Credit

1
Credit Collections Sourcing

• AGA/EEI Customer Service
• Conference Exhibition
• April 1, 2008

2
Agenda

• Overview of NiSource
• NiSource outsourcing large and small
• NiSource Meter to Cash
• Meter to Cash processes outsourcing details
• Management of service providers
• In-sourcing vs. outsourcing
• Summary

3
About NiSource

• Fortune 500 holding company headquartered in
  Merrillville, Indiana
• 16 subsidiary companies engaged in natural gas
  transmission, storage distribution as well as
  electric generation, transmission distribution
• Deliver energy to more than 3.4 million customers
  in high energy corridor stretching from the Gulf
  Coast through the Midwest to New England
• 3rd largest gas distribution company in U.S.
• 4th largest gas pipeline company in U.S.
• One of the largest gas storage networks
• Mid-size regional electric business
• Net operating earnings of 376 million in 2007

4
NiSource Distribution Operations

• 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

5
NiSource Outsourcing

• Large scale
• IBM information technology
• Vertex customer service (through IBM)
• Miller Pipeline construction services
• Premier, SMP locating
• Small scale
• Office Depot office supplies
• Pinkerton security and theft investigation
  services
• Alliance One pre-collection
• Weltman, Weinberg, and Reiss legal collections
  services

6
NiSource Meter to Cash
7
Meter to Cash Processes

• Customer initiation
• Customer contact
• Meter reading
• Billing exceptions
• Bill production
• Cash operations
• Revenue recovery active
• Field collections
• Revenue recovery - inactive

Customer Contact Centers
Billing
Collections
8
Meter to CashOutsourcing Details Customer
Contact Centers

• Customer initiation
• Vertex Outsourcing (through IBM)
• Equifax
• PosID
• Equifax Advanced Energy Model
• Customer contact
• Vertex Outsourcing (through IBM)
• NCO

9
Meter to CashOutsourcing Details Billing

• Meter reading
• Bermex
• Trace
• Kentucky Utilities
• Heath
• Bill production
• No outsourcing presently
• Billing exceptions
• IBM (Bangalore, India)
• Cash operations
• Chase lockbox

10
Meter to CashOutsourcing Details Collections

• Revenue recovery (active)
• Soundbite (automated outbound calls)
• NCO (outbound and inbound credit calls)
• TSI (customer segmentation)
• Field collection
• Bermex
• Adecco
• Revenue recovery (inactive)
• Alliance One (pre-collect)
• Alliance One, United Collection Bureau, and NCO
  (prime placements)
• Argent, CBCS, CCS, and Trustmark (secondary
  placements)

11
Management of Service Providers

• Strong relationship
• Clear metrics
• Service level agreements
• Management meetings
• Onsite visits and audits
• Transparency

12
Insourcing vs. Outsourcing Considerations

• Insourcing
• Core competency
• Strategic
• Regulatory
• Unpredictable cost
• Unpredictable volumes
• Large variability
• Business acumen

• Outsourcing
• Technology
• Defined skill set/tools
• Transactional
• Significant scale
• Base load of work
• Available providers
• Niche services

Outsource WorkNever Accountability
13
Summary

• Understand your business processes and
  capabilities
• Determine your criteria for in-source vs.
  outsource
• Evaluate your opportunities and risks
• Research and test the market
• Execute a good contract
• Manage appropriately
• Re-evaluate and course correct if needed

No Sure-fire Best Practice for All Companies