11-K

SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM 11-K

(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from
to

Commission file number 1-9779

NiSource INC.
EMPLOYEE STOCK PURCHASE PLAN
(Full title of plan)

NISOURCE INC.
(Issuer of the Securities)

801 East 86th Avenue, Merrillville, Indiana 46410
(Address of Principal Executive Office)


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of the NiSource Inc.
  Employee Stock Purchase Plan:

We have audited the accompanying balance sheet of the NiSource Inc. Employee
Stock Purchase Plan as of December 31, 1999 and 1998, and the related
statements of income and changes in plan equity for each of the three years
in the period ended December 31, 1999.  These financial statements are the
responsibility of the plan administrator.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the NiSource Inc. Employee
Stock Purchase Plan as of December 31, 1999 and 1998, and the income and
changes in plan equity for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.

/s/ Arthur Andersen LLP

Chicago, Illinois
March 27, 2000




NiSource Inc.
Employee Stock Purchase Plan
Balance Sheet
                                                        December 31,
                                                 _______________________
                                                    1999         1998
                                                 ==========   ==========
                                                        
ASSETS
Employee contributions receivable
  (Note 1d and 2b)                               $  358,565   $  385,097
                                                 ==========   ==========

LIABILITIES AND PLAN EQUITY
                                                        
Amounts payable for purchases of
  common shares                                  $  358,565   $  385,097
Plan Equity                                               0            0
                                                 __________   __________
    Total Liabilities and Plan Equity            $  358,565   $  385,097
                                                 ==========   ==========

The accompanying notes to financial statements are an integral part of
these statements.





NiSource Inc.
Employee Stock Purchase Plan
Statements of Income and Changes in Plan Equity

                                       Year Ended December 31,
                                    __________________________________
                                      1999        1998        1997
                                   ==========  ==========  ==========
                                                  
Plan Equity, Beginning of Year     $        0  $        0  $        0

Increases (Decreases) during
  the year:
    Employee contributions          1,374,223   1,333,010     621,944
      (Notes 1d and 2b)
    Employer contributions            155,639     122,975      69,658
      (Note 2b)
    Purchases of common shares     (1,556,394) (1,229,745)   (696,578)
      (Note 1e)
    Refunds to participants                 0      (1,170)     (4,504)
    Change in amounts payable for
      purchases of common shares       26,532    (225,070)      9,480
                                   __________  __________  __________

Plan Equity, End of Year           $        0  $        0  $        0
                                   ==========  ==========  ==========

The accompanying notes to financial statements are an integral part of
these statements.




NiSource, Inc.
Employee Stock Purchase Plan
Notes to Financial Statements

(1)  DESCRIPTION OF THE PLAN
The following brief description of the NiSource Inc. (NiSource), formerly
NIPSCO Industries, Inc., Employee Stock Purchase Plan (Plan) is provided for
general information purposes only. NIPSCO Industries, Inc. changed its name to
NiSource Inc. on April 14, 1999 to reflect its new direction as a multi-state
supplier of energy and water resources and related services.  Participants
should refer to the Plan agreement for a more complete description of the
Plan's provisions.

(a)  General -
The Plan was established on October 27, 1964, when it was adopted by Northern
Indiana Public Service Company's Board of Directors and became effective on
December 15, 1964.  Effective March 3, 1988, the Plan was assumed by NiSource
and amended to allow participation by eligible employees of NiSource and
certain of its subsidiaries as designated by the Board of Directors of
NiSource.  Employees of IWC Resources, Inc. (IWC), a wholly owned subsidiary
of NiSource, began participating in the Plan as of January 1, 1998.  The plan
is designed to provide a convenient means by which eligible employees may save
regularly through voluntary, systematic payroll deductions and use such
savings to purchase common shares without par value (Common Shares) of
NiSource, at less than the market price.

(b)  Plan Administration -
The Controller of NiSource Corporate Services Company is the administrator
of the Plan and makes such rulings or interpretations as are necessary in
its operation.  NiSource bears all the costs of administering and carrying
out the Plan.

(c)  Eligibility -
Only employees who have one or more years of service with NiSource, or any
participating subsidiary, are eligible to participate in the Plan.
Part-time employees whose customary employment is twenty hours or less per
week and five months or less per calendar year, or employees whose customary
employment is for less than six months in any calendar year are not eligible
to participate.  There were 856, 850 and 447 active participants in the Plan
as of December 31, 1999, 1998 and 1997, respectively.

(d) Employee Contributions -
An eligible employee may authorize payroll deductions in any full dollar
amount, not less than $10 per regular pay period but not more than $20,000
per calendar year.

An eligible employee may enter the Plan at the beginning of any month by
signing and delivering to NiSource Shareholder Services, upon fifteen days
advance notice, an authorization for payroll deductions for the purchase
of Common Shares.  Such authorization must state (a) the amount to be
deducted regularly from each pay check, (b)authority to issue the Common
Shares in each savings period, and (c) the exact name or names in which
the Common Shares are to be issued.  The stock certificates for Common
Shares purchased under the Plan may be issued in the employee's name, or,
if so designated by the employee, in his or her name and the name of
another person, as joint tenants with the right of survivorship, or in a
trust arrangement.  Payroll deductions can be changed only at the beginning
of any month upon fifteen days advance notice.

