2009 Sustainability Report

BUILDING
C U STOM E R- F O C U SE D E N E RG Y S OLU T ION S
E N V I R O N M E N T A L S T E WA R D S H I P
S T R O N G , S TA B L E C O M M U N I T I E S
E N G AG E D, A L IG N E D A N D S A F E T E A M S
S U S T A I N A B L E VA L U E
2 0 0 9 S U S TA I N A B I L I T Y R E P O RT
F O R WA R D L O O K I N G S T A T E M E N T
This report 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 report 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 forwardlooking 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 restructured outsourcing agreement; actual operating experience of NiSource's assets; the
regulatory process; regulatory and legislative changes; the impact of potential new environmental laws or regulations; the
results of material litigation; changes in pension funding requirements; changes in general economic, capital and commodity
market conditions; and counterparty credit risk, many of which are risks beyond the control of NiSource. In addition, the
relative contributions to profitability by each segment, and the assumptions underlying the forward-looking statements
relating thereto, may change over time.
R E P O R T PA R A M E T E R S
This first annual NiSource sustainability report covers the 2009 calendar year and was developed to address issues that are
relevant to NiSource and its stakeholders, subject to data availability. This report is not all-inclusive. It provides a foundation
for future reports and covers the three principal businesses of NiSource Inc.: natural gas distribution; natural gas
transmission and storage; and electric transmission, generation, and distribution. In this report, we address four
stakeholders and the sustainability programs we are building: communities, customers, employees, and environment.
Historical data has been normalized to account for organizational changes from period to period.
For additional information or to provide feedback on the report, please contact Julie Shea, Team Leader, Environmental
Health & Safety, NiSource, 801 East 86th Avenue, Merrillville, IN 46410 or by email at [email protected].
NiSource Inc.
1
MESSAGE FROM THE PRESIDENT AND CEO
BUILDING
S U S TA I N A B L E
VA L U E
On behalf of our Board of Directors and management
team, I am pleased to present NiSource’s 2009 Corporate
Sustainability Report.
At NiSource, our aspiration is to be the premier company
in our industry. We are working hard to achieve that goal
by building customer-focused energy solutions, executing
on investment-driven growth opportunities, and
generating sustainable value for our investors, customers,
and employees. Underpinning this
effort is our unwavering commitment
to top-tier safety and reliability,
OUR AS
employee engagement, collaborative
stakeholder relationships, and
forward-looking environmental
practices and stewardship.
P I R AT I O N
“Our aspiration is to be
the premier company
in our industry.”
These commitments are at the heart
of our sustainable business
approach, and I am pleased that we
Robert C. Skaggs, Jr.
are able to highlight them in this
report. Each aspect of our balanced
President and CEO
business portfolio is addressed in this
document, from natural gas
distribution, transmission and
storage, to electric generation, transmission and
distribution. The report is grouped into sections focusing
on key aspects of our sustainability strategy:
• Customer-Focused Energy Solutions.
• Environmental Stewardship.
• Strong, Stable Communities.
• Engaged, Aligned and Safe Teams.
As you will see, our charge across all of these areas is to
deliver positive business results while faithfully adhering
to our core values and commitments. We are meeting this
challenge – as we have so many others – in a disciplined
fashion, with a strong emphasis on planning, collaborative
stakeholder engagement, solid execution, and transparent
measurement and reporting. This balanced, commonsense approach has served us well in the past, and it
continues to be our hallmark moving forward.
Although this is our first formal sustainability report,
NiSource’s commitment to sustainability is not new. More
TA B L E O F C O N T E N T S
PG.
A MESSAGE FROM OUR CEO
1
SUSTAINABILITY VISION & POLICY STATEMENT
3
OUR COMPANY: NISOURCE CORPORATE PROFILE
4
CUSTOMER-FOCUSED ENERGY SOLUTIONS
6
ENVIRONMENTAL STEWARDSHIP
13
STRONG, STABLE COMMUNITIES
24
ENGAGED, ALIGNED AND SAFE TEAMS
27
REPORT INTEGRITY & GRI CONTENT TABLE
35
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COMMITMENT
than a decade ago, NiSource’s Board of Directors
established a standing committee to review and guide our
environmental, health and safety performance and
recently expanded to incorporate sustainability related
matters. That enterprise-level focus – reflected in our
NiSource Sustainability Policy on the next page – has
driven significant improvements across our organization
and continues to guide our efforts today.
We are serious about establishing a legacy of sustained
economic growth, social responsibility and environmental
stewardship. It is essential to our long-term aspiration,
and a core part of our strategy to provide sustainable
value for our stakeholders.
Thank you for your interest and continued support of
NiSource.
Sincerely,
Robert C. Skaggs, Jr.
President and CEO
NiSource Inc.
NiSource Inc.
3
OU R SU STA I NA B I L I T Y P OL IC Y
OUR
FOUNDATION
NISOURCE’S
S U S TA I N A B I L I T Y P O L I C Y
Our Vision is to establish a legacy of sustained economic
growth, social responsibility and environmental
stewardship reflective of a Premier Energy Company.
To these ends, NiSource is committed to:
• Delivering sustainable economic growth;
• Enhancing our stakeholders’ quality of life; and
• Serving as responsible stewards of natural and
environmental resources.
To fulfill this commitment, we will:
Promote Strong, Stable Communities
• Invest in clean, safe and reliable energy infrastructures
in the communities we serve;
• Actively engage in stakeholder processes; and
• Be actively involved in communities we serve.
Implement Customer-Focused Solutions
• Help customers address energy costs, make smarter
energy choices, and lower impacts on the environment;
and
• Couple investments with effective regulatory and
commercial actions that promote affordable clean
energy.
Steward the Environment
• Reduce our impact on the environment through pollution
prevention and reduction programs; and
• Implement innovative conservation approaches.
Assure an Engaged, Aligned and Transparent
Sustainability Approach
• Establish goals, measures, and standards that are
tracked and evaluated for success;
• Govern ourselves in a manner that is responsive to the
interests of shareholders and other investors; and
• Publicly report on our sustainability efforts.
NiSource Sustainability Policy
Adopted by the NiSource Inc. Board of Directors
March 22, 2010
INTEGRITY AND
C O R P O R AT E G O V E R N A N C E
We are committed to transparency, straightforward communication,
contemporary governance approaches, and the highest ethical
standards.
NiSource’s Board of Directors is elected by the shareholders and is
charged with overseeing and directing management activities to
enhance the long-term value of the company. The Board regularly
monitors the effectiveness of our management policies and
decisions, and holds senior management accountable for achieving
corporate objectives.
Our Board currently consists of 10 independent directors (as defined
by NYSE rules) and one non-independent director
(Robert C. Skaggs, Jr., our president and CEO). Ian M. Rolland, an
independent board member, serves as Chairman.
Our annual proxy statement and the Corporate Governance section of
nisource.com include additional detailed information about our Board
makeup, committees and other governance practices.
Committees of the Board
Audit
Corporate Governance
Officer Nomination
Compensation
Finance
Environmental, Safety and Sustainability
Stockholders and other interested persons may contact the Board of
Directors by writing to the following address:
NiSource Inc.
Attention: [Board of Directors]/[Board Member]/[Non-management
Directors]/[Lead Director]
c/o Gary W. Pottorff, Corporate Secretary
801 East 86th Avenue
Merrillville, Indiana 46410
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C O R P O R AT E P RO F I L E
OUR
COMPANY
N I S O U R C E C O R P O R AT E
PROFILE
Our Aspiration: The Premier Regulated Energy Company
in North America
NiSource Inc. (NYSE: NI) is an energy holding company
with headquarters in Merrillville, Ind., approximately
40 miles outside of Chicago. Our companies provide
natural gas, electricity and other products and services to
approximately 3.8 million customers located within the
high-demand energy corridor that runs from the Gulf
Coast through the Midwest to New England. Our business
strategy is focused on our core, rate-regulated, assetbased businesses with substantially all of our operating
ELECTRIC
OPERATIONS
GAS
DISTRIBUTION
A Balanced
100% Regulated
Portfolio
GAS
TRANSMISSION
& STORAGE
income generated from the rate-regulated businesses.
NiSource engages stakeholders across our operating
area, including employees, shareholders, customers,
regulatory and public officials, community leaders and
partners, landowners and others in the general public
who are interested in our company, operations, and
services.
