EXHIBIT 10.27

NISOURCE

POLICY SUBJECT: EXECUTIVE SEVERANCE POLICY

EFFECTIVE DATE: JUNE 1, 2002

1. Purpose. The NiSource Executive Severance Policy ("Policy") is
established, effective June 1, 2002, to provide Severance Pay and other
benefits, to terminated executive-level employees of certain affiliates
of NiSource Inc. ("Company"), as listed on Exhibit 1, while they seek
alternative employment. In consideration for such severance benefits,
an employee will release the Company and its affiliated entities from
any and all actions, suits, proceedings, claims and demands related to
the termination. Benefits under the Policy shall be in lieu of any
benefits available under the NiSource Severance Policy or any other
severance plan or policy maintained by the Company or any Affiliate.

2. Administration. The Policy is administered by the Nominating and
Compensation Committee of the Board of Directors of the Company
("Committee"). The Committee has the complete discretion and authority
with respect to the Policy and its application. The Committee reserves
the right to interpret the Policy, prescribe, amend and rescind rules
and regulations relating to it, determine the terms and provisions of
severance benefits and make all other determinations it deems necessary
or advisable for the administration of the Policy. The determination of
the Committee in all matters regarding the Policy shall be conclusive
and binding on all persons. The Committee may delegate any of its
duties under the Policy to the Executive Vice President of Human
Resources and Communications of the Company.

3. Scope. The Policy will apply to all full-time or part-time regular,
non-union employees of the Company or its Affiliates as listed on
Exhibit 1 ("Affiliates") whose target bonus under the NiSource Inc.
Management Incentive Plan for the calendar year in which he or she
becomes entitled to receive Severance Pay equals or exceeds 25%
("Participants").

4. Eligibility for Severance Pay. A Participant becomes entitled to
receive Severance Pay only if he or she is terminated by the Company or
an Affiliate for any of the following reasons:

(a) Reductions in force or other restructurings that eliminate the
Participant's position.

(b) The Participant's position must relocate and the Participant
chooses not to relocate.

(c) The Participant's position is constructively terminated.
Constructive termination means the scope of the Participant's
position is changed materially or the Participant's base pay
is reduced or the Participant's total participation in the
short-term and long-term incentive compensation plans of the
Company and its Affiliates is materially reduced or is
eliminated and the Participant chooses not to remain in the
position. The decision on constructive termination shall be
made by the Committee, not the Participant. If the Participant
disagrees, the Participant must follow the claims procedure,
as set forth in Section 15.

5. Conditions to Receipt of Benefits.

(a) Severance Pay is not available to a Participant otherwise
eligible for Severance Pay who transfers to another position
within the Company or its affiliates.

(b) During the period in which a Participant is entitled to
consider the execution of the release described in Section 6,
he or she may be required to complete unfinished business
projects and be available for discussions regarding matters
relative to the Participant's duties.

(c) A Participant must return, or agree to return, all Company and
affiliate property and information to the Company or the
affiliate.

(d) A Participant must agree to pay all outstanding amounts owed
to the Company or its affiliates and authorize the Company or
an affiliate to withhold any outstanding amounts from his or
her final paycheck and/or Severance Pay.

6. Amount of Severance Pay. The amount of Severance Pay to which a
Participant is entitled under the Policy is 52 weeks of base salary (at
the rate in effect on the date of termination).

A Participant who is receiving benefits under a short term disability
plan maintained by the Company or any Affiliate will be entitled to
Severance Pay at the end of the period of payment of short term
disability if, and only if, (1) he or she is not then eligible for
benefits under a long term disability plan maintained by the Company or
an Affiliate, and (2) he or she is not offered employment with the
Company or an Affiliate that, in the discretion of the Committee, is
comparable to that in effect at the time the applicable period of short
term disability commenced.

Severance Pay will be paid to a Participant in one lump sum cash
payment. Payment will be made as soon as practicable after the last to
occur of (1) the date of the Participant's termination of employment,
(2) the effective date of the Participant's valid executed release of
the Company and its Affiliates, and their respective officers,
directors and employees, from any and all actions, suits, proceedings,
claims and demands relating to the Participant's employment with the
Company and its Affiliates and the termination thereof, (3) the
effective date of the Participant's valid executed release and waiver
of all rights and benefits under the NiSource Severance Policy or any
other severance policy or plan maintained by the Company or any
Affiliate, and (4) the satisfaction of the

conditions described in clauses (b), (c) and (d) of Section 5.
Severance Pay shall be reduced by applicable amounts necessary to
comply with federal, state and local income tax withholding
requirements.

7. Benefits.

(a) Welfare Benefits. A Participant entitled to Severance Pay
shall receive, at the time of payment of Severance Pay, a lump
sum payment equivalent to 130% of 52-weeks of COBRA (as
defined in Section 4980B of the Internal Revenue Code of 1986,
as amended, and Sections 601-609 of the Employee Retirement
Income Security Act of 1974, as amended, or any successor
sections) continuation coverage premiums in lieu of any
continued medical, dental, vision, and other welfare benefits
offered by the Company or any Affiliate. Such 52-week period
of COBRA continuation coverage shall be included as part of
the period during which the Participant may elect continued
group health coverage under COBRA.

