s ongoing infrastructure upgrade and replacement program.

“Our rate request is a direct reflection of our cost of doing business, which includes the replacement of our aging natural gas delivery system,” said Columbia Gas of Maryland president Terrence J. Murphy. “The men and women of Columbia Gas have serviced and maintained our existing infrastructure for decades, but portions of our system are nearing the end of their useful operating lives and need to be replaced. And, the cost of delivering gas – like everything else – has increased since 1998 when we last adjusted our rates.”

As new technologies advanced in the 1990s, the company kept distribution rates flat for a decade through cost-controlling improvements. However, the company can no longer offset operating and maintenance costs and must adjust rates appropriately to continue to deliver safe and reliable natural gas service.

Under the proposed increase of $3.7 million annually (5.27 percent increase in annual revenues), residential customers using 6.5 Mcf per month would pay $129 up 7 percent. Commercial customers using 34 Mcf per month would now pay $610 per month, up 1 percent. Industrial customers using 256.8 Mcf per month would now pay $4309 per month, a decrease of 2.6 percent. Utility rates are closely regulated by the PSC, and by law, Columbia Gas is required to pass the cost of natural gas to the customer without profit or markup.

The proposed new rates reflect costs incurred by the company to maintain service and other factors including increased costs for employee healthcare and wages, insurance, new technology, billing and customer service, and the costs of replacing its facilities to build a safer and more reliable natural gas distribution system. Since its last rate request in 1998, the company has invested more than $12.5 million in rate base to provide service.

The company is committed to maintaining its encompassing weatherization and customer assistance efforts. Columbia Gas of Maryland has an array of methods to assist low-income customers and those households in need of assistance. The company also partners with nonprofit organizations to offer conservation, weatherization and payment assistance for low income customers.

“We’re proud of what we’ve done to reduce costs and assist customers in need, but minimum costs to safely and reliably deliver natural gas have increased,” said Murphy. “That’s what customers pay for each month in the delivery portion of their bill. We want to make sure our customers see the value in the service we provide, which is why we recently announced plans to invest millions over the next 20 years to replace the aging pipes and facilities that deliver gas to our customers.”

If approved by the PSC, it is expected the new rates will go into effect in the second quarter of 2009. Customers with questions on the filing may call the company at 1-888-460-4332.

About Columbia Gas of Maryland

Columbia Gas of Maryland, with local headquarters in Canonsburg, serves approximately 33,000 customers in 3 counties. More information about Columbia Gas of Maryland is available at www.columbiagas.com.

Forward-Looking Statements

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those statements include statements regarding the intent, belief or current expectations of NiSource and its management. Although NiSource believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Readers are cautioned that the forward-looking statements in this presentation are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following: weather; fluctuations in supply and demand for energy commodities; growth opportunities for NiSource’s businesses; increased competition in deregulated energy markets; the success of regulatory and commercial initiatives; dealings with third parties over whom NiSource has no control; the effectiveness of NiSource’s outsourcing initiative; actual operating experience of NiSource assets; the regulatory process; regulatory and legislative changes; changes in general economic, capital and commodity market conditions; and counter-party credit risk.

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