<PAGE>

                                                                    EXHIBIT 10.8

                            NONCOMPETITTON AGREEMENT

         THIS NONCOMPETITION AGREEMENT is made as of February 12, 1999, by and
between Bay State Gas Company, a Massachusetts corporation ("Company"), and
Roger A. Young ("Young").

                                    RECITALS

                  l.       Pursuant to the Agreement and Plan of Merger dated as
of December 18, 1997 ("Merger Agreement") by and among NIPSCO Industries, Inc,
("NIPSCO"), the Company (which was previously named Acquisition Gas Company) and
Bay State Gas Company, a Massachusetts corporation ("Bay State"), Bay State
merged on this date with and into the Company ("Merger").

                  2.       The Company and Young desire to enter arrangements to
preclude Young from engaging in activities during his employment and upon his
termination of employment with the Company (or any corporation which is a direct
or indirect subsidiary of NIPSCO) which compete with the Company, NIPSCO and its
subsidiaries or any of their predecessors.

         NOW THEREFORE, in consideration of the mutual covenants and promises
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and Young, each intending to be
legally bound, agree as follows:

                      1. COVENANTS CONCERNING COMPETITION

         (a)      Covenant Not To Compete. During the term of Young's employment
with the Company and for a period of three years thereafter, Young will not in
any manner, directly or indirectly:

                  (i)      manage, consult, be employed by, operate, join,
         promote, be compensated by, render advice to, control or participate in
         the business of any individual, firm, corporation, institution or
         company engaged in the Same or Similar Activities (as defined below)
         carried on by Bay State, the Company, NIPSCO or its subsidiaries or any
         of their predecessors in any of the United States (excluding Alaska and
         Hawaii); or

                  (ii)     own or have any ownership interest in any
         privately-held corporation, firm, institution or company engaged in the
         Same or Similar Activities carried on by Bay State, the Company, NIPSCO
         or its subsidiaries or any of their predecessors in any of the United
         States (excluding Alaska and Hawaii); or

                  (iii)    own or have an ownership interest of more than 2% of
         the publicly-traded securities of any public corporation, firm,
         institution or company

<PAGE>

         engaged in the Same or Similar Activities carried on by Bay State, the
         Company, NIPSCO or its subsidiaries or any of their predecessors in any
         of the United States (excluding Alaska and Hawaii).

         For purposes of the Noncompetition Agreement, Same or Similar
Activities shall mean the operation of a: (i) natural gas utility business, (ii)
electric utility business, (iii) gas or electric generator business, (iv) gas or
electric distribution business, (v) gas transportation business, (vi) gas
pipeline or transmission business, (vii) pipeline construction business, (viii)
utility locating and marking services business, (ix) business involving the
provision of non-regulated energy products and services of a type provided by
Bay State as of this date, and (x) any business involving gas storage
facilities.

         (b)      Non-Solicitation. During the term of Young's employment with
the Company and for a period of three years thereafter, Young will not in any
manner, directly or indirectly, cause, persuade, solicit, induce or attempt to
do any of the foregoing in order to:

                  (i)      cause any person, business or entity which is a
         supplier or customer of the Company, NIPSCO or its subsidiaries at any
         time during the term of his employment to terminate any written or oral
         agreement or understanding with the Company, NIPSCO or its
         subsidiaries; or

                  (ii)     cause any person employed by the Company, NIPSCO or
         its subsidiaries at any time during the term of his employment to
         terminate their employment with the Company, NIPSCO or its subsidiaries
         in order to work for any individual, firm, corporation, institution or
         company engaged in the Same or Similar Activities carried on by the
         Company, NIPSCO or its subsidiaries in any of the United States
         (excluding Alaska and Hawaii).

         (c)      Judicial Modification of Covenants Concerning Competition. If
any provision contained in this Section 1 shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Section l, rather
this Section 1 shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. It is the intention of the parties
that if any of the restrictions or covenants contained herein is held to cover a
geographic area or to be of a duration of time which is not permitted by
applicable law, or in any way construed to be too broad or to any extent
invalid, such provisions shall not be construed to be null, void or of no
effect, but, to the extent such provision would be valid or enforceable under
applicable law if limited in scope or duration, a court of competent
jurisdiction shall construe and interpret or reform this Section 1 to provide
for a covenant having the maximum enforceable geographic area, time period and
other provisions (not greater than those contained herein) as shall be valid and
enforceable under such applicable law.