Natural Gas Distribution
Our natural gas distribution operations serve more than
3.3 million customers in seven states via approximately
58,000 miles of pipeline and related facilities. Our gas
distribution subsidiaries provide natural gas to residential,
commercial and industrial customers in Ohio,
Pennsylvania, Virginia, Kentucky, Maryland, Indiana and
Massachusetts.
NiSource Inc.
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C O R P O R AT E P RO F I L E
YEAR
TOTAL
NET REVENUES
(GROSS REVENUES LESS
COST OF SALES, EXCL. DEPR.
AND AMORTIZATION)
7,607
Electric Operations
Our electric business generates, transmits and distributes
electricity to more than 450,000 customers in 20 counties
in northern Indiana, and engages in wholesale and
transmission transactions. Our electric supply portfolio
includes both traditional and renewable generation
7,981
sources, including natural gas, hydroelectric, and coalgenerated supplies, providing for a total system operating
net capability of 3,322 MW.
7,616
Gas Transmission & Storage
Our gas transmission and storage subsidiaries own and
operate about 15,000 miles of interstate pipelines that
transport gas supplies from production and storage
regions to markets across 16 states and the District of
Columbia. We also operate one of the nation’s largest
underground natural gas storage systems, capable of
storing more than 600 billion cubic feet of natural gas for
our customers.
‘07
‘08
‘09
EMPLOYEES
TOTAL
OPERATING
EXPENSES
TOTAL
CAPITALIZATION EQUITY
TOTAL
CAPITALIZATION DEBT
‘09
$3,331.4
$2,545.5
$4,854.1
$5,965.1
‘08
$3,245.7
$2,339.3
$4,728.8
$5,943.9
‘07
$3,186.4
$2279.2
$5,076.6
$5,594.4
IN MILLIONS
NISOURCE SUBSIDIARIES
B AY S T A T E G A S
C OLUM B I A G U L F T R A N SM I S SION
C OLUM B I A G AS OF K E N T U C K Y
N I S O U R C E R E TA I L S E RV I C E S
C O LU M B I A G A S O F M A RY L A N D
C RO S S ROA D S P I P E L I N E
C OLUM B I A G AS OF OH IO
KO KO M O G A S A N D F U E L
C O L U M B I A G A S O F P E N N S Y LVA N I A
NORT H E R N I N DI A NA F U E L A N D L IG H T
C OLUM B I A G AS OF V I RG I N I A
N O RT H E R N I N D I A NA P U B L I C S E RV I C E C O.
C OLUM B I A G AS T R A N SM I S SION
NISOURCE ENERGY TECHNOLO GIES
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B U I L D I N G S U S T A I N A B L E VA L U E
BUILDING
S U S TA I N A B L E
VA L U E T H R O U G H C U S T O M E R -
F O C U SE D E N E RG Y S OLU T ION S
As one of the nation’s leading regulated energy
companies, our sustainability commitment extends beyond
just the safe, reliable and environmentally friendly
operation of our natural gas and
electric facilities. It also includes the
delivery of customer-focused energy
services and programs that recognize
– and are responsive to – the needs
of our customers.
We will be defined by our
ability to provide safe and
reliable service, to comply
with all regulatory
requirements, and to
operate transparently.
Across our business, NiSource team
members are working with
customers, regulators and a broad
range of other stakeholders to find
new ways to deliver value to our wide
array of residential, business, and
industrial customers. These efforts
have resulted in new programs to
support low-income consumers, new
incentives and rate structures that promote conservation
and energy efficiency, and new infrastructure investments
that ensure and enhance our customers’ access to
affordable and clean energy.
These efforts became especially important during the
economic recession, as many of our customers faced
tough financial challenges. In close collaboration with
regulatory, governmental and community partners, we
redoubled our efforts to assist customers affected by the
downturn, with NiSource customers receiving almost
$40 million more in home energy assistance in 2009.
Here are some of the ways we are working to build
sustainable value for our customers:
Enhancing the Customer Experience
Enhancing the customer experience is a key goal across
each of our NiSource companies. From a customer’s first
contact with our company, to the ongoing delivery of
services, we want the process to be efficient, responsive
and respectful of the needs and desires of our broad
range of energy customers.
NiSource Inc.
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E XC E E D I N G C U S TO M E R E X P E C TAT I O N S
Monitoring our progress on this goal is critical to our
success. We track our progress through a variety of
ongoing customer satisfaction surveys and analysis within
each of our customer-facing companies. These initiatives
support a broad array of management systems data within
each of our business units, with certain key metrics rolling
up to NiSource’s Corporate Balanced Scorecard, one way
in which we measure our company performance.
This disciplined approach to
measurement has helped us target
areas for improvement as we design
and implement new customer
programs, services or technology
improvements.
Our goal is to meet
and exceed customer
expectations with solutions
that are thoughtful,
responsive and innovative.
Leveraging New Technology
Our customers expect online tools
and technology to be available to
meet their everyday needs, and we
have taken concrete steps to better
deliver on those expectations. During
the last 12 months, each of our local
gas and electric distribution
companies introduced new, more
customer-focused Web site designs.
The new sites have more self-service options, improved
site navigation, and targeted tools to meet the needs of
our customers. Our customers’ interest in online or other
self-service options has driven tremendous growth in the
use of electronic billing and payment services, with
$1.2 million more payments paid electronically in 2009
over 2008. Looking ahead, social media, mobile
technology and other enhancements are part of our
customer engagement strategy.
Leveraging Technology, Supporting the Environment
In 2010, the NiSource distribution companies and the
NiSource Foundation launched a partnership with the
Nature Conservancy’s Plant-a-Billion Trees program. For
every distribution customer who signs up for Direct e-Bill,
our paper-reducing online billing service, NiSource is
contributing $10 to The Nature Conservancy. This covers
the cost of planting 10 trees as part of the Plant-a-Billion
Trees program for the Atlantic Forest. We’ve pledged up
to $200,000 for the campaign – a total of 200,000 trees
representing contributions on behalf of 20,000 customers.
The reforestation effort will remove 10 million tons of
NI CORPORATE
BALANCED
SCORECARD
CUSTOMER SERVICE
2009
TARGET
OVERALL SATISFACTION
% of natural gas and
electric distribution
customers who say
NiSource company
met or exceeded their
expectations in recent
interaction
88%
2009
2010
ACTUAL TARGET
86%
88%
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O P E R AT I N G S A F E LY A N D R E L I A B LY
O U R PA R T N E R S
“We have had a long partnership with NiSource and its subsidiaries
across Indiana and the eastern United States. This new program
helps us protect vital areas in South America. It will enable us to
dramatically increase the number of trees in the Atlantic Coast forest
in Brazil, enhancing the ‘lungs’ of the world and their ability to absorb
carbon and release oxygen.”
Mary McConnell, State Director
The Nature Conservancy in Indiana
carbon dioxide from the atmosphere every year. That’s
equivalent to taking two million cars off the road.
Investing in Safety and Reliability
To continue to meet our customers’ needs for safe and
reliable energy now and in the future, infrastructure
improvement and replacement programs are being
ramped up to assure a safe and reliable flow of energy.
In 2009, a program to replace aging natural gas delivery
systems continued, replacing approximately 200 miles of
bare steel pipeline to date. We spend millions of dollars
each year in pipeline replacements and upgrades across
our companies.
Columbia Gas of Pennsylvania’s Pipeline to the Future
project consists of replacing about 2,400 miles of aging
natural gas pipelines with the latest in pipeline
technology. The project will last decades and we will
make very large capital investments each year in
connection with this project. The new pipeline will
continue to deliver safe, reliable natural gas to our
customers across Pennsylvania for many generations
to come.
Building Efficiency, Affordability
There are many ways in which we can collectively
address energy costs; we help customers make smarter
energy choices, reduce bills, and lower our impact on the
environment. At NiSource, we are partnering with our
customers – homeowners at all income levels and
businesses – by providing technical and financial
assistance to help them identify and implement energy
efficiency measures and pursuing various strategies
throughout our service territories to encourage wise and
efficient energy use.
Several of the NiSource gas distribution companies also
have obtained regulatory approval for natural gas
conservation trackers as well as rate incentives to
encourage clean-burning, high-efficiency natural gas
power generation such as distributed generation and
cogeneration applications. We’ve also extended and
initiated energy efficiency programs, including:
• Columbia Gas of Virginia’s new 3-year $8.5 million
program expected to save participants $90 to
$350 annually.
