Columbia Energy Group reported its second-quarter earnings weredown $16.6 million, or 20 cents per share, from 2Q97 primarilybecause temperatures in its service territory were 38% warmer thanlast year. Despite the loss, however, CEO Oliver G. Richard IIIsaid the company “continued to show improvements in operations,”citing reductions in operation and maintenance costs and a 57%increase from exploration and production operations. Richard alsonoted the massive expansion of Columbia’s customer-choice programsin Ohio and Pennsylvania, which have given 85% of its utilitycustomers the ability to choose their gas supplier.

“We’ve also made important progress in building the electricitysupply part of our business,” Richard added. “[T]hus far this year,we’ve unveiled plans to develop with partners more than 1,500 MW ofelectric power generation. Specifically, as previously announced,we’re working with Westcoast Energy on developing three gas-firedplants in northeastern North America, and with LG&E Power Inc.to build a 550-MW gas-fired cogeneration plant on a Reynolds Metalssite in Gregory, TX.”

Operating income for the quarter was $70.9 million compared with$84.3 million last year, a decline of $13.4 million. The marketingsegment reported an operating loss of $7.6 million, primarilyreflecting increased investment in its infrastructure and higherexpenses associated with additions to staff. In the same periodlast year, this segment had a loss of $400,000. Columbia Energy’spower marketing activity, which began in December 1997, improvedsecond-quarter results. Gas sales volume was 347.4 Bcf for thesecond quarter, an increase of 225.7 Bcf over last year.

Columbia’s net income for the first half of 1998 was $170.3million, a decrease of $27.3 million from the same period lastyear. After restating for the stock split, earnings decreased 34cents per share to $2.04 per share. This decrease was largely dueto the record-breaking first quarter warm weather that continuedinto the second quarter, making the first six months of 1998 thewarmest on record.

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