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U.S. Securities and Exchange Commission


(Release No. 35-27890; 70-10169)

NiSource Inc., et al.

Order Authorizing Additional Money Pool Participants; Reservation of Jurisdiction

September 20, 2004

NiSource Inc. ("NiSource"), a registered public-utility holding company, Northern Indiana Public Service Company ("Northern Indiana"), Kokomo Gas and Fuel Company ("Kokomo"), Northern Indiana Fuel and Light Company, Inc. ("NIFL"), all public-utility company subsidiaries of NiSource, EnergyUSA, Inc., and its subsidiaries, PEI Holdings, Inc. (formerly known as Primary Energy, Inc.), NiSource Capital Markets, Inc. ("Capital Markets"), NiSource Corporate Services Company ("NiSource Services"), a subsidiary service company, NiSource Finance Corp. ("NiSource Finance"), Granite State Transmission, Inc., Crossroads Pipeline Company, NiSource Development Company, Inc., and its subsidiaries, NI Energy Services, Inc., and its subsidiaries, NiSource Energy Technologies, Inc., Columbia Assurance Agency, Inc., NiSource Retail Services Inc. ("Retail Services"), IWC Resources Corporation and its subsidiaries, Columbia Energy Group ("Columbia"), a registered public-utility holding company, Columbia Atlantic Trading Corporation, Columbia Deep Water Services Company, Columbia Energy Services Corporation and Columbia Remainder Corporation and its subsidiary, all located in Merrillville, Indiana; Bay State Gas Company ("Bay State"), Northern Utilities, Inc. ("Northern Utilities"), both gas utility companies, located in Westborough, Massachusetts; Columbia Gas of Kentucky, Inc. ("Columbia Kentucky"), Columbia Gas of Maryland, Inc. ("Columbia Maryland"), Columbia Gas of Ohio, Inc. ("Columbia Ohio"), Columbia Gas of Pennsylvania, Inc. ("Columbia Pennsylvania"), Columbia Gas of Virginia, Inc. ("Columbia Virginia"), all gas utility companies, and Columbia of Ohio Receivables Corporation (formerly known as Columbia Accounts Receivable Corporation), Central Kentucky Transmission Company ("Central Kentucky"), Columbus, Ohio; Columbia Gas Transmission Corporation, Fairfax, Virginia; Columbia Gulf Transmission Company, Houston, Texas; Columbia Network Services Corporation and its subsidiary, Columbus, Ohio; and NiSource Insurance Corporation Limited, Hamilton, Bermuda (collectively "Applicants"), filed a post-effective amendment, as amended ("Application"), with the Commission under sections 6(a), 7, 9(a), 10, 12(b) and 12(f) of the Act and rule 54. The Commission issued a notice of the filing of the Application on August 19, 2004 (Holding Co. Act Release No. 27884).

NiSource, directly and indirectly owns ten public-utility subsidiary companies: Northern Indiana, Kokomo, NIFL, Bay State, Northern Utilities, Columbia Kentucky, Columbia Maryland, Columbia Ohio, Columbia Pennsylvania and Columbia Virginia (collectively, "Utility Subsidiaries"). By order dated December 30, 2003 (NiSource Inc., et al., Holding Co. Act Release No. 27789) ("Prior Order"), the Commission authorized NiSource, the Utility Subsidiaries and certain of NiSource's nonutility subsidiaries to engage in a program of financing, to organize and acquire the securities of certain new subsidiaries, to engage in certain nonutility businesses and to engage in other related transactions in the ordinary course of business. NiSource, the Utility Subsidiaries and certain of the nonutility subsidiaries were authorized to participate in the NiSource System Money Pool ("Money Pool"), among other things.1 The participating NiSource subsidiaries were authorized to make borrowings from each other and from NiSource Finance Corp., a financing subsidiary of NiSource, through the Money Pool.

Applicants request that Retail Services and Central Kentucky be permitted to be borrowers in the Money Pool. Both subsidiaries will be lenders to the Money Pool, as well. Applicants also request that the Commission reserve jurisdiction over the participation of any other current or future direct or indirect nonutility subsidiary of NiSource as a borrower in the Money Pool.

Retail Services, incorporated in November 2003 and an "energy-related company" under rule 58, renders energy management services, sells, installs, and/or services standard gas and electric appliances and provides other technical services, including, without limitation, in-house gas line maintenance and repair services. Central Kentucky, a nonutility subsidiary of Columbia Kentucky incorporated in September 2004, is a "gas-related company" under rule 58, organized by Columbia Kentucky to acquire and hold a 25% undivided interest in a segment of Columbia Gas Transmission Corporation's interstate pipeline and facilities located in Kentucky. Central Kentucky's pipeline will provide gas transportation service to Columbia Kentucky and unaffiliated third parties.

The transactions proposed are subject to rule 54. Rule 54 provides that in determining whether to approve certain transactions (other than those involving exempt wholesale generators ("EWGs") or foreign utility companies ("FUCOs")), if rule 53(a), (b) and (c) are satisfied, the Commission will not consider the effect of the capitalization or earnings of any subsidiary which is an EWG or a FUCO upon the registered holding company. NiSource states that it satisfies all of the conditions of rule 53(a), (b) and (c).2 Consequently, no further consideration of the effect of any EWG or FUCO subsidiary on NiSource is required at this time.

No state commission and no federal commission, other than the Commission, has jurisdiction over the proposed transaction. The fees, commissions and expenses incurred or to be incurred in connection with the preparation and filing of this Application are estimated not to exceed $4,000.

Due notice of the filing of the Application has been given in the manner prescribed in rule 23 under the Act and no hearing has been requested of or ordered by the Commission. Based on the facts in the record, the Commission finds that the applicable standards of the Act and rules are satisfied and no adverse findings are necessary.

IT IS ORDERED, under the applicable provisions of the Act and the rules, that the Application is granted and permitted to become effective immediately, subject to the terms and conditions prescribed in rule 24 under the Act.

IT IS FURTHER ORDERED that jurisdiction is reserved over the participation of any other current or future direct or indirect nonutility subsidiary of NiSource as a borrower in the Money Pool pending completion of the record.

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

Margaret H. McFarland
Deputy Secretary



Modified: 09/27/2004