NiSource Inc.
9
MANAGING CUSTOMERS’ ENERGY NEEDS
• Bay State Gas plans to spend $56 million over the next
three years on energy efficiency programs, yielding a
savings exceeding 9.8 million therms, more than double
what is currently in place. The new programs will install
energy improvements that will achieve savings for many
years, enabling Bay State customers to realize savings
equivalent to heating approximately 178,797 homes for
one year.
• Columbia Gas of Ohio’s $24.9 million commitment on new
conservation programs over the next three years and the
continuation of the WarmChoice Program, now in its 23rd
year, which helps customers with attic and wall
insulation, high efficiency furnaces, air leakage sealing,
and other energy conservation measures.
We also have a variety of programs to help manage our
customers’ energy needs and increase the energy
efficiency of homes, businesses and appliances,
including:
• Residential Low Income Programs target hundreds of
customers, encouraging them to directly install
weatherization, refrigeration, and lighting applications to
help reduce consumption.
• Residential Energy Harvest Rebate Programs offer
rebates for qualifying energy efficient furnaces, boilers,
water heaters, and thermostats.
• Residential and Non-Residential Energy Efficiency
Rebate Programs encourage customer adoption of
higher than standard efficiency appliances.
• Residential Home Performance Retrofit Incentive
Programs offer incentives for customers replacing their
furnaces who may need additional insulation and
instrumented air sealing.
• Residential New Construction Programs offer incentives
to homebuilders to continue to build homes that are
50 percent more efficient than previous levels.
• Energy Star Certifications offer incentive rebates to
builders that meet home energy rating standards in the
installation of furnaces, boilers, and water heaters.
• Multi-Family Direct Install Programs provide energy
efficient showerheads and aerators in apartments and
mobile-home parks.
NIPSCO:
LOW E ST C O ST PROV I DE R
According to the Indiana Utility Regulatory Commission, NIPSCO
natural gas customers in Northwest Indiana paid the lowest
residential gas prices among 22 companies during 2009––as much
as 40 percent less than other major metropolitan customers.
10 NYSE: NI
PROV I DI NG AS SI STA NC E
• Small Business Energy Efficiency Incentive Programs
offer rebates for standard and specialty energy
conservation measures, including high-efficiency
heating system and air sealing, and water heating saving
measures.
• CFL Promotion Campaigns provide free compact
fluorescent light bulbs in bulk for customers at targeted
events and through multiple distribution methods.
Supporting Those in Need
We have enhanced or launched a number of initiatives to
help customers who are facing tough times – especially
challenges caused by the economic recession.
The NiSource local distribution companies are actively
supporting and implementing the Low-Income Home
Energy Assistance Program (LIHEAP), the federally
funded, state-administered social services program that
offers financial assistance to qualifying low-income
households who require support in paying their home
heating or cooling bills.
Applicants must have an income less than 150 percent of
federal poverty level or 60 percent of state median poverty
level to be eligible. In fact, about three out of four
households that are helped by LIHEAP earn less than
$15,000 a year and half earn less than $10,000 a year. Our
Web site and customer service representatives provide
payment-troubled customers with information on LIHEAP
and other local energy assistance programs.
NiSource customers received more than $100 million in
LIHEAP funds in fiscal year 2009, an increase of nearly
$40 million over the prior year.
TOTAL
2007/2008
2008/2009
% CHANGE
$61,706,815
$101,577,296
64.61%
We have an array of other initiatives to help address
energy costs. For example, NIPSCO has extended to 2012
its popular Natural Gas Choice Program, which offers
customers an opportunity to choose among 12 alternative
natural gas suppliers. Another key initiative is Winter
NiSource Inc. 11
SUPPORTING THOSE IN NEED
Warmth. This program has assisted approximately 45,000
qualifying low-income NIPSCO gas customers with the
payment of delinquent utility bills and natural gas
deposits. Since its inception in 2004, the program has
provided approximately $25.4 million in assistance to more
than 70,000 customers across Northern Indiana.
In response to the economic challenges our customers
and communities face, we also increased our commitment
to our NiSource-wide initiative, Supporting Those In Need,
which brings together the company, our employees and
the NiSource Charitable Foundation to contribute to local
organizations.
NiSource’s local operating companies and employees
have long been a strong, positive force in the communities
where we operate and provide service. During these
difficult times, we felt it was more important than ever to
provide strong corporate-wide support. Through the
Supporting Those In Need campaign, we are focusing and
leveraging our various giving channels to have an even
greater impact in the community.
Among more than 120 programs across six states, we
support shelters and transitional housing efforts in Central
Ohio and Maryland, food banks in Lexington and
Pittsburgh, low-income child care programs in Springfield,
Massachusetts, and efforts to supply food, clothing,
shelter and other basic needs to individuals and families
across our service areas. In 2009, NiSource pledged more
than $2 million to these efforts and contributions of more
than $3.5 million are expected in 2010.
Ready to Respond
Our energy delivery systems are occasionally tested by
natural events – blizzards, ice storms, tornadoes, floods –
or other operating incidents. When events of that type
occur, our highly-trained teams are ready to respond.
NiSource maintains an enterprise-wide Business
Continuity Plan to mitigate interruptions of service to
customers, operations and mission critical business
functions. The plan addresses a broad range of response
plans and capabilities related to crisis and incident
management, health threats, emergency response,
evacuations, technology recovery, and physical security.
O U R A P P ROAC H
"These are unprecedented economic times. This multi-faceted
approach to corporate philanthropy is important in responding to the
realities of our economy and the impact it has had on our customers
and communities."
Glen Kettering, NiSource Senior Vice President of Corporate Affairs
and NiSource Charitable Foundation Trustee
Supporting
Tho
d
se In Nee
12 NYSE: NI
RISING TO THE CHALLENGE
In support of this effort, NiSource periodically conducts
business impact analyses, which identify critical business
processes, resources and infrastructure to assist us in
evaluating the operating, financial, legal, and reputation
risks if business processes, resources and infrastructure
are unavailable for a given period of time.
How successful is our planning structure? Consider what
unfolded in Macon County, Tennessee in February 2008.
As the result of a direct hit of a tornado, an entire mainline
compressor station on our Columbia Gulf Transmission
system was destroyed, and with it almost one-third of our
peak winter gas delivery capacity.
Thankfully, members of our Hartsville Compressor Station
team were safe, as they and other trained team members
across our company quickly moved into action to execute
our emergency response plans. Through close
coordination within our company and with the community,
customers and industry peers, we were able to restore
service on the Columbia Gulf System (although at reduced
capacity) within 72 hours.
Within less than five months, our Hartsville Station had
been restored to full capacity. The rebuild effort involved a
$100 million investment, and included the installation of
more environmentally friendly turbine equipment.
Losing a mainline station could have been a major blow to
the company and our customers, but with planning,
preparation, commitment, and perseverance, our team
rose to the challenge.
Columbia Gulf Transmission’s Hartsville Station
Macon County, Tenn.
NiSource Inc. 13
B U I L D I N G S U S T A I N A B L E VA L U E
BUILDING
S U S TA I N A B L E
VA L U E T H R O U G H
E N V I R O N M E N TA L
S T E WA R D S H I P
Building a cleaner, more efficient and affordable energy
future is core to NiSource’s environmental goals and our
overall sustainability approach. We operate one of the
nation’s largest transportation and
delivery systems for natural gas and
continue to grow our system. We
must balance this growth with
reducing environmental impacts and
implementing energy-efficiency
measures for our customers.
In our electric operations, we
continue to invest in technology to
reduce impacts from our generation
fleet. We have been able to move
toward cleaner energy delivery,
enhancing biodiversity, preserving
habitat, restoring impaired properties,
and revitalizing urban and natural
areas.
Our goal is simple:
to build a cleaner,
more efficient and
affordable energy future.
Our environmental stewardship goal is simple: to build a
cleaner, more efficient and affordable energy future.
A History of Ensuring Environmental Stewardship
In the early 1990s, NiSource established a Board-level
committee to review performance and address
environmental, health and safety and more recently,
sustainability matters. As a result NiSource has
established Board-level policies that guide overall
management of environmental, health and safety, climate,
and sustainability.
In 1997, we began to employ environmental management
systems certified to the ISO 14001 International Standards.