For purposes of the Plan, the savings periods are the periods during which
participants accumulate savings for the purchase of Common Shares under
the Plan.  Each savings period includes all paydays within that period.
Interest is not paid on payroll deductions while held by the applicable
employer for a participant's account under the Plan. The savings periods
are defined as the three month periods from January 1 to March 31; April 1
to June 30; July 1 to September 30; and October 1 to December 31; inclusive.

(e)  Purchases of Common Shares -
A participant who purchases Common Shares under the Plan will purchase as
many full or fractional shares as is determined by dividing his or her
accumulated savings for the entire savings period by the purchase price per
share for such savings period.  The purchase price per share to participants
is 90% of the closing market price of Common Shares on the New York Stock
Exchange on the last trading day of the savings period.

(f)  Refunds and Withdrawals -
A participant who does not wish to purchase Common Shares in any savings
period must give written notice to NiSource Shareholder Services at least
seven business days prior to the purchase date on which the participant
wishes to terminate.  In such event, all funds credited to the participant
under the Plan will be returned as soon as practicable, and no further
payroll deductions will be made during that savings period.


A participant may withdraw from the Plan at any time upon seven days advance
notice and reenter the Plan at the beginning of any month on fifteen days
advance notice.  Withdrawal shall be made by proper notification to NiSource
Shareholder Services.  Funds credited to the account of a participant not
already used or unconditionally committed to the purchase of Common Shares
will be returned to the participant as soon as practicable after notice of
withdrawal is received.  The participant will also receive either a
certificate for all full Common Shares held in his or her account or at his
or her request a check for such Common Shares.  The participant will also
receive a check for any fractional share held in his or her account.  The
cash value of Common Shares will be the average price on the day of sale
multiplied by the number of shares sold, less fees and commissions.

(g)  Termination of Participation -
Participation in the Plan terminates if the participant's employment is
terminated because of retirement, resignation, discharge, death or any
other reason.  In such event, all funds of the participant under the Plan
not already used or unconditionally committed for the purchase of Common
Shares will be refunded as soon as practicable.  The participant or his or
her legal representative will receive either a certificate for all full
Common Shares held in his or her account or at his or her request, a check
for such Common Shares.  The participant or his or her legal representative
will also receive a check for the cash and any fractional share held in his
or her account. The cash value of the Common Shares will be the average
price on the day of sale multiplied by the number of shares sold, less fees
and commissions.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)  Method of Accounting -
The financial statements of the Plan have been prepared on the accrual basis
of accounting.

(b)  Contributions -
Employee contributions receivable represents amounts due as of December 31,
1999 and 1998, under the terms of the Plan agreement.  Employer contributions
are reflected as 10% of the purchase price of Common Shares in the
accompanying financial statements when the Common Shares are purchased.

(c)  Use of Estimates-
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
financial statements and the reported amounts of income and expenses during
the reporting period.  Actual results could differ from the estimates.

(3)  INCOME TAX STATUS
The Plan is not qualified under Section 401(a) of the Internal Revenue
Code.  No Federal income tax is imposed when a participant purchases shares
under the Plan.  When a participant sells or otherwise disposes of shares
purchased under the Plan, Federal income tax considerations differ,
depending on the length of time the shares were held.  A participant must
notify his or her employer if any Common Shares purchased under the Plan
are disposed of within two years from the date of grant of the right to
purchase or one year from the date of purchase.  Any dividends received by
a participant should be reported as taxable income.

(4)  TERMINATION OR AMENDMENT OF PLAN
NiSource reserves the right to modify, suspend or terminate the Plan,
by action of its Board of Directors as of the beginning of any Savings
Period.  Notice of suspension, modification or termination will be given
to all participants.  Upon termination of the Plan for any reason, the
cash then credited to the participant's account, if any, a certificate
for all full Common Shares held in the participant's Plan Account and
the cash value of any fractional share shall be distributed promptly to
the participant.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Controller of NiSource Corporate Services Company, who administers the
Plan, has duly caused this annual report to be signed on its behalf by the
undersigned thereunto duly authorized.


NISOURCE INC.
EMPLOYEE STOCK PURCHASE PLAN
(Name of Plan)

BY:     /s/ Arthur A. Paquin
        Controller
        NiSource Corporate Services Company

Date:   March 28, 2000

EX-23

Exhibit 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 11-K, into NiSource Inc.'s (formerly
known as NIPSCO Industries, Inc.) previously filed Form S-8 Registration
Statement  No. 33-30619; Form S-8 Registration Statement No. 33-30621; Form
S-8  Registration Statement No. 333-08263; Form S-8 Registration Statement
No. 333-19981; Form S-8 Registration Statement No. 333-19983; Form S-8
Registration Statement No. 333-19985; Form S-3 Registration Statement No.
333-26847; Form S-8 Registration Statement No. 333-59151; Form S-8
Registration Statement No. 333-59153; Form S-3 Registration Statement No.
333-69279; Form S-8 Registration Statement No. 333-72367; Form S-8
Registration Statement No. 333-72401; Form S-3 Registration Statement No.
333-76645 and Form S-3 Registration Statement No. 333-76909.


/s/ Arthur Andersen LLP

Chicago, Illinois
March 28, 2000