Pricing Supplement No. 012                 Filing under Rule 424(b)(2)
   Dated March 27, 1997                        Registration No. 333-22347

   (To  Prospectus  dated  March  18, 1997,  supplemented  by  Prospectus
   Supplement dated March 21, 1997)

                                $300,000,000
                        NIPSCO CAPITAL MARKETS, INC.
                              Medium-Term Notes
                 Due Nine Months or More From Date of Issue
                            ____________________

               Entitled to the benefit of a Support Agreement
           Providing for the Payment of Principal and Interest by
                           NIPSCO Industries, Inc.
                            ____________________

                                          
     Principal Amount:          $15,000,000        Interest Payment Date(s):      March 15, and
                                                                                            September 15 
     Trade Date:                March 26, 1997
                                                   Specified Currency:            U.S. Dollars
     Original Issue Date:       April 1, 1997
                                                   Selling Agent s Commission:    $93,750
     Interest Rate:             7.5 %
                                                  Net Proceeds to the Company:   $14,906,250
     Stated Maturity Date:      April 02, 2007

     Form :   XX  Book Entry ___ Certified
             ---

   


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

   Prior to the date of this Pricing Supplement, $128,000,000 Medium-Term
   Notes  have been  sold.    Concurrently herewith, the  company is also
   selling  (1) $10,000,000  aggregate  principal  amount of  Medium-Term
   Notes  with a  Stated Maturity Date  of April  2, 2007  and bearing an
   interest rate  of 7.49% at  the initial price  to the public  equal to
   100% of  par, less  a fee to   Morgan  Stanley & Co.  Incorporated, as
   Agent, equal to 0.625%; (2) $ 30,000,000 aggregate principal amount of
   Medium-Term Notes  with a  Stated maturity Date  of April 2,  2004 and
   bearing an  interest rate of 7.4%  at the initial price  to the public
   equal  to 100% of par,  less a fee  to Merrill Lynch &  Co., as Agent,
   equal to  0.6%; (3) $2,000,000  aggregate principal amount  of Medium-
   Term Notes with a Stated Maturity Date of April 3, 2017 and bearing an
   interest rate of  7.93% 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  (4) $1,000,000  aggregate principal amount  of Medium-Term
   Notes  with a  Stated Maturity Date  of April  3, 2017  and bearing an
   interest rate  of 7.94% 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%.

   Goldman, Sachs & Co.


                            Merrill Lynch & Co.
                                                     Morgan Stanley & Co.
                                                     Incorporated