         (d)      Company's and NIPSCO's Interest. Young acknowledges that the
Company and NIPSCO and its subsidiaries have a legitimate interest which the
provisions of this Section 1 are reasonably necessary to protect, that the
restrictions on competition contained in this Section 1 are reasonable and that
the consideration set forth in Section 2 is sufficient for purposes of this
Section 1.

                                       2
<PAGE>

         (e)      Survival of Obligations. If Young's employment with the
Company is terminated for any reason, Young's duties, obligations and
responsibilities under this Noncompetition Agreement shall survive and shall
continue as set forth herein.

                                2. CONSIDERATION

         In consideration of Young entering into this Noncompetition Agreement,
Young shall be paid compensation as follows:

         (a)      Consideration. In consideration of Young entering into this
Noncompetition Agreement, the Company will be making principal payments to Young
in connection with this Noncompetition Agreement in the amount of $3,200,000.
Except as provided in this Section 2(a), the Company shall pay Young the payment
in the amounts shown in the column "Payment" and on the dates set forth on
Schedule 2(a) attached hereto. In the event Young is not a director of NIPSCO on
June 30, 2002, and his failure to be a director is not due to his death or
resignation as a director, then the Company shall pay Young the amount shown in
the column "Payment" for June 2002 as set forth in Schedule 2(b) attached
hereto. In the event Young is not a director of NIPSCO at any time between June
30, 1999 and June 30, 2005, and such failure is due to Young's resignation as a
director, then the Company shall pay to Young in a lump sum the sum of the
amounts set forth in the columns "End Balance" and "Payment" on Schedule 2(a)
which corresponds to the date of the calendar quarter during which such
resignation occurs. If Young dies prior to the payment by the Company of all of
the amounts set forth on Schedule 2(a) and Young has a surviving spouse, at the
option of Young's surviving spouse, the Company shall either (i) pay to Young's
surviving spouse in a lump sum the sum of the amounts set forth on Schedule 2(a)
in the columns "End Balance" and "Payment" which corresponds to the date of the
calendar quarter during which Young died or (ii) continue to pay to Young's
surviving spouse the payment plus accrued interest thereon in the amounts and on
the dates set forth on Schedule 2(a). If Young dies prior to the payment by the
Company of all of the amounts set forth on Schedule 2(a) and Young does not have
a surviving spouse, the Company shall pay to Young's Beneficiary in a lump sum
the sum of the amounts set forth on Schedule 2(a) in the columns "End Balance"
and "Payment" which corresponds to the date of the calendar quarter during which
Young died.

         For purposes of this Agreement, Young's "Beneficiary" shall be any
person, trust or other entity designated in writing by Young, or if not so
designated, the personal representative of Young's estate or if no such
representative shall be appointed within six months after the date of Young's
death, Young's heirs under the laws of descent arid distribution in effect in
the state in which Young is domiciled at the date of his death.

                                   3. BREACH

         Young acknowledges that the Company would be irreparably harmed by any
breach of Section 1 and that there would be no adequate remedy at law or in
damages to compensate the Company for any such breach. Accordingly, the Company
will be entitled, in addition to any offer rights or remedies it may have at law
or in equity, to apply for an injunction enjoining and restraining Young from
doing or continuing to do any such act or any other violations or threatened
violations of Section 1.

                                       3
<PAGE>

                                   4. NOTICES

         Any notice or communication given pursuant to this Noncompetition
Agreement must be in writing and shall be effective only if delivered
personally; or sent by facsimile transmission; or delivered by overnight courier
service; or sent by certified mall, postage paid, return receipt requested, to
the recipient at the address indicated below or to such other address as the
party being notified may have previously furnished to the other party by written
notice pursuant to this Section 4:

         If to the Company or NIPSCO, to:

                  NIPSCO Industries, Inc.
                  801 East 86th Avenue
                  Merrillville, Indiana 46410
                  Telephone: (219) 647-6004
                  Facsimile: (219) 647-6061
                  Attn:      Chairman, President and Chief Executive Officer

         If to Young, to:

                  Roger A. Young
                  125 Mill Street
                  P. O. Box 95
                  Sherborn, Massachusetts 01770
                  Telephone: (548) 653-1534

         Notices under this Noncompetition Agreement shall be effective and
deemed received on the date of personal delivery or facsimile transmission (as
evidenced by facsimile confirmation of transmission); on the day after sending
by overnight courier service (as evidenced by the shipping invoice signed by a
representative of the recipient); or on the date of actual delivery to the party
to whom such notice or communication was sent by certified mail, postage
prepaid, return receipt requested (as evidenced by the return receipt signed by
a representative of such party).

