Distributor

Favorable weather and lower interest rates helped natural gas distributor NiSource Inc. reverse year-ago quarterly losses. The Merrillville, IN-based company, which serves 3.7 million natural gas and electric customers from the Gulf Coast through the Midwest to New England, reported 3Q net income of $23.2 million (11 cents a share), compared with a net loss of $21 million (minus 10 cents) for the same period of 2001.

Favorable weather and lower interest rates helped natural gas distributor NiSource Inc. reverse year-ago quarterly losses. The Merrillville, IN-based company, which serves 3.7 million natural gas and electric customers from the Gulf Coast through the Midwest to New England, reported third quarter net income of $23.2 million (11 cents a share), compared with a net loss of $21 million (minus 10 cents) for the same period of 2001.

The Philadelphia Gas Works (PGW) has filed a settlement proposal with the Pennsylvania Public Utility Commission, including a gas cost reduction of 20%, that adds up to about $171 million.

Noting the mild temperatures across the country, favorable arbitrage spreads and “ambitious distributor refills,” the industry continues to “inject a significant amount of natural gas into storage,” said UBS Warburg analyst Ronald Barone last week in his weekly research note. Even though national supplies now stand at 958 Bcf versus 1,117 Bcf a year ago, Barone said he expects to see the storage deficit drop and perhaps post a surplus by this summer.

Noting the mild temperatures across the country, favorable arbitrage spreads and “ambitious distributor refills,” the industry continues to “inject a significant amount of natural gas into storage,” said UBS Warburg analyst Ronald Barone last week in his weekly research note. Even though national supplies now stand at 958 Bcf versus 1,117 Bcf a year ago, Barone said he expects to see the storage deficit drop and perhaps post a surplus by this summer.

NiSource Inc., the gas and electric power distributor headquarteredin Merrillville, IN, reported that its earnings were up 25% for thethird quarter, with a per common share of $1.27 compared with $1.02 inthe third quarter of 1999. The results were “favorably impacted” bythe sale of Market Hub Partners (see Daily GPI, Aug. 31), which resulted in a $23.8 millionafter-tax gain, or approximately 19 cents per common share. NiSourcesaid that continued customer growth from the company’s natural gas,electric and water distribution businesses contributed to improvedearnings, offset by decreased electricity sales in the cool summer,increased interest charges of $28.4 million related to the Bay StateGas and EnergyUSA-TPC acquisitions, and expenditures of $5 millionrelated to the NiSource Columbia Energy Group merger (see Daily GPI,June 2). Net income was $1.55 million,an increase of $27.6 million from the third quarter of 1999. Gasoperations EBIT increased $83 million to $144.7 million from lastyear, mostly because of its Market Hub Partners sale. Electricoperation earnings EBIT increased $8.9 million to $292 million becauseof decreased operating expenses, which were partially offset bydecreased sales to residential customers during the cooler summercompared to the same period in 1999. NiSource said its cooling degreedays were down 23% from a year ago, which also decreased bulk powersales to other utilities. As part of its merger with Columbia EnergyGroup, which is slated to close Wednesday (Nov. 1), NiSource completedexchanging Columbia common shares for those electing to receive stockunder an exchange ratio of 3.04414. Under the merger terms, theexchange ratio was determined by dividing $74 by the average closingprice of NiSource common stock beginning Sept. 18 and endingOct. 27. The average for the period was $24.3090. Columbiashareholders who wanted to receive NiSource stock in the merger weresupposed to submit their completed election forms and stockcertificates by 5 p.m. Monday (Oct. 30). Contact ChaseMellonShareholder Services at (800) 685-4258 for information.

It is hard to imagine in California’s current summer of extremeelectricity discontent, but Southern California Gas, the nation’slargest natural gas distributor, envisions electric generationloads dropping by up to 38% over the next 20 years, according toits latest submission to the annual California Gas Report.

Friday represented the eye of the storm for Georgia’s gas industry,as Atlanta Gas Light (AGL), the state’s largest distributor, andPeachtree Natural Gas, the bankrupt supplier to 177,000 gas customers,brokered an interim solution to their problems at a federal bankruptcycourt hearing. The hearing was a result of an earlier AGL filing withthe court, seeking to distribute Peachtree’s customers to other, “morecreditworthy” suppliers (see Daily GPI, Oct29).

Friday represented the eye of the storm for Georgia’s gasindustry, as Atlanta Gas Light (AGL), the state’s largestdistributor, and Peachtree Natural Gas, the bankrupt supplier to177,000 gas customers, brokered an interim solution to theirproblems at a federal bankruptcy court hearing. The hearing was aresult of an earlier AGL filing with the bankruptcy court, seekingto distribute Peachtree’s customers to other, “more creditworthy”suppliers.