Less than one day after the Public Utilities Commission of Ohio(PUCO) threw its support behind the $6 billion NiSource-ColumbiaEnergy Group merger, three groups of Ohio schools urged thecommission to make a full review of the proposal. Last Tuesday,PUCO authorized a letter to the U.S. Securities and ExchangeCommission (SEC) that stated the proposed merger would have noimpact on its ability to protect the interests of Columbia Gas ofOhio ratepayers. However, the schools are not as confident.

The Ohio Schools Council, Bay Area Council and the Lake ErieCouncil, which comprise 115 school districts in northern Ohio,petitioned PUCO, requesting it investigate NiSource’s record ofservice complaints from customers, as well as its financialcondition. The three groups also want Columbia to open its mergerfiling to public review.

“This merger has the potential to negatively impact tax revenuesfor Ohio,” said Joe Lesak, executive secretary of the Ohio SchoolsCouncil. “Unless this proposed merger is carefully and fullyreviewed by the PUCO, we are concerned that the assumption byNiSource of over $8 billion of debt from Columbia will force thecompany to cut jobs and raise rates.” Lesak also said that withNiSource as the new out-of-state owner, the schools need acommitment that the company will work with them because they are”particularly large users of utility services.”

The schools groups also want PUCO to review why none of theestimated annual savings from the merger, estimated to be more than$100 million, was going to be returned to Ohio ratepayers, whichinclude the schools.

On Tuesday, PUCO said it would continue its jurisdiction overthe regulated activities of Columbia Gas of Ohio following themerger. Columbia Gas of Ohio is a natural gas distributionsubsidiary of Columbia Energy Group, and is Ohio’s largest gascompany, serving nearly 1.3 million customers.

With PUCO’s support, the merger moves one step closer to anexpected completion later this year. Shareholders still must casttheir vote, and several state public utility commissions andfederal agencies will weigh in with their decisions before the dealis finalized.

In a joint statement, NiSource’s CEO Gary L. Neale and ColumbiaEnergy Group CEO Oliver G. Richard III said that “consumer serviceand value delivery have and will continue to be major goals of theColumbia Gas distribution business.” They pointed to what theycalled a “record of excellence in customer service.”

The merger was announced in late February, and a jointapplication was filed in April (see NGI April 13). If approved, thenew company will serve more than 4.1 million customers in ninestates.

Carolyn Davis, Houston

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