Pricing Supplement No. 003               Filing under Rule 424(b)(2)
Dated June 3, 1997                       Registration No. 333-26847

(To Prospectus dated May 28, 1997)

$217,692,000
Northern Indiana Public Service Company
Medium-Term Notes, Series E
Due 1 to 30 Years From Date of Issue
____________________

Principal Amount:                       $1,000,000          

Trade Date:                             June 3, 1997

Original Issue Date:                    June 6, 1997

Interest Rate:                          7.35%

Stated Maturity Date:                   June 8, 2009

Form :                                  XX Book Entry    ___ Certified

Interest Payment Date(s):               March 15, and September 15 

Specified Currency:                     U.S. Dollars

Selling Agents Commission:              $6,250

Net Proceeds to the Company:            $993,750


The Medium-Term Note described in this Pricing Supplement is being sold
through Goldman Sachs & Co., as Agent.

Prior to the date of this Pricing Supplement, no Medium-Term Notes,
Series E, have been sold.  Concurrently herewith, the Company is also
selling (1) $12,000,000 aggregate principal amount of Medium-Term Notes
with a Stated Maturity Date of June 6, 2007 and bearing an interest 
rate of 7.25% at the initial price to the public equal to 100% of par,
less a fee to Goldman Sachs & Co., as Agent, equal to 0.625%; (2) 
$20,000,000 aggregate principal amount of Medium-Term Notes with a
Stated Maturity Date of June 7, 2027 and bearing an interest rate
of 7.69% at the initial price to the public equal to 100% of par, less
a fee to Goldman Sachs & Co., as Agent, equal to 0.75%; (3) $10,500,000
aggregate principal amount of Medium-Term Notes with a Stated Maturity
Date of June 6, 2002 and bearing an interest rate of 6.92% at the 
initial price to the public equal to 100% of par, less a fee to 
Merrill Lynch & Co., as Agent, equal to 0.50%; (4) $22,500,000 
aggregate principal amount of Medium-Term Notes with a Stated Maturity 
Date of June 12, 2017 and bearing an interest rate of 7.59% at the
initial price to the public equal to 100% of par, less a fee to
Merrill Lynch & Co., as Agent, equal to 0.75%; and (5)$33,000,000 
aggregate principal amount of Medium-Term Notes with a Stated 
Maturity Date of June 7, 2027 and bearing an interest rate of 
7.69% at the initial price to the public equal to 100% of par, 
less a fee to Morgan Stanley & Co. Incorporated, as Agent, equal 
to 0.75%.

Goldman, Sachs & Co.

Merrill Lynch & Co.

Morgan Stanley & Co. Incorporated