And in October 1998, NIPSCO became the first North
American utility to certify all of its facilities under this
system. By the end of 2005, this management system
model was implemented and certified in all of our
business segments. Today, our management systems have
transitioned from the formal ISO framework, placing an
increased emphasis on current/best practices and
supporting continual improvement.
Photo by Ron Trigg, Shirley Heinze Land Trust
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TAC K L I N G C L I M AT E C H A N G E
As a result of these, and many additional efforts, in
2009, NiSource was recognized by Newsweek magazine
for our strong environmental
practices and management systems.
In Newsweek’s “Green Rankings” of
the nation’s largest corporations,
NiSource was ranked fourth overall
out of the 37 largest U.S. utilities and
first for its environmental policies and
performance.
Newsweek ranked
NiSource first among
utilities for our
environmental policies
and performance.
S T E WA R D S H I P H I G H L I G H T S
• Enterprise-level focus and management
• A common-sense approach to carbon reduction
• Customer efficiency improvements and usage reductions
• Environmental improvements and initiatives in power generation
• Greenhouse gas emissions reductions
• Successful remediation initiatives
Tackling Climate Change with
Commitment
NiSource is committed to meeting
current and future environmental
obligations. We have, and will
continue to, aggressively engage in
activities to reduce potential risks
and pursue opportunities associated with policies
enacted to address the climate change issue.
We are committed to further reducing the carbon intensity
of our operations and will meet the energy needs of our
customers through business activities that promote
sustained economic growth in a manner compatible with
our environmental obligations.
NiSource will:
• Remain an industry leader in accurately accounting for
greenhouse gas emissions, and providing timely
reporting and transparency in climate related activities.
• Biodiversity and habitat protection
• Increase the efficiency and reduce the carbon intensity
with which NiSource companies provide energy to our
customers by taking steps to produce and obtain
electricity from sources with lower carbon intensity,
increase natural gas transportation efficiency, and
reduce methane losses from natural gas transmission
and distribution pipeline systems.
• Encourage our customers to use energy wisely by
working with them to develop demand-side management
and energy conservation programs, along with ensuring
that the revenue models under which NiSource
companies recover their costs are aligned with energy
efficiency goals.
Photo by Ron Trigg, Shirley Heinze Land Trust
NiSource Inc. 15
PURSUING CONTINUOUS IMPROVEMENT
Pursuing Continuous Environmental Improvement
• Promote adoption of reasonable policies addressing
climate change. We will support federal legislation on
climate change that:
Carbon Dioxide Emission Reductions
As a charter member of the U.S. Department of Energy’s
Climate Challenge program, we have reduced carbon
dioxide (CO2) emissions by more than 34 million equivalent
tonnes since 1990.
• Recognizes that greenhouse gas reduction targets
must be applicable to all sources of greenhouse gas
and be realistically achievable and consistent with
projected availability of commercial technology.
25.1
12.8
16.9
20.4
22.7
24.7
• Recognizes the environmental benefits of natural gas
and promotes policies and practices that result in the
continued efficient use of natural gas by all
customers.
24.9
We also made a long-term commitment to Natural Gas
STAR, a U.S. Environmental Protection Agency (EPA)
program that encourages voluntary reductions in
methane emissions. Our participation in Natural Gas STAR
saves customers money, reduces our methane emissions
footprint and conserves natural gas. NiSource companies
have implemented many of the recommended best
practices as well as developed new innovative
approaches endorsed by the EPA and other partners.
• Protects against undue increases in energy costs to
any particular geographic regions or groups of
consumers.
8.2
6.0
4.5
3.9
3.2
2.5
1.7
1.1
0.5
CO2 e tonnes
‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08
CUMULATIVE METHANE EMISSION REDUCTIONS
(in millions)
16 NYSE: NI
S U R PA S S I N G TA R G E T S
Since 1993, NiSource companies have reported a savings
of more than 56 billion cubic feet of methane or 25 million
tonnes of CO2 equivalent emissions from this program.
These reductions have the same
environmental benefit as planting
more than 5 million acres of forest or
taking more than 4.7 million cars off
the road for one year.
Since 2003, our sulfur
hexafluoride emissions
have remained less
than 50 percent of
our 1997 baseline, far
surpassing our original
25 percent reduction target.
Sulfur Hexafluoride Emission
Reductions
Working in partnership with the EPA,
NiSource has significantly reduced
the release of sulfur hexafluoride
(SF6), a greenhouse gas, from its
electric transmission and distribution
system. NiSource’s subsidiary
NIPSCO has implemented a SF6
Handling Policy that provides
operating personnel with handling procedures to minimize
the release of SF6. Since 2003, our SF6 emissions have
remained less than 50 percent of our 1997 baseline, far
surpassing our original 25 percent reduction target.
As we continue to expand and update our natural gas
system, our regulatory and commercial initiatives will
promote the concepts of sustainability and greenhouse
gas (GHG) reduction, assuring that natural gas can meet
our customer needs and serve the market and is available
for reducing the nation’s carbon footprint.
1.032
1.010
1.015
1.021
1.046
1.047
1.026
1.015
1.094
tonnes CO2e per MWH
‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09
REDUCTION OF
GREENHOUSE GAS
EMISSIONS
Our growth strategies demonstrate our commitment to
sustainability identified in the NiSource Environmental
Health and Safety and Climate Change Policies that
collectively pledge to “…provide products that are a
solution to reducing our nation’s greenhouse gas
emissions…and address global climate change
challenges with business activity compatible with
sustained economic growth.”
Advancing a Sustainable Electric Generation Fleet
Over the last decade NiSource has transitioned its
electric generation assets toward a more sustainable
profile. The bulk of capital investment for GHG reduction
opportunities has been, and will continue to be, in the
electric business. We initially proposed to reduce GHG
intensity by 7 percent between 2001 and 2012. Through
2009, we have reduced our GHG intensity by 5.6 percent
and are continuing efforts to achieve our goal.
NiSource Inc. 17
PREVENTION PROGRAMS
The most significant changes since 2001 are related to
our continuing effort to secure cleaner external power
commitments and reductions in emissions associated
with internal generation. This includes:
• Ceasing operations of one of our four coal-fired
generating stations in 2001.
• Purchasing Sugar Creek power plant in 2008 – a highly
efficient 535 MW natural gas-fired combined cycle
facility located in Terre Haute, Ind. Sugar Creek can
produce power at approximately half the carbon
intensity of a coal-fired power plant.
• Investing more than $50 million in capital projects
designed to improve the electric generation efficiency of
our existing assets. Projects included electric steam
turbine replacements, turbine control system upgrades,
and neural network artificial intelligence system
installations.
• Adding 100 MW of wind generation capacity.
Select Pollution Prevention Programs
NIPSCO has made significant air emission reductions in
advance of others in the industry. A
70 percent reduction in nitrogen
oxides (NOx), a precursor to ground
Between 2008 and 2009,
level ozone, occurred between 1990
and 2009 as a result of significant
NIPSCO’s nitrogen oxide
investments characterized in three
phases and an investment of more
emissions were reduced by
than $316 million. In Phase 1, as a
half and sulfur dioxide
participant in U.S. EPA's "NOx Early
Election" program, NIPSCO
emissions were reduced
accelerated the installation of low
from 7.93 to 6.08 pounds
NOx burners in its wall and
tangentially fired pulverized coal
per megawatt hour.
generating units. These units
comprise approximately 55 percent of
our generating capacity. In addition,
over-fire air systems were added to further reduce NOx
emissions at all of our coal-fired generating stations.
In Phases 2 and 3, additional NOx emission reduction
measures were implemented. Phase 2 measures include
the installation of Selective Catalytic Reduction (SCR) on
the highest NOx emitting units and combustion control
NIPSCO’s Sugar Creek Station
West Terre Haute, Ind.
18 NYSE: NI
A RECORD OF EXECUTION
NOx reduction technology at each of our active
generating stations. Phase 3 measures include the
annual operation of our SCRs and the installation of low
NOx burners on Schahfer Generating Station’s Unit 15.
Additional upgrades of existing emission controls are
planned in Phase 4 to further reduce emissions.
Between 2008 and 2009, the actual NOx emission rate was
reduced by half, from 4.14 to 2.04 pounds per megawatt
hour. Factors contributing to this significant reduction
include the initiation of year-round operation of the
control equipment on the SCR equipped coal-fired
generating units and use of advanced combustion control
technology on Unit 15. Increased use of the natural gasfired Sugar Creek Generating Station also contributed to
the reductions. In 2010, a NOx control optimization
program is underway that will further improve operation
of existing NOx controls.
