1. Credit coring A Help to Low Income Customers
Presented by
Larry Nowicki
Manager, Regulatory Compliance
Thursday, June 16, 2005

2. ABOUT NISOURCE
Fortune 500 holding company headquartered in Merrillville, Indiana.
15 subsidiary companies engage in natural gas transmission, storage & distribution as well as electric generation, transmission & distribution.
Deliver energy to more than 3.7 million customers in high energy corridor stretching from the Gulf Coast through the Midwest to New England.
Over 16,000 miles of interstate transmission pipeline; 55,000 miles of distribution pipeline.
Over 9,000 employees.
Income from continuing operations of $430 million in 2004.
Mike

3. ABOUT NISOURCE
Northern Indiana Public Service Northern Indiana Fuel & Light
Kokomo Gas
Customers
Electric - 443,000
Gas – 776,000
Bay State Gas/Northern Utilities
Customers
Mass. – 279,000
N.H. – 26,000
Maine – 24,000
Columbia Gas
Customers
Ohio – 1,400,000
Pennsylvania – 401,000
Virginia – 209,000
Kentucky – 141,000
Maryland – 32,000
Mike

4. Low-Income Customers 70,038 Average number of low-income customers.
357,006 Average All Residential Customers

5. Credit Scoring Timeline
2000
2002
2003
2004
Pilot
Program
CAP Open Enrollment
Chapter 14

6. JOE
SCHMO

7. JOE SCHMO

8. JOE SCHMO
222 W MAIN RED LION

9.
JOE SCHMO
222 W MAIN RED LION

10. Application Process First Contact with Customer Screening
Early referrals to Universal Services

11. Results Accounts scoring 750 or less in years 2003 and 2004. 2003 2004
44%
32%
% of customers scoring < 750 identified as level 1 or 2. 3% 2%
% of customers scoring < 750 identified as level 3 or 4.
53%
66%
% of customers scoring < 750 not identified (never obtained financial info).
Accounts scoring >= 750 connected in years 2003 and 2004.
2003
2004
12% 8%
% of customers scoring >= 750 identified as level 1 or 2. 2% 1%
% of customers scoring >= 750 identified as level 3 or 4.
86%
91%
% of customers scoring >= 750 not identified (never obtained financial info).

12. Results
Verification
11% of customers who were credit scored were low income

13. Results Number of applicants scored 131,029
Columbia Gas of Pennsylvania Inc. Credit Scoring Pilot Program Report Summary of Period June 2001 Through October 2003
Number of applicants scored
131,029
Number of applicants with passing scores
82,107
Number of applicants with failing scores
48,922
Number of deposits obtained
44,735
Number of deposits waived
5,381
Waivers due to credit score error 49
Waivers due to improvement in credit score 26

14. 5,381 X $162 = savings for low income
Results
Waived deposits
Number of deposits X average deposit amount
5,381 X $162 = savings for low income
customers

15. 5,381 X $762 = avoided costs to utility for charge-off
Results
Number of deposits waived X average CAP Charge-off
5,381 X $762 = avoided costs to utility for charge-off

16. Results Other utility bottom line benefits Cash working capital
Reduced collection costs due to early identification

17. Results
Fewer complaints
17 complaints over four years

18. Results Affordable benefits
CAP payment credit ($51) X number of waived CAP security deposits = total payment credit for CAP customers who were credit scored

19. Benefits of Credit Scoring
Waived security deposits
Affordable payment plans
Energy assistance
Building good credit
Promotes goodwill with company

20. Credit Scoring
vs.
Low Income Help
Utility Benefit
WIN/WIN