Mail Stop 3561
December 19, 2005
By Facsimile and U.S. Mail
Mr. Michael O`Donnell
Chief Financial Officer
Nisource Inc.
801 East 86th Avenue
Merrillville, IN 46410
Re: Nisource Inc.
Form 10-K for the year ended December 31, 2004
Filed March 9, 2005
File No. 1-16189
Northern Indiana Public Service Company
Form 10-K for the year ended December 31, 2004
Filed March 9, 2005
File No. 1-04125
Columbia Energy Group
Form 10-K for the year ended December 31, 2004
Filed March 9, 2005
File No. 1-01098
Dear Mr. O`Donnell:
We have reviewed your filings and have the following
comments.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
Please be as detailed as necessary in your explanation. After
reviewing this information, we may or may not raise additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Nisource Inc. Form 10-K for the Year Ended December 31, 2004
General
1. Please note that our review encompassed all three registrants
mentioned above. Accordingly, most of the comments, while
written
with the registrant`s specific information, have equal
applicability
to the related subsidiary(s) narrative or financial statements.
Please confirm that in responding to the proceeding comments you
will
also respond to the comment to the extent it has any direct or
indirect applicability to the related subsidiary(s) registrant.
Consolidated Balance Sheets, page 54
2. Explain to us why unbilled revenues, as a percentage of
accounts
receivable, have increased from 49% in 2003 to approximately 66%
in
2004.
Statements of Consolidated Cash Flows, page 56
3. We are unclear what the line item "Net Cash Flows (used for) or
from Discontinued Operations" represents. Please explain whether
such line item reflects only cash flows from discontinued
operating
activities and why there are no cash flows from discontinued
financial and investing activities. Please be advised that SFAS
no.
95 does not support aggregating operating, investing, and
financing
cash flows from discontinued operations into a single line item.
We
may have further comment.
Note 2. Recent Accounting Pronouncements; SFAS no. 123R, page 69
4. We note your change in awarding stock options from a delayed
vesting to immediate vesting and delayed exercise. While you
suggest
an implicit reason for such change, Topic 14:K in the last
paragraph
indicates management should disclose the reasons for entering into
such transactions. Please also advise whether such early vested
non-
exercisable options represent the difference between options
outstanding and exercisable in the table on page 89.
Note 8. Goodwill and Other Intangible Assets, page 80
5. We presume you have completed or are in the process of
completing
your calendar 2005 impairment testing of goodwill related to the
acquisition of Columbia. Please supplementally provide us with a
summary of your analysis performed for 2005. In this regard,
please
make it clear the method by which you are determining fair value
including whether an outside consultant was utilized and all
relevant
assumptions if a net present value calculation is one of the
valuation measures. Please ensure we understand how you
determine a
reporting unit and whether it is different from the related
segment
which has been allocated such goodwill. We may have further
comment.
Northern Indiana Public Service Co. Form 10-K for the Year Ended
December 31, 2004
Note 4. Regulatory Matters, page 44
6. Explain to us how you are accounting for the indefinite
shutdown
of the Mitchell Generating Station in January, 2002. We are
unable
to ascertain any write-downs of the station in any of the fiscal
years presented or discussed. In this regard, explain to us how
you
evaluated the generating station for impairment including the
related
literature that you applied and whether SFAS no. 90 would apply.
Tell us whether the Mitchell Generating Station is still being
recovered in approved rates. Also, tell us if you have accrued
any
environmental cleanup costs, if not, explain why. In this regard,
please explain in detail the rate and accounting ramifications of
the
IURC approving your agreement with the City of Gary. We may have
further comment.
Columbia Energy Group Form 10-K for the Year Ended December 31,
2004
Liquidity and Capital Resources, page 10
7. Please tell us the reason for the decrease in dividends paid.
In
this regard, please explain how you classifying transactions with
the
money pool in the Statements of Cash Flows including your
rationale
for such classification.
Note 7. Equity Investment Subsidiaries, page 34
8. Please provide an update regarding the transfer of your
interests
in the Millennium Pipeline Project entities and the current status
of
control. If you continue to control Millennium, please explain
how
your control is considered temporary as detailed in paragraph 2 to
ARB no. 51.
Note 17. Segments of Business, page 46
9. We note that your segment disclosure does not present interest
expense, interest income, or income tax expense. To the extent
such
items are included in your measure of segment profit, please
include
such items within your segment note. See paragraph 27 of FAS 131.
``` ```````````````````````````````````````````````Please
respond to these comments within 10 business days or tell us when
you
will provide us with a response. Please furnish a letter with
your
responses to our comments and provide any requested supplemental
information. Please understand that we may have additional
comments
after reviewing your responses to our comments. Please file your
response letter on EDGAR as a correspondence file.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff
of
the Division of Corporation Finance in our review of your filing
or
in response to our comments on your filing.
If you have any questions regarding this comment, please
direct them to Robert Babula, Staff Accountant, at (202) 551-3339
or,
in his absence, to the undersigned at (202) 551-3849. Any other
questions regarding disclosures issues may be directed to H.
Christopher Owings, Assistant Director at (202) 551-3725.
Sincerely,
Jim Allegretto
Senior Assistant Chief Accountant
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Mr. Michael O'Donnell
Nisource Inc.
December 19, 2005
Page 5