NiSource Head Sees Natural Gas as Fuel of the Future
CHARLESTON, W.Va., April 11 /PRNewswire/ -- NiSource Inc. (NYSE: NI) Chairman, President and Chief Executive Officer Gary L. Neale told shareholders at the company's annual meeting here today that NiSource's merger with Columbia Energy Group remains on track to add to the company's earnings in 2001. The NiSource-Columbia merger was completed Nov. 1, 2000.
"We're focused on steadily increasing earnings per share. As we've said before, the merger will be accretive in 2001," Neale said. "We are on track to realize net merger savings of approximately $100 million in 2001 from the elimination of duplicate corporate and administrative functions and from greater efficiencies in operations, business processes and systems."
With merger-integration costs behind it, permanent financing for the merger in place and a strong 2000 performance, NiSource is focused on building long-term shareholder value. By bringing together the company's assets, NiSource can create total energy solutions with new dimensions of value for its 3.6 million gas and electric customers, Neale said.
"NiSource now has industry-leading scale as the third-largest natural gas distributor in the U.S. and the largest east of the Rocky Mountains...With distribution operations aligned with our exploration and production, gas transmission and storage assets, NiSource is the most vertically integrated gas company in the country," he said. "Our merger with Columbia has enabled us to achieve our strategic goal of diversifying our earnings and growth profile. Before the merger, NiSource derived one-third of its revenues from natural gas operations and two-thirds from electric. By the end of 2001, two- thirds will be derived from natural gas and one-third from electric."
Natural gas is the fuel of the future, Neale said. A growing emphasis on cleaner, more reliable energy is stimulating demand for gas-fired power generation and new energy technologies, driving gas consumption and distributing usage year round. These dynamics will increase demand for natural gas by 25 percent before the end of this decade, he explained.
"NiSource is uniquely positioned to take advantage of this changing energy market, and geography is key. We have the right assets in the best market in the U.S.," he said.
NiSource's vertically integrated gas assets are strategically located in the high-demand energy corridor stretching from the Gulf of Mexico through the Midwest to New England. This corridor represents 30 percent of the nation's population and 40 percent of its energy consumption.
The company is focused on taking advantage of the opportunities within its geographic footprint, Neale said. These opportunities include:
* Trading and marketing around the company's existing assets and customer base; * Growth in gas-fired power generation within the company's market area; * A large industrial customer base that provides multiple new gas-fueled cogeneration opportunities within the customers' plants; and * The emerging market for distributed generation.
"We must stay flexible in today's changing energy market, and NiSource is a leader in developing technologies that offer customers true energy choice," Neale said.
Rising demand, overloaded power transmission networks and customer requirements for greater power reliability and quality are driving the demand for new energy solutions. Distributed generation units, including microturbines and fuel cells, run on natural gas at or near the point of consumption. They offer a non-traditional approach to meeting the demands of a market-driven, customer-oriented economy in which peak power demand has risen 25 percent since 1990, while capacity has increased only six percent.
"Distributed generation units are to large-scale power plants what personal computers were to large mainframe computers. We view distributed generation as the wave of the future. It will be a significant part of the U.S. energy mix, and gas companies will be winners," Neale said.
Anticipating dramatic changes in the energy marketplace, NiSource five years ago set a strategy to grow its domestic energy business within the nation's key energy market. The NiSource-Columbia merger has served to transform NiSource from a regional player in the industry to a super-regional powerhouse, he said.
"At last year's annual meeting I talked about creating a new company. Since then, we completed our merger integration and have built the momentum to create long-term shareholder value by being a leader in our chosen markets," Neale said.
NiSource held its annual meeting in Charleston, where the company's Columbia Gas Transmission Corp. and Columbia Natural Resources have headquarters and major operations.
At the meeting today, shareholders also approved the re-election of Steven C. Beering, Dennis E. Foster, James T. Morris and Carolyn Y. Woo as directors of the company, each for a term of three years that will expire in 2004.
Beering, president emeritus of Purdue University in West Lafayette, Ind., has been a NiSource director since 1986. Foster, vice chairman of ALLTEL Corp., Little Rock, Ark. until his retirement in 2000, has served as a NiSource director since 1999. Morris, chairman and chief executive officer of IWC Resources Corp., Indianapolis, has been a NiSource director since 1997. Woo has served as a NiSource director since 1997. She is the Martin J. Gillen Dean and the Ray and Milann Siegfried Professor of Management at Mendoza College of Business, University of Notre Dame in South Bend, Ind.
Neale's presentation to shareholders will be available on the company's Web site on Thursday, April 12.
NiSource is a holding company with headquarters in Merrillville, Ind., whose operating companies engage in virtually all phases of the natural gas business from exploration and production to transmission, storage and distribution, as well as electric generation, transmission and distribution. NiSource companies serve a high-growth energy corridor from the Gulf of Mexico to the Midwest to New England. More information about the company is available on the Internet at www.nisource.com .
SOURCE NiSource Inc.
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