(b) Outplacement Services. A Participant shall receive
outplacement services, selected by the Company at its expense,
for a period not to exceed 12 months.

(c) Vacation. Accrual of vacation benefits will cease as of the
date of termination of employment. Payment for earned and
unused vacation time, based upon the vacation policy of the
applicable Affiliate on the date of termination, will be
included in the Participant's final regular pay check as an
active employee.

(d) Retirement Plans. Severance Pay shall not be considered for
purposes of any retirement, pension, savings, profit sharing
or pension plan maintained by the Company or an Affiliate.
Participation by the Participant in each such plan as an
active employee will cease as of the date of termination of
employment, and the Participant will have only the rights of a
terminated employee with respect to his or her benefits earned
under such plan as of the date of termination of employment.

8. Unemployment Compensation. Applicable state law will determinate the
eligibility of a Participant for unemployment compensation benefits.
Each Participant will be advised of his or her state's eligibility
provisions at the time of termination of employment.

9. Independent Contractor Status. A Participant who receives benefits
pursuant to the Policy shall not be eligible at any time after
termination of employment to enter into a consulting or independent
contractor relationship with the Company or any affiliated entity
pursuant to which relationship he or she shall perform the same or
similar services, upon the same or similar terms and conditions, as
were applicable to such Participant on the date of termination of
employment.

10. Death of Participant. If a Participant dies prior to receiving
Severance Pay to which he or she is entitled under the Policy, payment
will be made to the representative of his or her estate.

11. Term of Policy. The term of the Policy, as amended and restated herein,
will commence on June 1, 2002 and will expire on November 30, 2003.

12. Amendment or Termination.

(a) The Policy may be amended or terminated by the Company at any
time during its term when, in its judgment, such amendment or
termination is necessary or desirable. No such termination or
amendment will affect the rights of any Participant who is
then entitled to receive Severance Pay or other benefits under
the Policy at the time of such amendment or termination. The
Policy can only be changed by written endorsement by an
officer of the Company and only when the Company attaches the
written amendment to the Policy. No agent or other employee,
other than an officer of the Company, has the authority to
change or waive any provision of the Policy.

(b) Severance benefits under the Policy are not intended to be a
vested right.

13. Governing Law. The terms of the Policy shall, to the extent not
preempted by federal law, be governed by, and construed and enforced in
accordance with, the laws of the State of Indiana, including all
matters of construction, validity and performance.

14. Miscellaneous Provisions.

(a) Severance Pay and other benefits pursuant to the Policy shall
not be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge
prior to actual receipt by a Participant, and any attempt to
so anticipate, alienate, sell, transfer, assign, pledge,
encumber or charge prior to such receipt shall be void and
neither the Company nor any Affiliate shall be liable in any
manner for, or subject to, the debts, contracts, liabilities,
engagements or torts of any person entitled to any Severance
Pay or other benefits under the Policy.

(b) Nothing contained in the Policy shall confer upon any
individual the right to be retained in the service of the
Company or an Affiliate, nor limit the right of the Company or
an Affiliate to discharge or otherwise deal with any
individual without regard to the existence of the Policy.

(c) The Policy shall at all times be entirely unfunded. No
provision shall at any time be made with respect to
segregating assets of the Company or an Affiliate for payment
of any Severance Pay or other benefits hereunder. No employee
or any other person shall have any interest in any particular
assets of the Company or any Affiliate by reason of the right
to receive Severance Pay or other benefits under the Policy,
and any such employee or any other person shall have only the
rights of a general unsecured creditor of the Company or an
Affiliate with respect to any rights under the Policy.

15. Claims Procedure. If a claim for benefits under the Policy by a
Participant or his or her beneficiary is denied, either in whole or in
part, the Committee will let the claimant know in writing within 90
days. If the claimant does not hear within 90 days, the claimant may
treat the claim as if it had been denied. A notice of a denial of a
claim will refer to a specific reason or reasons for the denial of the
claim; will have specific references to the Policy provisions upon
which the denial is based; will describe any additional material or
information necessary for the claimant to perfect the claim and explain
why such material information is necessary; and will have an
explanation of the Policy's review procedure.

The claimant will have 60 days after the date of the denial to ask for
a review and a hearing. The claimant must file a written request with
the Committee for a review. During this time the claimant may review
pertinent documents and may submit issues and comments in writing. The
Committee will have another 60 days in which to consider the claimant's
request for review. If special circumstances require an extension of
time for processing, the Committee may have an additional 60 days to
answer the claimant. The claimant will receive a written notice if the
extra days are needed. The claimant may submit in writing any document,
issues and comments he or she may wish. The decision of the Committee
will tell the claimant the specific reasons for its actions, and refer
the claimant to the specific Policy provisions upon which its decision
is based.

