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U.S. Securities and Exchange Commission


(Release No. 35-27879)

Filings Under the Public Utility Holding Company Act of 1935, as amended ("Act")

July 29, 2004

Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendment(s) is/are available for public inspection through the Commission's Branch of Public Reference.

Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by August 23, 2004, to the Secretary, Securities and Exchange Commission, Washington, D.C. 20549-0609, and serve a copy on the relevant applicant(s) and/or declarant(s) at the address(es) specified below. Proof of service (by affidavit or, in the case of an attorney at law, by certificate) should be filed with the request. Any request for hearing should identify specifically the issues of facts or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After August 23, 2004, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.

Columbia Energy Group (70-9421)

Columbia Energy Group ("Columbia Energy"), a registered holding company, and a wholly-owned subsidiary of NiSource Inc., also a registered holding company, of 801 East 86th Avenue, Merrillville, Indiana 46410, and Columbia Gas of Ohio, Inc., (" Columbia Ohio") a wholly-owned public utility subsidiary of Columbia Energy, of 200 Civic Center Drive, Columbus, Ohio 43215, (Columbia Energy and Columbia Ohio together referred to as "Columbia"), have filed with the Commission a post-effective amendment ("Amendment") to an application-declaration previously filed under sections 6(a), 7, 9(a), 10, and 12(b) of the Act and rules 45 and 54 under the Act.

Columbia Energy's public utility subsidiaries are Columbia Gas of Kentucky, Inc., Columbia Gas of Maryland, Inc., Columbia Ohio, Columbia Gas of Pennsylvania, Inc. and Columbia Gas of Virginia, Inc. Together, these companies provide gas utility service to approximately 2.2 million residential, commercial and industrial customers in portions of Ohio, Virginia, Pennsylvania, Maryland and Kentucky. Columbia Energy also directly or indirectly owns all of the outstanding securities of non-utility subsidiaries that are engaged in natural gas transportation and storage and other energy and gas-related activities.

By prior Commission order dated August 23, 1999 (HCAR No. 27064) ("Prior Order"), Columbia Energy was authorized to engage in the business of factoring customer accounts receivable ("Receivables") through one or more existing or newly formed or acquired, direct or indirect subsidiaries ("Factoring Subsidiaries") to supplement customer financings and other intrasystem financing activities, which are not deemed to require additional Commission approval. Columbia Energy was also authorized to capitalize the Factoring Subsidiaries with any combination of debt or equity or to provide guarantees for their obligations, in amounts that, in the aggregate do not exceed $25 million. In addition, Columbia Energy was permitted to factor the Receivables of associate and certain types of non-associate companies in the energy industry, subject to certain limitations. To date, the Factoring Subsidiaries have not factored Receivables for non-associate companies, and Columbia states that the Factoring Subsidiaries will not be used to purchase Receivables originated by non-associate companies, without prior Commission order. Under the Prior Order, the Factoring Subsidiaries were required to resell the Receivables to third party financial institutions ("Purchasers") on the date the Receivables were acquired. Under the Prior Order, Columbia is also required to report the acquisition and sale of all Receivables as "sales" under generally accepted accounting principles. In order to achieve true "sale" treatment, Columbia states that a Factoring Subsidiary must be capitalized with a sufficient level of equity.

Pursuant to the Prior Order, in September l999, Columbia Energy, through its financing subsidiary, Columbia Finance Corporation, organized and acquired the common stock of Columbia Accounts Receivable Corporation ("CARC") to handle the sale of Receivables by Columbia Ohio. Under its agreement with CARC, Columbia Ohio sold, without recourse, all of its trade receivables, other than certain low-income payment plan receivables, as they were originated. CARC, in turn, entered into an agreement under which it sold an undivided ownership interest in the Receivables to a commercial paper conduit formed by Canadian Imperial Bank of Commerce ("CIBC").

Effective May 13, 2004, Columbia Ohio, CARC and CIBC terminated the existing Receivables sale program, and all right, title and interest of CARC and the CIBC conduit in the Receivables were transferred back to Columbia Ohio. The next day, Columbia Ohio sold the same Receivable pool to a new Factoring Subsidiary of Columbia Ohio, Columbia of Ohio Receivables Corporation ("CORC"), which in turn sold an undivided interest in such Receivables to Beethoven Funding Corporation ("BFC"), as Purchaser. BFC is a commercial paper funding conduit formed by Dresdner Bank AG, New York Branch, as agent. Columbia Energy states that the new Receivables sale program operates substantially similar to the CIBC program that it replaced.

Pursuant to the terms of the sale agreement between Columbia Ohio and CORC, on the initial closing date, Columbia Ohio made a capital contribution of Receivables having an aggregate outstanding balance of $25 million. On or before November 14, 2004, Columbia Ohio is obligated to make an additional $15 million capital contribution, in the form of a contribution of Receivables.

Columbia now requests a supplemental order authorizing an increase in the maximum aggregate capitalization that Columbia may have, directly or indirectly, in all Factoring Subsidiaries from the current $25 million to $85 million. Columbia requests that the Commission authorize Columbia Ohio to make an incremental $15 million investment in CORC and reserve jurisdiction over the additional requested investment of $45 million whether in CORC or in any other Factoring Subsidiary, pending completion of the record. In addition, without further order of the Commission in this proceeding, Columbia states it will not, directly or indirectly, form or acquire the securities of any Factoring Subsidiary other than CORC, nor will CORC be used to purchase receivables originated by any company other than Columbia Ohio. Columbia requests that the Commission reserve jurisdiction, pending completion of the record, over (i) the formation and acquisition of any securities of any Factoring Subsidiary other than CORC and (ii) the factoring by CORC of receivables originated by any company other than Columbia Ohio.

Columbia states that the increase in the maximum aggregate capitalization for CORC is warranted in part due to the dramatic increase in the cost of gas since l999, when the Prior Order was issued. Columbia states that it expects that the price of gas will continue to increase. All other terms, conditions and restrictions under the Prior Order will continue to apply to Columbia Energy and its subsidiaries.

For the Commission, by the Division of Investment Management, pursuant to delegated authority.

J. Lynn Taylor
Assistant Secretary


Modified: 08/09/2004