For Immediate Release
Contacts:
Charles Storer
Robert Marston Corporate Communications, Inc.
For American Securities Capital Partners LLC
212) 371-2200 ext 319

Mark Hall
Senior Vice President, External & Environmental Affairs
Private Power
(630) 371-0505

American Securities Capital Partners, Private Power
Complete Acquisition of Primary Energy Assets

NEW YORK, October 20, 2003 –American Securities Capital Partners LLC (“ASCP”), a New York private-equity investment firm, and Private Power LLC (“Private Power”), a privately held developer, owner and operator of on-site combined heat and power, recycled energy and district energy projects, announced today they had completed the acquisition of six operating subsidiaries of Primary Energy, Inc. , a subsidiary of NiSource Inc. (NYSE: NI).

The value of the transaction was approximately $335 million in cash and assumed debt.

The six subsidiaries operate facilities that have the capacity to generate approximately 900 megawatts of combined electric and thermal energy by recycling blast furnace gas and waste heat from coke ovens and gas-fired power generation. The facilities operate under long-term contracts with United States Steel, Ispat Inland Inc. and International Steel Group and are all located in Northern Indiana.

The acquisition was completed through a newly formed company called Primary Energy Holdings LLC (“Primary Energy”), based in Oak Brook, Illinois. ASCP will hold a controlling interest in the new enterprise.

Thomas R. Casten, founder of Private Power and chief executive officer of Primary Energy Holdings, said, “Our strategy will be to build on the Primary Energy assets to acquire and develop other energy recycling projects that generate profits and at the same time reduce our customers’ operating costs, fuel use and pollution. We have great confidence in the Primary Energy banner, given the industry’s recognition of the innovative nature, the efficiency and the effectiveness of the projects we are acquiring.”

Casten said that Primary Energy Holdings was actively seeking additional opportunities to acquire and/or develop on-site combined heat and power, recycled energy and district energy projects.

Most of the top Primary Energy Inc. managers will join the new “Primary Energy,” including Joe Turner, who will serve as executive vice president of Primary Energy Holdings and president of its operating subsidiary, Primary Energy Steel.

“We welcome the opportunity to join forces with Private Power and ASCP,” said Turner. “Working with the team at Primary Energy Holdings, we will be able to continue to provide value-added solutions to our host steel plants, and pursue additional development opportunities that leverage our expertise in combined heat and power projects.”

Michael G. Fisch, president of ASCP, said, “We are fortunate to be able to partner with the experienced team from Private Power to acquire distributed power-generation assets. As the first acquisition, Primary Energy is a perfect fit with this strategy.”

The transaction includes:

•    Cokenergy, Inc., a 95-MW CHP facility that converts waste coke oven heat to provide electricity and process steam to Ispat Inland’s steelmaking operations in East Chicago, Ind.;

•    Lakeside Energy Corp., a 161-megawatt (MW) CHP facility that uses steam produced from blast furnace gas to provide electricity and process steam to United States Steel’s Gary Works in Gary, Ind.;

•    North Lake Energy Corp., a 75-MW steam turbine generator that uses steam produced from blast furnace gas to provide electricity to Ispat Inland in East Chicago, Ind.;

•    Ironside Energy LLC, a 50-MW facility that uses steam produced from blast furnace gas to provide steam and electric power to International Steel Group’s (ISG) operations in East Chicago, Ind.;

•    Portside Energy Corp., a 63-MW trigeneration facility that supplies process steam, hot softened water and electricity to United States Steel’s steel finishing operations in Portage, Ind.;

•    Harbor Coal Company, a 50 percent general partner in PCI Associates, which uses waste heat from blast furnace stoves to dry pulverized coal for injection into Ispat Inland’s blast furnace in East Chicago, Ind.

American Securities Capital Partners LLC is the private-equity investment arm of American Securities, a family office founded in 1947 by the late William Rosenwald to manage his share of his family’s Sears Roebuck fortune. ASCP is currently investing its third private-equity investment fund with outside investors, and manages over $1 billion of equity capital on a discretionary basis. Additional information is available at ASCP’s web site, www.american-securities.com.

Private Power, now renamed Primary Energy Holdings (Primary Energy), is based in Oak Brook, Illinois, and develops, owns and operates decentralized generation projects for industrial, commercial and institutional customers throughout North America. Additional information is available at www.privatepower.net.