January 14, 2004

NORFOLK, Va. (January 14, 2004) - Virginia Natural Gas, Inc. (VNG), a subsidiary of AGL Resources Inc. (NYSE: ATG), announced today it has filed a complaint with the Federal Energy Regulatory Commission (FERC) against Columbia Gas Transmission, a unit of Indiana-based NiSource (NYSE: NI). The complaint explains that during the last winter heating season, beginning in January 2003, VNG experienced a number of critical service problems with Columbia that interrupted deliveries of natural gas to some industrial customers and increased prices paid by all VNG customers. As a result, VNG is seeking approximately $37 million in damages, the majority of which would be distributed to customers should the utility prevail.

The FERC complaint cites two major operational failures in the Columbia system that impacted VNG and its customers. The first operational failure relates to pipeline pressure dropping below the contractual minimum pressure required (limiting the volumes of gas that could be moved); the second significant failure relates to the shutdown of Columbia's liquefied natural gas (LNG) facility in Chesapeake, Virginia, which resulted in Columbia delivering only one-fourth of its customer entitlements for the remainder of the heating season.

"Our customers have historically paid Columbia a contractual rate for services. The basic tenets for payment of those services required Columbia to deliver the contracted pressure and to make sure that winter peaking LNG facilities work when they are needed," said Hank Linginfelter, president of VNG. "We have had numerous discussions with Columbia officials over the past several months in an attempt to resolve our concerns related to Columbia's inability to deliver the contractually committed services. It eventually became clear to us that we had no choice but to take our complaint to the federal officials who oversee interstate pipelines in order to make sure that our customers are never placed in jeopardy again," he said.

In addition to detailing the failures of Columbia's system during a critical time, the complaint explains that VNG was forced to find more expensive alternatives on short notice to protect its customers from outages. The majority of the financial harm for which VNG is seeking recovery relates to the costs of operating more expensive, back-up facilities at VNG, purchases of more expensive sources of gas supply to meet customers' peak gas needs due to the Columbia system's limitations, and the recovery of historical payments to Columbia of reservation fees paid by VNG for LNG and storage capacity that, although required by contract, Columbia could not actually deliver.

"We are committed to making sure that our operation is completely failsafe, especially during the coldest months of the year," said Linginfelter. "Columbia is one of the primary sources of supply for our system and we cannot take a chance that the pipeline would fail again," he said.