Second quarter temperatures that were 38% warmer than 2Q97lowered Columbia Energy Group earnings 35%, or $12 million to $22.8million. Despite the loss, however, CEO Oliver G. Richard III saidthe company “continued to show improvements in operations,” citingreductions in operation and maintenance costs and a 57% increasefrom exploration and production operations attributable toColumbia’s purchase of Appalachian Basin producer Alamco.

Operating income for the quarter was $70.9 million compared with$84.3 million last year, a decline of $13.4 million. Operatingearnings were down 37% in the distribution segment and 9% intransmission and storage. The marketing segment reported anoperating loss of $7.6 million, primarily reflecting increasedinvestment in its infrastructure and higher expenses associatedwith additions to staff. In the same period last year, this segmenthad a loss of $400,000. Columbia Energy’s power marketing activity,which began in December 1997, improved during the second quarter.And gas sales volume was 347.4 Bcf, an increase of 225.7 Bcf over2Q last year.

“We’ve also made important progress in building the electricitysupply part of our business,” Richard added. “[T]hus far this year,we’ve unveiled plans to develop with partners more than 1,500 MW ofelectric power generation. Specifically, as previously announced,we’re working with Westcoast Energy on developing three gas-firedplants in northeastern North America, and with LG&ampE Power Inc.to build a 550-MW gas-fired cogeneration plant on a Reynolds Metalssite in Gregory, TX.”

Richard said the highlight of the quarter was the massiveexpansion of Columbia’s customer-choice programs in Ohio andPennsylvania, which have given 85% of its utility customers theability to choose their gas supplier.

Columbia’s net income for the first half of 1998 was $170.3million, a decrease of $27.3 million from the same period lastyear. After restating for the stock split, earnings decreased 34cents per share to $2.04 per share. This decrease was largely dueto the record-breaking first quarter warm weather that continuedinto the second quarter, making the first six months of 1998 thewarmest on record.

Rocco Canonica

©Copyright 1998 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.