NGI The Weekly Gas Market Report
NiSource Inc. last week unveiled the new organizationalstructure that will be in place when its $6 billion merger withColumbia Energy Group is completed, and noticeably absent from theroster was Columbia Chairman, CEO and President Oliver “Rick”Richard III who had fought tooth and nail to fend off NiSource’soverture.
In an internal e-mail to all Columbia employees on July 27, sentthe day after FERC approved the NiSource-Columbia marriage, Richardsaid “I am taking this opportunity to announce my intent to seeknew opportunities immediately following the closing date [of themerger]. While I will not be part of the new NiSource, I do intendto continue to work toward the effective restructuring of theindustry to meet the challenges of customer choice, energy economicdemocracy and shareholder value.”
Richard assumed the reins at Columbia in April 1995, and helpedto steer the Herndon, VA-based company out of the Chapter 11bankruptcy that it had been plunged in since mid-1991. Sinceemerging from bankruptcy in 1995, “we have provided to Columbia’sshareholders a total return of 240% or almost 30% per year, clearlyone 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 onCapitol Hill, been a FERC Commissioner, and has held key positionswith several major energy companies, including New Jersey Resourcesand Enron Corp. No one could say whether Richard has accepted anyoffers yet, but the general thinking is that he will land a plumposition at another energy company.
Upon closing of the NiSource-Columbia merger – only Securitiesand Exchange Commission approval is required – Gary L. Neale,currently chairman, president and CEO of NiSource, will become headof the new company and will retain the same title. Most of themanagement team that has been picked to lead the new company, whichwill be named NiSource, consists of NiSource executives.
The new company’s vice chairman will be Stephen P. Adik, who nowis senior vice president, CFO and treasurer of NiSource. CatherineG. Abbott, CEO of Columbia Gas Transmission and Columbia GulfTranmission, will become president of Pipeline Operations. She willoversee the two Columbia pipelines and fiber optictelecommunications network operations, as well as NiSource’sCrossroads Pipeline Co. and NiSource’s investment in PortlandNatural Gas Transmission System. Of all of the current Columbiaexecutives, Abbott will hold the highest position in the mergedNiSource-Columbia company.
Patrick J. Mulchay, president of NiSource’s Northern IndianaPublic Service Co. (NIPSCO), will become president of the MerchantCompany, which will include electric generating operations,wholesale gas and electric trading, gas supply and storage, and gasexploration 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 thecombined company. Mark D. Wyckoff, who will head up theNiSource/Columbia integration process, will head up the newcompany’s distributed generation and electronic commerceinitiatives. Joseph L. Turner will remain president of PrimaryEnergy Inc., the nation’s leading developer of on-site industrialpower generation. All of the above executives will report directlyto Neale.
Three other executives – Michael W. O’Donnell, Stephen P. Smithand James M. Clarke – will report to Adik. O’Donnell, currentlysenior vice president and CFO of Columbia Energy, has been namedexecutive 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. Healso will assist Wyckoff in the integration process. Clarke willcontinue as vice president of Risk Management and CapitalAllocation.
“This management team’s extraordinary experience, talent andenergy will enable us to hit the ground running once the merger iscompleted, to deliver to our customers and shareholders the valuefrom this strategic combination of brands and other assets,” Nealesaid. The NiSource/Columbia merger is targeted to close by the endof this year.
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