Additionally, NIPSCO has been a leader in reducing
emissions of sulfur dioxide (SO2), a precursor to acid rain.
In meeting the requirements set forth by the Clean Air
Act, NIPSCO became the first utility in the U.S. to meet
the Phase 1 SO2 standards.
The bulk of our SO2 reductions occurred in Phase 1 and
Phase 2 of the control program (1990 to 1995). NIPSCO
achieved a nearly 70 percent decrease in emissions as a
result of installation of scrubber technology and
conversion to low sulfur coal. To date, almost half of
NIPSCO’s coal-fired generation capacity is equipped with
SO2 scrubbers, exceeding the national average. Phase 3
of the ongoing SO2 control program includes the upgrade
of existing scrubbers to achieve a control efficiency of
97 percent. NIPSCO has plans in Phase 4 to make
additional investment toward further reducing SO2
1.93
1.12
Phase 1 – Installation of
Combustion Controls
Phase 2 – Installation of SCRs
(Ozone Season Operation)
Phase 1 – Bailly
Scrubber Installation
Phase 2 – Unit 12 & 14
Conversion to Lower
Sulfur Coal
Phase 3 – Annual SCR
Operation and Unit 15
Low Nox Project
Unit 17 & 18
FGD Upgrade
Phase 4 –
Potential FGD
lb NOx/mmBtu
‘90
‘95
‘00
‘05
‘10
NITROGEN OXIDE REDUCTION
HISTORICAL & PROJECTED – ELECTRIC OPERATIONS
‘15
0.375
0.133
Phase 4 – Potential
Unit 15 SNCR
lb SOx/mmBtu
‘90
‘95
‘00
‘05
‘10
SULFUR DIOXIDE REDUCTION
HISTORICAL & PROJECTED – ELECTRIC OPERATIONS
‘15
NiSource Inc. 19
REDEVELOPMENT PROGRAMS
80 percent of ash and gypsum from our electric
generation reused or recycled. Efforts are ongoing to
identify new recycling opportunities across the company.
emissions and providing customers with cleaner
affordable electricity.
From 2008 to 2009, the SO2 emission rate dropped from
7.93 to 6.72 pounds per megawatt hour. Further
reductions are anticipated in 2010 based on the first full
year of operation of the upgraded Unit 18 scrubber and
completion of the performance upgrade of the scrubber
on Unit 17 at Schahfer Generating Station.
Select Brownfield Redevelopment Programs
In an effort to redevelop under and non-used areas,
NiSource actively manages real estate holdings in each
service and operating area with a commitment to
sustainable development. We have implemented rigorous
standards for buying and selling real estate assets, with
all transactions undergoing some level of environmental
review.
To reduce its solid wastes, NiSource has multiple
recycling programs in place, including cardboard, wood
pallets and reels, paper, aluminum and copper wire, scrap
steel, used oil, wood poles, plastic pipe, scrap
transformers and light bulbs. We also recycle byproducts
from the energy process into usable products, with over
NiSource has been involved in brownfield redevelopment
initiatives intended to enhance the economic, social and
environmental value for the community. Brownfields are
0.137
0.169
lbs. NOx /Horsepower Hours
Gas Transmission & Storage engines
continue to be slated for NOx
reductions. Reduction efforts have been
ongoing since the mid-1990’s with
recent reductions being achieved both
through control installations and loweremission, higher efficiency engine
replacements.
‘02
‘03
‘04
‘05
‘06
‘07
‘08
NITROGEN OXIDE REDUCTION
GAS TRANSMISSION & STORAGE
20 NYSE: NI
PA RT N E R I N G W I T H S TA K E H O L D E R S
abandoned, inactive or underutilized industrial and
commercial properties whose redevelopment may be
affected by environmental contamination, either real or
perceived, or other barriers such as back taxes or liens.
We are contributing to this effort by proactively managing
and remediating our own properties and facilitating
redevelopment of others in our service territories. The
program follows a stakeholder outreach process involving
community relations at each site. This allows us to
address site risks, where they exist, in a manner that is
protective and consistent with current and future uses at
a site.
Recent developments include:
• Columbia Gas of Ohio assisted the City of Marion, Ohio,
to secure $2 million in Clean Ohio Revitalization Funding
(CORF) to remediate and prepare for redevelopment a
parcel of land in the city.
Top: Bay State Gas’ Brockton Brightfield Project
Lower: Columbia Gas of Virginia’s Portsmouth Project
• Bay State Gas was a partner in the development of the
Brockton Brightfield Project which included installation
of 425 kW of photovoltaic solar power, converting an idle
brownfield site into a productive generating asset. This
solar array is the largest in New England, generating
over 535 megawatt hours of electricity per year – carbon
free – enough to power more than 70 homes.
• In Portsmouth, Va., Columbia Gas of Virginia recently
completed a multi-year remediation effort that converted
a former manufactured gas plant (MGP) into a park. The
Fort Nelson Park, operated by the City of Portsmouth,
will be the last link in a Historic Trail developed by the
city to celebrate the naval history of the region.
O U R PA R T N E R S
“NiSource’s multi-species, multi-state habitat conservation plan
illustrates how an energy company can meet the growing needs of
its customers and at the same time achieve landscape-level
conservation goals. We applaud NiSource’s forward thinking and are
proud to partner with them on this pioneering plan that blends
economics and the environment.”
Larry Selzer, President and CEO
The Conservation Fund
Select Biodiversity Programs
Our role as an environmental steward is vital in all of our
businesses, especially as it relates to the environment
surrounding our facilities. We’re engaged in partnerships
and other innovative means to protect the ecosystem and
promote biodiversity where we operate.
Habitat Conservation Plan
NiSource is taking a leadership role in protecting
biodiversity by developing a Habitat Conservation Plan
(HCP) for our entire interstate natural gas pipeline system.
NiSource Inc. 21
C O O P E R AT I V E S O LU T I O N S
The HCP is landscape-level conservation and is being
developed together with the U.S. Fish & Wildlife Service.
It covers 43 federally threatened or endangered species
over almost 16,000 miles of pipeline rights of way in
14 states. A comprehensive communication strategy
included outreach to more than 500 federal and state
agencies, environmental organizations and interested
individuals to solicit their input in the development of
the HCP.
In the future, our plans are to work with the ICCWMA
partners to cooperatively manage the natural areas under
their purview as well as NIPSCO ROWs adjacent to the
properties.
2,083
2,763
4,723
5,923
Cooperative Weed Management
NIPSCO manages areas adjacent to its right-of-ways
(ROWs) in partnership with five organizations: The Nature
Conservancy, the Shirley Heinze Land Trust, The National
Park Service, the Indiana Department of Natural
Resources, and Save the Dunes.
In mid-2009, NIPSCO signed a memorandum of
understanding to be a cooperating partner with the
Indiana Coastal Cooperative Weed Management Area
(ICCWMA). The mission of the ICCWMA is to strategically
protect biodiversity and natural communities from the
threats presented by invasive plants within the Lake
Michigan Coastal Zone in Lake, Porter, and LaPorte
Counties in Indiana.
‘04
738
503
Acres
‘05
‘06
‘07
‘08
‘09
SENSITIVE LAND MANAGED OR PRESERVED
CUMULATIVE
22 NYSE: NI
A RECORD OF EXECUTION
Additional NiSource Environmental Performance Metrics
Key Performance
Indicator
Ash & Gypsum
Reused/Recycled (%)
2005
2006
2007
2008
2009
83.02%
82.70%
77.38%
79.68%
80.33%
SO2 Emission Rate
7.80
7.50
7.80
7.93
6.72
2,306
2,251
2,238
2,227
2,275
4.32
4.27
4.33
4.14
2.04
Waste Reused/
Recycled (Tons)
4,820
5,539
6,224
6,866
Not Available
# of Agency Actions
10
14
19
7
7
118.1
92.2
88.5
100.6
105.3
(Lbs/MWhr)
CO2 Emission Rate
(Lbs/MWhr)
NOx Emission Rate
(Lbs/MWhr)
(NOVs, Citations)
*Total Water
Withdrawal (Bil/Gal)
*According to the Electric Power Research Institute, only half of the U.S. utility-owned steam electric generating capacity is cooled with
once-through cooling systems. 73 percent of NiSource electric operations have once-through cooling systems, much better than the
industry average, thereby greatly reducing water consumption and impacts on the environment. The increase in 2008 was the result of the
acquisition of Sugar Creek.
