A little more than a year after NiSource started its pursuit of Columbia Energy Group, the merger is nearing completion. Seven out of nine states have completed the necessary regulatory actions, and the proposed union is on the docket for a vote at FERC’s next regular meeting, Wednesday, July 12, (see Daily GPI, June 8, 1999).

“This is moving along very well, in some respects better thanplanned,” said Maria P. Hibbs, NiSource spokesperson. “We arehopeful we will beat our own (end-of-the-year) deadline,” sheadded. It is “conceivable” that this process could be completedwithin two months.

Kentucky, Maine and Indiana regulators were the most recent toapprove the merger.

On June 30, the Kentucky Public Service Commission (KPSC) gaveits consent, as long as Columbia Gas of Kentucky (CKY) lives up tocertain commitments. The merger must have no impact on the baserates for CKY’s 141,000 natural gas customers. CKY must maintainits headquarters in Lexington, and continue to help the communityand contribute at current levels. CKY also must keep track of itsmerger savings for consideration in the next customer rates case in18 months.

The Maine Public Utilities Commission gave its merger approvalon June 30 as well, subject to certain conditions regardingNorthern Utilities. Northern Utilities is a natural gasdistribution unit of NiSource’s subsidiary Bay State Gas. NorthernUtilities currently serves about 24,000 customers in southernMaine.

The Indiana Utility Regulatory Commission (IURC) found afterdeliberation, that the proposed merger would not change the IURC’sability to monitor the activities of NiSource’s subsidiary,Northern Indiana Public Service Company (NIPSCO).

“We remain dedicated to bringing excellent energy services toColumbia customers in Kentucky, to Northern Utilities customers inMaine and to NIPSCO customers in Indiana, as well as to continue tosupport customer choice programs in both electricity and naturalgas,” said Gary L. Neale, NiSource’s CEO.

Oliver G. Richard III, Columbia Energy’s CEO, commented, “We areworking closely with NiSource to achieve a smooth transition. Theprogress on the regulatory approval front is just one element ofthe broad cooperation between the two companies, as we move aheadto the merger’s expected completion, and to bring its benefits tocustomers.”

Settlement deals have already been put together in the tworemaining states of Virginia and Pennsylvania, but neithercommission has approved it yet. The final approvals are expected tocome down soon. Rulings by certain federal agencies are stillnecessary, including the Federal Energy Regulatory Commission andthe Securities and Exchange Commission.

After a long courtship, Columbia agreed to the $6 billion transaction on Feb. 28, and the deal was approved by both sets of shareholders on June 1 and 2 (see Daily GPI, Feb. 29; June 5). The union is set to create a mega energy powerhouse serving nine states and more than 4 million customers, stretching from Chicago in the west to New England in the east and south to the Gulf of Mexico.

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