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Richard to Depart Columbia When Merger Completed

Richard to Depart Columbia When Merger Completed

NiSource Inc. last week unveiled the new organizational structure that will be in place when its $6 billion merger with Columbia Energy Group is completed, and noticeably absent from the roster was Columbia Chairman, CEO and President Oliver "Rick" Richard III who had fought tooth and nail to fend off NiSource's overture.

In an internal e-mail to all Columbia employees on July 27, sent the day after FERC approved the NiSource-Columbia marriage, Richard said "I am taking this opportunity to announce my intent to seek new opportunities immediately following the closing date [of the merger]. While I will not be part of the new NiSource, I do intend to continue to work toward the effective restructuring of the industry to meet the challenges of customer choice, energy economic democracy and shareholder value."

Richard assumed the reins at Columbia in April 1995, and helped to steer the Herndon, VA-based company out of the Chapter 11 bankruptcy that it had been plunged in since mid-1991. Since emerging from bankruptcy in 1995, "we have provided to Columbia's shareholders a total return of 240% or almost 30% per year, clearly one of the most impressive records in our industry. I am proud to [have been] part of that success story," he said in the e-mail.

During his career, Richard has worn many hats - he has worked on Capitol Hill, been a FERC Commissioner, and has held key positions with several major energy companies, including New Jersey Resources and Enron Corp. No one could say whether Richard has accepted any offers yet, but the general thinking is that he will land a plum position at another energy company.

Upon closing of the NiSource-Columbia merger - only Securities and Exchange Commission approval is required - Gary L. Neale, currently chairman, president and CEO of NiSource, will become head of the new company and will retain the same title. Most of the management team that has been picked to lead the new company, which will be named NiSource, consists of NiSource executives.

The new company's vice chairman will be Stephen P. Adik, who now is senior vice president, CFO and treasurer of NiSource. Catherine G. Abbott, CEO of Columbia Gas Transmission and Columbia Gulf Tranmission, will become president of Pipeline Operations. She will oversee the two Columbia pipelines and fiber optic telecommunications network operations, as well as NiSource's Crossroads Pipeline Co. and NiSource's investment in Portland Natural Gas Transmission System. Of all of the current Columbia executives, Abbott will hold the highest position in the merged NiSource-Columbia company.

Patrick J. Mulchay, president of NiSource's Northern Indiana Public Service Co. (NIPSCO), will become president of the Merchant Company, which will include electric generating operations, wholesale gas and electric trading, gas supply and storage, and gas exploration and production activities.

Jeffrey W. Yundt, president of NiSource's Bay State Gas Co. subsidiary, will be appointed president of Energy Distribution, overseeing all gas and electric distribution systems of the combined company. Mark D. Wyckoff, who will head up the NiSource/Columbia integration process, will head up the new company's distributed generation and electronic commerce initiatives. Joseph L. Turner will remain president of Primary Energy Inc., the nation's leading developer of on-site industrial power generation. All of the above executives will report directly to Neale.

Three other executives - Michael W. O'Donnell, Stephen P. Smith and James M. Clarke - will report to Adik. O'Donnell, currently senior vice president and CFO of Columbia Energy, has been named executive vice president and CFO of the new company. Smith, Columbia's deputy CFO, will be president of Business Services, which will include administrative and shared services functions. He also will assist Wyckoff in the integration process. Clarke will continue as vice president of Risk Management and Capital Allocation.

"This management team's extraordinary experience, talent and energy will enable us to hit the ground running once the merger is completed, to deliver to our customers and shareholders the value from this strategic combination of brands and other assets," Neale said. The NiSource/Columbia merger is targeted to close by the end of this year.

Susan Parker

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