16. Rights Under ERISA. Each Participant in the Policy is entitled to
certain rights and protection under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). ERISA provides that all
Policy Participants shall be entitled to:

(a) Examine, without charge, at the Company's office all Policy
documents, and copies of all documents filed for the Policy
with the United States Department of Labor, such as detailed
annual reports and descriptions.

(b) Obtain copies of all Policy documents and other Policy
information upon written request to the Committee. The
Committee may make a reasonable charge for the copies.

(c) Receive a summary of the Policy's annual report. The Committee
is required by law to furnish each Participant with a copy of
the summary annual report.

In addition to creating rights for Policy Participants, ERISA imposes
duties upon the people who are responsible for the operation of an
employee benefit plan. The people who operate the Policy, called
"fiduciaries" of the Policy, have a duty to do so prudently and in the
interest of the Policy Participants and beneficiaries. No one,
including the Company, any affiliate or any other person, may fire a
Participant or otherwise discriminate against a Participant in any way
to prevent him or her from obtaining a benefit or exercising his or her
rights under ERISA. If a Participant's claim for a benefit is denied in
whole or in part, he or she must receive a written explanation of the
reason for the denial. A Participant has the right to have the
Committee review and reconsider his or her claim. Under ERISA, there
are steps a Participant can take to enforce the above rights. For
instance, if a Participant requests materials from the Committee and

does not receive them within thirty (30) days, he or she may file suit
in a federal court. In such a case the court may require the Committee
to provide the materials and pay the Participant up to $110 a day until
the Participant receives the materials, unless the materials were not
sent because of reasons beyond the control of the Committee. If a
Participant has a claim for benefits, which is denied or ignored, in
whole or in part, he or she may file suit in a state or federal court.
If it should happen that the Policy fiduciaries misuse the Policy's
money, or if a Participant is discriminated against for asserting his
or her rights, he or she may ask assistance from the United States
Department of Labor, or he or she may file suit in a federal court. The
court will decide who should pay the court costs and legal fees. If the
Participant is successful, the court may order the person he or she has
sued to pay these costs and fees. If the Participant loses, the court
may order him or her to pay these costs and fees, for example, if it
finds his or her claim to be frivolous. If a Participant has questions
about the Policy, he or she should contact the Committee. If a
Participant has any questions about this statement or about his or her
rights under ERISA, he or she should contact the nearest Area Office of
the United States Labor-Management Services Administration, Department
of Labor.

17. Policy Facts:

Company: NiSource Inc.
Address: 801 E. 86th Avenue
Merrillville, Indiana 46410

Plan Name: NiSource Executive Severance Policy

Type of Plan: Severance Policy-Welfare Benefits Plan

Policy Year: Calendar year

Employer Identification Number (EIN): 35-1719974

Policy Number: ___

Policy Administrator: Nominating and Compensation Committee of NiSource Inc.

Business Address: 801 E. 86th Avenue
Merrillville, Indiana 46410

Business Telephone: 219-647-5200

Agent for Service of Legal Process: Nominating and Compensation Committee of NiSource Inc.

(Address) 801 E. 86th Avenue
Merrillville, Indiana 46410

IN WITNESS WHEREOF, the Company has caused this Policy to be executed in its
name by its duly authorized officer this 15th day of July, 2002, effective as of
the 1st day of June, 2002.

NISOURCE INC. NOMINATING AND
COMPENSATION COMMITTEE

By: /s/ Gary L. Neale
------------------------------------

EXHIBIT 1

NISOURCE EXECUTIVE SEVERANCE POLICY
PARTICIPATING AFFILIATES

1. Northern Indiana Public Service Company

2. NiSource Development Company, Inc.

3. NiSource Corporate Services Company (CE)

4. Kokomo Gas and Fuel Company

5. Northern Indiana Fuel and Light Company, Inc.

6. NI Energy Services, Inc.

7. Bay State Gas Company (MA)

8. Crossroads Pipeline Company

9. Granite State Gas Transmission, Inc. (NH)

10. Northern Utilities, Inc. (NH)

11. NESI Power Marketing, Inc.

12. EnergyUSA, Inc. (IN)

13. EnergyUSA Inc. (MA)

14. EnergyUSA Retail, Inc.

15. EnergyUSA Commercial Energy Services, Inc.

16. NESI Energy Marketing, L.L.C.

17. EnergyUSA (Connecticut), Inc. f/k/a Savage-ALERT, Inc. (CT)

18. EnergySPE, Inc. (MA)

19. EnergyuSA Mechanical, Inc. f/k/a Alert, Inc. (CT)

20. EnergyUSA Engineering, Inc. f/k/a Savage Engineering, Inc. (CT)

21. Primary Energy, Inc.

22. Northern Indiana Trading Company, Inc

23. Lake Erie Land Company

24. EnergyUSA-TPC Corp. (IN)

25. NiSource Energy Technologies, Inc.