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Columbia Energy Group
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NISOURCE, COLUMBIA ENERGY GROUP LAUNCH APPROVAL PROCESS
COMPANIES SEEK REGULATORY APPROVAL IN PENNSYLVANIA
MERRILLVILLE, Ind. and HERNDON, Va. (March 30, 2000)--NiSource Inc. (NYSE:
NI) and Columbia Energy Group (NYSE: CG) today announced the filing of an
application with the Pennsylvania Public Utility Commission seeking necessary
approvals of their planned merger. Pittsburgh-based Columbia Gas of
Pennsylvania, Inc., a Columbia subsidiary, provides retail natural gas service
to approximately 389,000 customers in 27 counties.
Pennsylvania is the first state to be asked to approve the merger, which
was announced February 28 and is expected to close by the end of 2000. The
combined company will serve more than 4.1 million customers primarily located in
nine states. Its operations will span the high-growth energy corridor stretching
from the Gulf of Mexico to New England, creating the largest natural gas
distributor east of the Rocky Mountains.
"Today's filing is an important first step in bringing together the
strengths of both companies to provide Pennsylvania consumers the full benefits
of energy choice," said NiSource Chairman, President and Chief Executive
Officer Gary L. Neale. "Already a recognized leader in opening its markets to
supplier choice under deregulation, Columbia Gas will be able to offer its
customers the same friendly, reliable service plus new energy options being
pioneered by NiSource, such as distributed generation.
"Distributed generation is an alternative means of obtaining electric power
on site using clean-burning, gas-fired generating facilities ranging from large
cogeneration systems for industrial users, to microturbines for smaller
businesses, to compact fuel cells for homes," Neale explained. "These options
add an important local dimension to the term `energy independence' for
consumers. It's just one of many ways we're adding value for customers served by
our distribution systems."
Oliver G. Richard III, chairman, president and chief executive officer of
Columbia Energy Group, added, "We believe the merger between NiSource and
Columbia will bring value to our shareholders, customers and the communities we
serve. By virtue of the new company's size, diversity of products and services,
expertise and geographic scope, it will have the resources and critical mass
necessary to compete more effectively in the rapidly changing energy
industry--and to bring value from that competition to the customers in
Pennsylvania."
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NiSource/Columbia Seek Pennsylvania PUC Approval--2
The proposed merger will have no impact on Columbia Gas of Pennsylvania's
rates, terms and conditions now approved by the Commission, according to the
filing. However, customers are expected to benefit from future opportunities
based on the increased electric competition from natural gas-fueled distributed
generation, as well as potential natural gas cost savings gained through the
efficient use of the combined upstream pipeline and storage assets of the new
company.
The filing pointed out that after the merger Columbia Gas of Pennsylvania
will:
o Continue its longstanding civic involvement in the communities it
serves by assuring ongoing charitable donations and civic involvement
consistent with past practices.
o Continue its leading role in promoting competition and customer choice
in rapidly deregulating markets.
o Honor all collective bargaining agreements and provide employees with
the better of Columbia or NiSource aggregate benefits for three years
following the closing. Since NiSource and Columbia have no overlapping
service areas, no significant staff reductions are expected to take
place at the local distribution company.
o Maintain Columbia Gas of Pennsylvania headquarters in Pittsburgh.
The daily operational impact of the merger will be transparent to Columbia
Gas customers because the change in corporate ownership "will not change the
manner in which Columbia provides gas sales and distribution service within the
Commonwealth," the filing concluded.
NiSource and Columbia also will seek merger approval from state regulators
in Virginia and Kentucky. Approvals will be sought from various federal
agencies.
NiSource Inc. is a holding company with headquarters in Merrillville, Ind.,
whose primary business is the distribution of electricity, natural gas and water
in the Midwest and Northeastern United States. The company also markets utility
services and customer-focused resource solutions along a corridor from Texas to
Maine. More information about the company is available on the Internet at
www.nisource.com.
Columbia Energy Group, based in Herndon, Va., is one of the nation's
leading energy services companies, with assets of approximately $7 billion. Its
operating companies engage in virtually all phases of the natural gas business,
including exploration and production, transmission, storage and distribution, as
well as retail energy marketing, propane and petroleum product sales, and
electric power generation. More information about Columbia is available on the
Internet at www.columbiaenergygroup.com.
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This release contains forward-looking statements within the meaning of the
federal securities laws. These forward-looking statements are subject to various
risks and uncertainties. The factors that could cause actual results to differ
materially from the projections, forecasts, estimates and expectations discussed
herein may include factors that are beyond the companies' ability to control or
estimate precisely, such as estimates of future market conditions, the behavior
of other market participants and
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NiSource/Columbia Seek Pennsylvania PUC Approval--3
the actions of the federal and state regulators. Other factors include, but are
not limited to, actions in the financial markets, weather conditions, economic
conditions in the two companies' service territories, fluctuations in
energy-related commodity prices, conversion activity, other marketing efforts
and other uncertainties. Other risk factors are detailed from time to time in
the two companies' SEC reports. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date of
this document. The companies do not undertake any obligation to publicly release
any revisions to these forward-looking statements to reflect events or
circumstances after the date of the document.
NiSource and the new holding company will be filing a registration
statement, which will contain a joint proxy statement/prospectus of NiSource and
Columbia, and other documents with the Securities and Exchange Commission.
Investors and security holders are urged to read the joint proxy
statement/prospectus and any other relevant documents filed with the SEC when
they become available because they will contain important information. Investors
and security holders will be able to receive the final joint proxy
statement/prospectus and other documents free of charge at the SEC's web site,
www.sec.gov, from NiSource at its web site, www.nisource.com, or from Columbia
at its web site, www.columbiaenergygroup.com. Information concerning the
identity of the participants in the solicitation of proxies by the NiSource Inc.
and Columbia Energy Group boards of directors and their direct or indirect
interest, by security holdings or otherwise, may be obtained from the Secretary
of NiSource Inc. or the Secretary of Columbia Energy Group at the respective
addresses listed above.