FERC approves two gas-power mergers

The US Federal Energy Regulatory Commission Wednesday approved NiSource Inc.'s merger with Columbia Energy Group and El Paso Energy Corp.'s combination with Coastal Corp. FERC said, based on the companies' commitments, the NiSource-Columbia merger and the El Paso-Coastal combination would meet the public-interest standard of the Federal Power Act.


Washington, DC�The US Federal Energy Regulatory Commission Wednesday approved NiSource Inc.'s merger with Columbia Energy Group and El Paso Energy Corp.'s combination with Coastal Corp. FERC said, based on the companies' commitments, the NiSource-Columbia merger and the El Paso-Coastal combination would meet the public-interest standard of the Federal Power Act.

Under its 1996 merger guidelines, the commission focuses its review on three key issues: the effects of the merger on competition, on rates, and on regulation. In the case of both combinations, FERC determined the mergers would not harm competition, including gas supplies for electric generation.

Chairman James J. Hoecker said, "Corporate consolidation and convergence continue to be among the strongest forces changing the electricity industry. I am pleased that, in ensuring that competition and other public interests are not adversely affected, the commission has been able to act promptly in these cases."

Headquartered in Merriville, Ind., NiSource Inc. is the parent of Indiana's largest utility, Northern Indiana Public Service Co. (NIPSCO), which provides gas and electric service to about 660,000 customers in that state. NiSource said NIPSCO is actively involved in the regional transmission organization (RTO) process and will comply with the commission's RTO policy.

NiSource also has more than 300,000 gas customers in Maine, New Hampshire and Massachusetts.

Columbia Energy Group, based in Herndon, Va., serves 2 million gas customers in Ohio, Pennsylvania, Kentucky, Maryland, Virginia, and Washington, DC.

The $16 billion El Paso-Coastal merger will create a combined company with 58,000 miles of pipeline extending from the West Coast through the Southeast US, New England, and the Midwest. It will be the biggest natural gas pipeline network in the US.

Both El Paso and Coastal are based in Houston and have electric power marketing subsidiaries. El Paso also will acquire refineries, chemical plants, and about 1,700 service stations from Coastal.

El Paso expects to complete the merger during the fourth quarter, after receiving approval from the Federal Trade Commission.

FERC also conditionally approved a merger of Utilicorp. United Inc. with St. Joseph Light & Power Co. and Empire District Electric Co. Those firms, serving areas of Missouri, Kansas, Oklahoma, and Arkansas, must submit a revised competitive analysis 6 months before they begin integrating their electrical operations.

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