Dominion Resources and Consolidated Natural Gas won approval for their merger from the Pennsylvania Public Utility Commission (PUC) in CNG’s home state, but not without concessions for both gas and electric ratepayers.

As part of the approval process, the companies reached an agreement with the Pennsylvania Office of Consumer Advocate that says post-merger Dominion and CNG will offer electricity under Pennsylvania’s Electric Choice program to eligible residential customers in the 16 western Pennsylvania counties served by CNG’s Peoples Natural Gas utility. This includes the service areas of Duquesne Light, Allegheny Power, Penelec and Penn Power. The combined companies also will freeze base rates of Peoples Gas until at least 2003.

Applications for merger approval are pending in Virginia, West Virginia and North Carolina, as well as with several federal agencies. The companies said they remain on track to receive all necessary approvals and close the merger by the end of the year.

After extending its unsolicited merger offer for Consolidated Natural Gas twice, Columbia Energy finally in May accepted defeat, ending a three-month battle with Dominion Resources for CNG’s hand (See NGI May 17, 1999). Columbia officially withdrew its $6.7 billion offer following a sweetened merger bid by Virginia Power parent Dominion set at $6.4 billion and the CNG board’s unanimous approval of a revised agreement with Dominion.

Joe Fisher, Houston

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