NiSource’s Direct and Indirect GHG Emission Improvements
CO2eq Tonnes
2001 Baseline
2006
2007
2008
NGT&S Combustion
2,032,649
1,435,743
1,707,341
1,672,086
NGT&S Fugitive & Vented
3,954,557
3,993,863
3,434,945
3,881,965
Gas Distribution
1,498,862
1,603,220
1,616,464
1,582,589
Electric Generation
17,599,959
16,745,745
16,919,229
16,763,056
Purchased Power
362,773
1,722,590*
2,992,073
2,459,491
SF6 Emissions
125,593
68,925
55,485
82,311
Mobile Emissions
24,071
23,350
22,372
47,773
Indirect
130,564
122,250
121,206
112,713
Total
25,729,028
25,715,686
26,799,115
26,601,985
* In 2001, NIPSCO ceased operations at one its coal-fired generating stations, resulting in increased power purchase.
NiSource Inc. 23
R E C O G N I Z I NG E N V I ROM E N TA L C OM M I TM E N T
NiSource Companies’ Direct Greenhouse Gas Emissions
Direct GHG Emissions by Category
2001 Baseline
2006
2007
2008
Tonnes/MWhr –
Electric Generation
1.10
1.058
1.055
1.051
Tonnes/Mile of Pipe –
Gas Transmission (Fugitive & Vented)
255.74
257.17
225.24
241.37
Tonnes/Mile of Pipe –
Gas Distribution
27.70
28.41
28.61
28.10
Tonnes/MMBHP–Hr –
Gas Transmission (Combustion)
588.83
590.96
518.95
572.82
Awards for NiSource’s Environmental Commitment
• 2009 – Newsweek magazine ranked NiSource in its “Green Rankings” of the nation’s largest corporations –
fourth overall out of 37 of the largest U.S. utilities and first for environmental policies and performance
• 2008 – Portsmouth MGP – 2008 Governor’s Environmental Excellence Award – Silver Medal for the Fort Nelson Park –
Swimming Point Conservancy
• 2007 – Transmission Natural Gas STAR Partner of the Year, Columbia Gas Transmission
• 2007 – The "James D.P. Farrell Brownfields Project of the Year" award received by the City of Brockton from the
Environmental Business Council of New England
• 2006 – American Council of Engineering Companies Grand Conceptor award received by MACTEC for engineering the
Lewiston Phase II project.
24 NYSE: NI
B U I L D I N G S U S T A I N A B L E VA L U E
BUILDING
S U S TA I N A B L E
VA L U E T H R O U G H S T R O N G ,
S TA B L E C O M M U N I T I E S
O U R A P P ROAC H
"We want to have a long-term impact. Natural gas can play a
significant role in powering a healthy economy and meeting our
national environmental goals far into the future. Our future is really
bright, but only if we can develop the new technologies that will
result in new generations of highly efficient and cleaner end-use
products, and the end use always comes back to appliances—
technology—how to ensure the most efficient and environmentally
friendly use of energy in the home and business."
Robert C. Skaggs, Jr., NiSource President and CEO, and
2010 Chairman of the American Gas Association
O U R PA R T N E R S
“The Community Advisory Panel is like a sounding board. As a
representative, I can tell NIPSCO how the people in my community
feel. If I wasn’t attending these meetings, NIPSCO wouldn’t get our
perspective. The puzzle wouldn’t be complete. The city wouldn’t be
complete. After a meeting, I go back and share information about
energy-related issues with members of the clergy, my congregation
and my community – all customers of NIPSCO. It is very helpful for
them to have this connection. If I can help one person, I’ve
accomplished quite a bit. NIPSCO makes it possible for me to help a
lot of people.”
Pastor Hue Guy
Fort Wayne, Ind.
We have a shared interest in the future strength and
stability of the communities we serve, and we are proud
of our role in helping improve the communities and
environment where our customers and employees live
and work. From our employee volunteers and
philanthropic programs to the environmental integrity and
reliability of our services and operations, we are
committed to focusing on collaborative solutions while
addressing critical needs and building resources for the
future.
Partnering in the Community
NiSource is engaged with communities and stakeholders
across our operating region through many different
efforts. The Community Advisory Panels (CAP) at NIPSCO
involve a cross section of community groups working
together to improve communication and develop an
ongoing dialogue on issues ranging from environmental
concerns to employment. We launched the first CAP at
NIPSCO in 1990 and now have five advisory panels across
Indiana. These panels help us better understand our
communities and build stronger relationships with
community leaders. These partnerships also have resulted
in changes in our operations and policies.
We also have formalized outreach processes in place to
engage local communities and stakeholders on expansion
and improvement projects. Before we start a project, and
at other developmental stages in the process, we reach
out to stakeholders through different activities including
meetings and open houses, mailings, and informational
Web sites to build awareness of the project and begin a
dialogue. We also educate our customers and our
communities served about the steps we are taking to
assure continued safe and reliable energy delivery.
Through our daily work with businesses and individuals to
install, maintain, and improve infrastructure, we are
building employment growth and local business revenues.
We partner with state and local officials to attract future
residential, commercial and industrial opportunities to our
communities. Additionally, NiSource companies pay more
NiSource Inc. 25
PA RT N E R I N G I N T H E C O M M U N I T Y
than $400 million annually in taxes
that directly benefit our local schools
and communities.
Working together with our
stakeholders, we are building strong
community partnerships –
addressing human services,
educational, public safety, and
environmental conservation needs.
Columbia Gas Transmission’s
Appalachian Expansion Project was a
$40 million investment in West
Virginia’s energy infrastructure and
employed about 70 people during
construction, boosting the local
economy and bringing locally
produced natural gas to market.
Building Supplier Diversity
In 2009 NiSource implemented a
supplier diversity program that seeks
out businesses owned by women,
minorities, and veterans, as well as
those located in areas considered to be disadvantaged.
Supplier diversity is about business process
improvements. By opening up competition in the bidding
process, suppliers expand their range of ideas to meet our
needs, which improves overall service levels. We are
currently developing new partnerships and strengthening
existing relationships with national, regional, government,
and utility advisory councils to expand the program.
Assuring Pipeline Safety and Reliability
A stable community is one that is safe, and we are
committed to our employees and communities to provide
the highest standards of safety within and around our
facilities and operations.
Gas control and monitoring center facilities across our
businesses operate 24 hours a day, seven days a week.
We regularly patrol and inspect our systems. Our
operations employees receive regular training, and a team
focused on integrity management of our facilities works to
ensure pipeline safety and compliance. We also work with
emergency responders and agencies to build awareness
of our facilities and on how to respond and what actions
to take in an emergency.
To raise awareness about public safety, we partner with
communities through mailings, meetings and trainings,
and our participation in state One Call programs. Our
outreach in the community takes many forms, including
safety awareness programs. It’s part of our regulatory
mandate but also our responsibility as an operator and a
neighbor in the community.
CALL 811
Homeowners, excavators and contractors throughout the nation
can dial 811 to have underground facilities marked. Placing a
call gets your underground utility lines marked for free. Knowing
where lines are buried before digging protects you from injury,
expense and possible penalties.
EMERGENCY RESPONDERS
Our outreach to community emergency responders takes many
forms, including training, educational pieces, and charitable
contributions. In 2009, NiSource’s Gas Transmission & Storage
companies donated nearly $100,000 to support local fire
departments.
26 NYSE: NI
STRENGTHENING COMMUNITIES
Engaged Employees Strengthening their Community
The NiSource Dollars for Doers program supports
employee volunteers and the organizations to which they
donate their time. For each hour volunteered by a
NiSource employee, the organization receives $20, up to
$500 per employee annually. In 2009
NiSource contributed more than
$61,000 to organizations through this
program. From fundraising events to
The Dollars for Doers
food drives, to serving on nonprofit
boards and tutoring, and to countless
program helps ensure
other efforts, our team members
the company is supporting devote their time and talents to help
build their communities.
the organizations
our employees care
about most.
Dollars
Stronger Communities through
Charitable Giving
The mission of the NiSource
Charitable Foundation is to help
create strong and sustainable
communities where our employees
and customers live and work.
Working with employees and community partners, the
Foundation provides funding and encourages volunteer
support for nonprofit organizations in four primary areas:
community vitality and development;
environmental and energy sustainability;
learning and science education;
and public safety and human services.
for Doers
In 2009, in addition to the contributions of our operating
companies, the NiSource Foundation contributed over
$1 million to community organizations.