                         5. ENTIRE AGREEMENT; AMENDMENT

         This Noncompetition Agreement represents the entire agreement of the
Company and Young with respect to the matters set forth in it. No amendment or
modification of the terms of this Noncompetition Agreement shall be binding upon
the parties unless reduced to writing and signed by each of the parties.

                                6. SEVERABILITY

         Any provision of this Noncompetition Agreement prohibited by law or
deemed unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions.

                                       4
<PAGE>

                                7. GOVERNING LAW

         This Noncompetition Agreement shall be interpreted and construed under
the laws of the State of Indiana.

                           8. SUCCESSORS AND ASSIGNS

         This Noncompetition Agreement shall inure to the benefit of the Company
and its successors and assigns.

                                   9. WAIVER

         No waiver by any party at any time of any breach by the other party of,
or compliance with, any condition or provision of this Noncompetition Agreement
to be performed by such other party shall be deemed a waiver of any other
provisions or conditions at the same time or at any prior or subsequent time.

                           10. SURVIVAL OF AGREEMENT

         This Noncompetition Agreement shall survive the termination of Young's
employment with the Company and shall survive until the expiration or
termination of this Noncompetition Agreement.

                                11. COUNTERPARTS

         This Noncompetition Agreement may be executed in counterparts, each of
which shall be deemed an original.

                            12. LITIGATION EXPENSES

         In the event of any litigation or other proceeding between the Company
and Young with respect to the subject matter of this Agreement and the
enforcement of rights hereunder, the Company shall reimburse Young for all
reasonable costs and expenses relating to such litigation or other proceeding as
they are incurred, including reasonable attorneys fees and expenses, regardless
of whether such litigation results in any settlement or judgment or order in
favor of any party; provided, however, that any claim or action initiated by
Young relating to this Agreement shall have been made or brought after
reasonable inquiry and shall be well-grounded, in fact, and warranted by
existing law or a good faith argument for the extension, modification or
reversal of existing law, and that is not interposed for any improper purpose,
such as to harass or to cause unnecessary delay or needless increase in the cost
of litigation.

         Notwithstanding any provision of Indiana law to the contrary, in no
event shall Young be required to reimburse the Company for any of the costs and
expenses relating to such litigation or other proceeding. The obligation of the
Company under this paragraph 12 shall survive the termination for any reason of
this Agreement (whether such termination is by the Company by Young, upon
expiration of this Agreement or otherwise).

             [The remainder of this page left intentionally blank.]

                                       5
<PAGE>

         IN WITNESS WHEREOF, the parties, intending to be legally bound hereby,
have duly executed this Noncompetition Agreement as of the day and year first
set forth above.

                                   BAY STATE GAS COMPANY

                                   By: /s/ Jeffrey W. Yundt
                                   Title: President and CEO

                                   /s/ Roger A. Young
                                   ROGER A. YOUNG


         The undersigned hereby guarantees the performance of the Company of its
obligations hereunder.

                                   NIPSCO INDUSTRIES, INC.

                                   By: /s/ Mark D. Wyckoff
                                   Title: Vice President, Human Resources

                                       6
<PAGE>

                                  SCHEDULE 2(a)

Roger Young                                                         Non Compete

              Ending Date First Period              3/31/00
              Deferral                                    0 quarters
              Interest Only                               0 quarters
              Principal                                  22 quarters
              Interest Rate                            6.76%           1.69%