We also support our employees through the NiSource
Employee Scholarship Program. The program awards
scholarships of $1,000 per year for up to four years of fulltime, undergraduate college and recognizes student
accomplishments in academics and in contributions made
to their school and community. In 2009, 15 students were
newly awarded scholarships.
NiSource Inc. 27
B U I L D I N G S U S T A I N A B L E VA L U E
BUILDING
S U S TA I N A B L E
VA L U E T H R O U G H E N G A G E D ,
ALIGNED AND SAFE TEAMS
Core to our business is the ability to attract, retain and
maintain an engaged and safe workforce. NiSource’s
more than 7,500 employees working in 13 states are
engaged in challenging and rewarding careers across
nearly all facets of the energy industry. From a wide range
of engineering and other professional fields, to operations,
technical, commercial, financial, and administrative roles,
the NiSource team is among the nation’s leaders in
delivering safe, reliable energy to the customers and
communities we serve. Engaged, safe and aligned teams
are part of the foundation of a sustainable business. It
starts with our core values and business ethics.
Good Ethics. Good Business.
At NiSource, we believe that good, ethical business
conduct is the foundation of our
workplace. Our reputation ultimately
rests on the good judgment and
personal integrity of each of our
employees, officers, directors, and
Our work environment and culture
those with whom we do business. We
are grounded in values that will
believe that our core values –
continue to help us achieve our
fairness, honesty, integrity and trust –
vision: teamwork, pride,
must at all times guide our decisions,
actions and conduct.
empowerment, accountability,
safety, growth and development,
The NiSource Code of Business
and reward.
Conduct is the foundation of our
compliance program and is designed
to provide guidance on how we apply
our values to our business. It helps us
ask the right questions and make the
right decisions. Annual training on our ethics program is
required of all employees.
Safety First
Our primary responsibility is to ensure personal and public
safety, and our top objective is to send our employees
home safe and healthy every day. We are focused on
continual improvement and are working to become a top
performer compared to our industry peers with regards to
safety. Our managers and employees set consistently high
standards and expectations for safety performance.
28 NYSE: NI
B U I L D I N G A S A F E T Y C U LT U R E
S A F E T Y AWA R D S
2009
American Gas Association (AGA) Safety Achievement Award
Columbia Gas of Ohio
DART Rate
AGA Safety Achievement Award
Columbia Gas of Maryland
Vehicle Safety
AGA Accident Prevention Certificates
Crossroads Pipeline, Columbia Gulf Transmission, Columbia Gas
of Pennsylvania, Columbia Gas of Kentucky, Columbia Gas of
Virginia, Northern Indiana Fuel and Light
2008
AGA Safety Achievement Award
Crossroads Pipeline and Northern Indiana Fuel & Light
Vehicle Safety
AGA Safety Achievement Award
Columbia Gas of Maryland
DART Rate
AGA Industry Leader Accident Prevention Certificates
Columbia Gulf Transmission, Northern Indiana Fuel & Light,
Columbia Gas of Ohio, Columbia Gas of Kentucky,
Columbia Gas of Virginia, Bay State Gas
2007
AGA Safety Achievement Award
Granite State Transmission Company
Vehicle Safety – Transmission
AGA Accident Prevention Certificates
Columbia Gas of Pennsylvania, Columbia Gas of Virginia,
Kokomo Gas and Fuel, Northern Indiana Fuel and Light, Granite
State Transmission Company, Crossroads Pipeline
2006
AGA Accident Prevention Certificates
Columbia Gas of Virginia, Columbia Gas of Maryland,
Columbia Gulf Transmission
Efforts to improve employee health and safety have
resulted in record numbers of hours worked without a
day-away injury at several of our facilities. In addition,
we’ve received recognition from industry/government
associations for achieving incident rates below the
industry average for several of our businesses. These and
other benchmarking opportunities provide valuable insight
into the practices that are working well within our
organization, but more importantly, they provide
opportunities to identify best practices that can further
improve our safety performance.
Some of the steps we’ve taken to improve safety
performance include:
• Bi-weekly discussions with management to identify and
communicate results of root cause analysis
investigations
• Increased engagement of front-line leaders with
employees through worksite safety inspections and
training
• Development of reference manuals for field use in
identifying task-specific hazards
• Implementation of company-wide “Supervisor Safety”
days
• Development of specific “Life Saving Rules” for
personal accountability
• Continuation of the “Best Practice” program to evaluate
tools, equipment, operational processes, and vehicles.
In 2009, management, supervisory and employee
leadership in safety programs resulted in a 14 percent
overall improvement from 2008 and the fourth consecutive
year of reductions in employee injuries. Common industry
benchmarks used to measure performance are the
Occupational Safety and Health Administration's (OSHA)
Incident Rate, which includes all work-related injuries
and illnesses, and the OSHA Days Away, Restricted or
Transferred (DART) rate, which includes days away from
work cases in which employees are on restricted job
duties and cases in which employees are transferred out
of their current position because they are physically
unable to perform their job duties due to an injury.
NiSource Inc. 29
FOCUSING ON EMPLOYEES
Compared with the latest Bureau of Labor statistics for Incident rates and DART rates in our sector, NiSource is
approximately 12 percent below the industry median for OSHA Incident rate and 31 percent below the industry median for
DART rate. We have not reached top performer in our industry.
Our goal for incidents will always be zero. As part of our disciplined approach to measurement, we have set milestones that
continue to focus on improving the health and safety of our employees and improving in these areas.
To achieve the 2010 goals, our companies are focusing on several key program areas including improving ergonomic focus in
several areas, root-cause investigation training, safe driving, fleet vehicle safety improvements, as well as several pilots on
operating equipment design.
Focused on Employee Engagement
In addition to safety, engagement of our employees is essential to our business. Our annual employee engagement survey is
one of the key tools we use to help ensure a strong foundation of engaged, aligned and safe employees. The results are used
to learn more about how we can meet the needs of our diverse workplace and improve our business performance. We
measure our results at the corporate level and then work across the organization to improve performance. We did not reach
our target in 2009, receiving a 67 percent favorable overall rating.
SAFETY
2009
MILESTONE
2009
ACTUAL
2010
MILESTONE
OSHA
INCIDENT RATE
2.87
3.32
2.86
DAYS AWAY
RESTRICTED OR
TRANSFERRED RATE
(DART)
1.57
1.76
1.42
Note: Incident rates are one method of showing the relative level of injuries and illnesses among different industries or
operations within a single firm. Because a common base and specific time period is involved, these rates can help determine
both potential problem areas and progress in preventing work related events. The incident rates are derived from the following
formula: (Number of Injuries and illnesses x 200,000) / Employee hours worked = Incident Rate.
30 NYSE: NI
EXECUTING ON OUR PLAN
There were several key findings in the 2009 survey.
• We have excellent participation, with 89 percent of
employees responding.
• We have a strong foundation of engaged, aligned and
safe employees. Research indicates that organizations
with engagement scores above 65 percent consistently
deliver better business results. Through a continued
focus on follow-up and action planning, we hope to see
our overall rating reach 70 percent agreement in this
measure in 2010. To measure overall employee
engagement, we include categories of communication
and coaching; involvement and commitment; recognition
and rewards; personal development and growth; and
execution and business results.
From front line supervisors
to senior management,
strong leaders are the key
to engaging employees,
executing on our plan
and delivering results
for our customers
and shareholders.
• Our highest rated item continues to
be "People in my work group take
personal responsibility for safe work
practices." We also continue to see
higher levels of agreement in this
area and will continue to work to
reach 100 percent agreement. Safety
of our employees, customers, and
communities is our top priority.
• We improved in areas including
"People in my work group are
accountable for delivering results,"
and, "My co-workers routinely
demonstrate a high level of energy
and effort on the job."
• We identified areas where we need to continue to
improve:
• "I have the opportunity for personal development
and growth."
• "I receive appreciation when I do a good job."
Building Capabilities for Now and the Future
As we aim to improve engagement, we also offer a
number of work/life and career-related programs. Our
success depends on the best efforts of every member of
our team, and we offer support and resources to help our
employees achieve goals at work and in life. Our benefits
package helps our employees achieve a sustainable
NiSource Inc. 31
B U I L D I N G C A PA B I L I T I E S
balance between their home and work life; protect their
health and well-being; secure a future for their family; and
maximize their potential through continuous learning
opportunities.
We offer employees a variety of programs to help manage
the complexities of life including:
• Dependent Care Flexible Spending Accounts, that allow
pre-tax contributions up to IRS limits to help cover the
cost of child care
• Employee Assistance Programs that provide valuable
resources and referral information to help manage
difficult issues that may affect work and personal life
• Paid vacation and holidays
• Flexible work schedules, where the type of work allows
• Work-at-home options for specific positions
• Discounts from community
businesses
• Adoption assistance.
NiSource also provides employees a
flexible range of plans and options
that enables our employees to take
charge of healthcare decisions and
choose the level of coverage,
deductible, and contributions that
are best for their needs. In addition
to medical and prescription drug
coverage options, we offer dental
care and vision plans, healthcare
flexible spending accounts, and
short-term and long-term disability
coverage.
In 2009, we launched a new
career site, providing
applicants with detailed
information about our
careers, companies, culture
and benefits.
Our retirement and financial programs include an
employer match of contributions to 401(k) and annual
profit participation program. We also provide companypaid life, accidental death and dismemberment, and
travel-accident insurance.
32 NYSE: NI
BUILDING CAREERS
Building Careers and Leaders
Employee and leadership development and succession
planning are keys to the future success of our company.
To help employees maximize their potential and grow their
careers, many different tools are available. Performance
management is an ongoing process through which we
share annual goals, identify and build employee skills
necessary to execute our plans, and
proactively manage our progress.
All employees receive companyprovided training needed to perform
their jobs. One of our training tools is
a performance-based instructional
delivery system that meets the
standards and guidelines established
by the International Association for
Continuing Education and Training. An
electronic Learning Management
System (LMS) is another key
component in our training program. It
is our online system used to facilitate
and track completion of all required
training courses to ensure
compliance with applicable regulations and also houses
many other developmental training courses and provides
opportunities for professional and skills development. The
LMS shows an employee’s learning history as well as a
catalog of training topics that are available in categories
including performance management, business education,
computer skills, customer service, environmental, health
and safety, employee development, leadership, regulatory
compliance, and wellness.
100 percent of employees
at all levels of management
and specialists groups
receive regular
performance and career
development reviews.
WO R K S H O P S
First introduced in 2007, “The Business of Supervising”
workshop is a popular training designed to create a strong
foundation of core knowledge and skills for all leaders, from
front-line to senior executives. More than 200 employees have
participated in the workshop.
BOOT CAMP
Our New Leader Boot Camp is a 16-week training program
designed to meet the needs of new front-line leaders. The
program is designed to ensure that new leaders have the skills
and tools they need to quickly get started in their new roles.
The program includes 4 weeks of training in the field and
12 weeks of classroom instruction. Over 85 leaders have
participated in the program.
We also provide extensive training opportunities – both
on-the-job and classroom experiences – for many
industry-specific positions.
• Online training courses provide courses targeted at new
leaders and include simulations allowing participants to
choose responses and progress through the course
based upon their answers.
• Additional online development modultes provide
resources on 43 different areas of interest to leaders and
includes checklists, guidelines, forms, templates, and
agenda examples that leaders can use.
NiSource Inc. 33
OUR LEADERSHIP MODEL
• Our trade association partners produce and deliver
recorded educational broadcasts, web conferences and
webcasts to aid in the development of our employees
working in our natural gas businesses.
Competency guides and skills assessments to help
aspiring and current leaders identify areas for
development focus also are available online for use
across the corporation and with guides tailored to
specific business unit needs and roles. Leadership
support tools, tips, and checklists on topics ranging from
coaching and mentoring to developing a team, moving
into new leadership roles, and much more also are
available. All of these different programs are available to
employees, and each year, working with their managers,
employees determine personal development areas.
Every year NiSource leaders have the opportunity to
strengthen leadership ranks by participating in a
formalized talent review process, which utilizes a common
approach and method to:
• Assemble a NiSource-wide view of the succession plans
for key leadership positions, as well as direct reports
and other key leadership positions.
• Assess bench strength by identifying high-potential
leadership candidates who are ready to move into key
roles now, or could be ready within three years with
continued development.
• Establish a framework for looking across NiSource to
align potential leader candidates with opportunities
beyond their current organization or function.
• Provide focus and direction for ongoing leadership
development or recruitment efforts to target specific
needs or opportunities within our organizations.
NiSource's Talent Review Process Guide offers
information about the process, the time line, forms and
instructions, talking points, next steps, and a competency
library. This talent review process is one of the tools we
regularly use to help deliver business results through
disciplined performance-management and leadershipdevelopment processes.
LEADERSHIP MODEL
In 2009, a newly developed NiSource Leadership Model was
created, focusing on 12 development areas that are critical to
being an effective leader:
1. Coaching & Mentoring
2. Building Relationships
3. Making Decisions
4. Communications & Conflict Management
5. Customer Relationships
6. Managing Change
7. Visionary Leadership
8. Business Acumen
9. Supervisory Skills
10. Valuing Diversity
11. Safety Awareness
12. Ethics & Compliance
LEADERSHIP NISOURCE
In 2009, NiSource introduced Leadership NiSource as part of
our ongoing strategy to develop leaders. Leadership NiSource
is a unique learning experience that will build critical leadership
capabilities for 15 rising leaders across NiSource during 2010.
This year and in future program years, participants will meet on
a quarterly basis to practice and hone new skills as they
participate as team members, coaches and leaders in situations
where they will help generate improved business results in their
own and other parts of the business.
34 NYSE: NI
D I V E R S I T Y M AT T E R S
DIVERSITY
In 2009, we partnered with the Women’s International Network
of Utility Professionals in Columbus, Ohio, to provide networking
and mentoring opportunities for our employees, further
complementing our internal efforts.
A 2009 study conducted by The Chicago Network, an
organization of metropolitan Chicago area professional women,
highlighted NiSource for its commitment to gender diversity in
leadership. At NiSource, 19 percent of directors or senior level
executives are women.
Diversity Matters
Diversity and inclusion are essential parts of who we are
at NiSource. Our working environment is one in which an
employee’s unique talents, ideas, and perspectives are
encouraged and respected. It helps us meet our
commitment to customers, and creates richer, more
rewarding careers for everyone on our team.
For example, in our NIPSCO operations, a diversity team
focuses on strengthening environments that recognize,
value, and celebrate differences among employees,
customers and communities while strengthening diversity
within our workforce. Priorities of the team include
continuing to integrate diversity into the candidate
selection process; measuring diversity across the
companies; training employees on the values of diversity;
and celebrating diversity in our organization.
Our participation in associations like the American
Association of Blacks in Energy (AABE) offers leaders the
opportunity to develop personally and professionally. As
an organization dedicated to ensuring African Americans
and other minorities have a voice in the development of
energy policies and regulations, research and
development technologies and in the discussion of
environmental issues, we’re proud to be a part of their
work. Our membership in AABE is just one of the ways we
promote growth and professional networking among our
employees.
NiSource Inc. 35
REPORT INTEGRITY
Preparing and publishing this first annual Sustainability
Report has allowed us to share with our stakeholders the
challenges we face and the steps we are taking to build
sustainable value at NiSource.
We made an executive level-decision to improve our
environmental and social performance by
comprehensively reviewing what we do and how we do it.
This enhanced sustainability report grew out of our longterm commitment to our stakeholders.
The information included is drawn from our established
performance tracking and reporting, as well as new
systems of review and engagement designed specifically
for this analysis.
Assurance
To help guide the process, a Sustainability Task Force was
established to lay the report foundation and coordinate
the process of developing the report. The Task Force
engaged senior management as well as employee
advisory teams from across our organization. We worked
with our Executive Council and Board of Directors for
review, guidance and approval.
Going forward, we are considering expanding the
discovery process by using third party verification and
audits, as well as utilizing external advisors from our
various stakeholder groups to review and comment on the
report in advance of publication.
GRI Content Table
This report was produced using the Global Reporting Initiative (GRI) Reporting Guidelines. NiSource self declares that this
report meets the requirements of GRI Application Level C.
Continued
36 NYSE: NI
REPORT INTEGRITY
Corporate Headquarters
NiSource Inc.
8 0 1 E a s t 8 6 t h Av e n u e
Merrillville, IN 46410
w w w. n i s o u r c e . c o m