<TABLE>
<CAPTION>
    Quarter                   Beg                                                               End
 Period Ending              Balance          Interest       Principal          Payment        Balance
<S>      <C>               <C>               <C>            <C>                <C>           <C>
 1       Mar-00            3,200,000          54,080           -4,080           50,000       3,204,080
 2       Jun-00            3,204,080          54,149           -4,149           50,000       3,208,229
 3       Sep-00            3,208,229          54,219           -4,219           50,000       3,212,448
 4       Dec-00            3,212,448          54,290           -4,290           50,000       3,216,738
 5       Mar-01            3,216,738          54,363           -4,363           50,000       3,221,101
 6       Jun-01            3,221,101          54,437           -4,437           50,000       3,225,538
 7       Sep-01            3,225,538          54,512           -4,512           50,000       3,230,049
 8       Dec-01            3,230,049          54,588           -4,588           50,000       3,234,637
 9       Mar-02            3,234,637          54,665           -4,665           50,000       3,239,303
10       Jun-02            3,239,303          54,744           -4,744           50,000       3,224,047
11       Sep-02            3,244,047          54,824           -4,824           50,000       3,248,871
12       Dec-02            3,248,871          54,906           -4,906           50,000       3,253,777
13       Mar-03            3,253,777          54,989           -4,989           50,000       3,258,766
14       Jun-03            3,258,766          55,073           -5,073           50,000       3,263,839
15       Sep-03            3,263,839          55,159           -5,159           50,000       3,268,998
16       Dec-03            3,268,998          55,246           -5,246           50,000       3,274,244
17       Mar-04            3,274,244          55,335           -5,335           50,000       3,279,579
18       Jun-04            3,279,579          55,425           -5,425           50,000       3,285,004
19       Sep-04            3,285,004          55,517           -5,517           50,000       3,290,520
20       Dec-04            3,290,520          55,610           -5,610           50,000       3,296,130
21       Mar-05            3,296,130          55,705           -5,705           50,000       3,301,835
22       Jun-05            3,301,835          55,801        3,301,835        3,357,636               0
23       Sep-05                    0               0                0                0               0
24       Dec-05                    0               0                0                0               0
25       Mar-06                    0               0                0                0               0
26       Jun-06                    0               0                0                0               0
27       Sep-06                    0               0                0                0               0
28       Dec-06                    0               0                0                0               0
29       Mar-07                    0               0                0                0               0
30       Jun-07                    0               0                0                0               0
31       Sep-07                    0               0                0                0               0
32       Dec-07                    0               0                0                0               0
33       Mar-08                    0               0                0                0               0
34       Jun-08                    0               0                0                0               0
35       Sep-08                    0               0                0                0               0
36       Dec-08                    0               0                0                0               0
37       Mar-09                    0               0                0                0               0
38       Jun-09                    0               0                0                0               0
39       Sep-09                    0               0                0                0               0
40       Dec-09                    0               0                0                0               0
</TABLE>

<PAGE>

                                  SCHEDULE 2(b)

Roger Young                                                         Non Compete

               Ending Date First Period              3/31/00
               Deferral                                    0 quarters
               Interest Only                               0 quarters
               Principal                                  22 quarters
               Interest Rate                            6.76%           1.69%

<TABLE>
<CAPTION>
    Quarter                   Beg                                                               End
 Period Ending              Balance          Interest       Principal         Payment         Balance
<S>      <C>               <C>               <C>            <C>               <C>            <C>
 1       Mar-00            3,200,000          54,080           -4,080           50,000       3,204,080
 2       Jun-00            3,204,080          54,149           -4,149           50,000       3,208,229
 3       Sep-00            3,208,229          54,219           -4,219           50,000       3,212,448
 4       Dec-00            3,212,448          54,290           -4,290           50,000       3,216,738
 5       Mar-01            3,216,738          54,363           -4,363           50,000       3,221,101
 6       Jun-01            3,221,101          54,437           -4,437           50,000       3,225,538
 7       Sep-01            3,225,538          54,512           -4,512           50,000       3,230,049
 8       Dec-01            3,230,049          54,588           -4,588           50,000       3,234,637
 9       Mar-02            3,234,637          54,665           -4,665           50,000       3,239,303
10       Jun-02            3,239,303          54,744        3,239,303        3,294,047               0
11       Sep-02                    0               0                0                0               0
12       Dec-02                    0               0                0                0               0
13       Mar-03                    0               0                0                0               0
14       Jun-03                    0               0                0                0               0
15       Sep-03                    0               0                0                0               0
16       Dec-03                    0               0                0                0               0
17       Mar-04                    0               0                0                0               0
18       Jun-04                    0               0                0                0               0
19       Sep-04                    0               0                0                0               0
20       Dec-04                    0               0                0                0               0
21       Mar-05                    0               0                0                0               0
22       Jun-05                    0               0                0                0               0
23       Sep-05                    0               0                0                0               0
24       Dec-05                    0               0                0                0               0
25       Mar-06                    0               0                0                0               0
26       Jun-06                    0               0                0                0               0
27       Sep-06                    0               0                0                0               0
28       Dec-06                    0               0                0                0               0
29       Mar-07                    0               0                0                0               0
30       Jun-07                    0               0                0                0               0
31       Sep-07                    0               0                0                0               0
32       Dec-07                    0               0                0                0               0
33       Mar-08                    0               0                0                0               0
34       Jun-08                    0               0                0                0               0
35       Sep-08                    0               0                0                0               0
36       Dec-08                    0               0                0                0               0
37       Mar-09                    0               0                0                0               0
38       Jun-09                    0               0                0                0               0
39       Sep-09                    0               0                0                0               0
40       Dec-09                    0               0                0                0               0
</TABLE>