DF 98-040
Northern Utilities, Inc.,
NIPSCO Industries, Inc., and
Northern Indiana Public Service Company
Joint Petition for Approval of
a Merger and Related Transactions
Order Approving Procedural Schedule
O R D E R N O. 22,930
May 13, 1998
APPEARANCES: LeBoeuf, Lamb, Greene & MacRae by
Meabh Purcell, Esq., for Northern Utilities, Inc.; Day,
Berry & Howard LLP by Robert P. Knickerbocker, Jr., Esq.,
for NIPSCO Industries and Northern Indiana Public Service
Company; Kenneth E. Traum for the Office of the Consumer
Advocate; and Eugene F. Sullivan, III, Esq., for the Staff
of the New Hampshire Public Utilities Commission.
I. PROCEDURAL HISTORY
On March 20, 1998, Northern Utilities, Inc.
(Northern), NIPSCO Industries, Inc. (Industries) and
Northern Indiana Public Service Company (Northern Indiana)
jointly filed with the New Hampshire Public Utilities
Commission (Commission) a Petition for Approval of a Merger
and Related Transactions. According to the petition, either
Northern or its parent, Bay State Gas Company (Bay State),
will be merged with an acquisition subsidiary of Industries
or Northern Indiana. Under the preferred merger, Bay State
would merge into Industries, the newly created wholly-owned
subsidiary formed for purposes of the merger. Sometime
after the merger, Northern would be transferred from Bay
State to Industries and would operate as a direct subsidiary
of Industries. Industries would maintain its status as an
exempt public utility holding company.
The preferred merger is subject to the approval of
Bay State's shareholders and the Securities and Exchange
Commission (SEC) under the Public Utility Holding Company
Act of 1935 (PUHCA), as amended. If the SEC does not
approve the merger in a timely manner, or if the status of
Industries as an exempt holding company under the PUHCA
would be jeopardized, under the preferred merger concept,
then the alternate merger, which does not require SEC
approval, would be employed to accomplish the merger. The
alternate merger would have Bay State and Northern merged
into Industries' public utility subsidiary, Northern
Indiana, and operate as divisions of Northern Indiana.
On April 9, 1998, the Commission issued an Order
of Notice which scheduled a prehearing conference for April
28, 1998. The Order of Notice also set deadlines for
intervention requests and objections thereto, outlined a
proposed procedural schedule, and required the Parties and
Commission Staff (Staff) to summarize their positions with
regard to the filing for the record. There were no Motions
to Intervene filed. The Office of the Consumer Advocate
(OCA) is a statutorily recognized intervenor.
On April 22, 1998, Staff submitted a letter to the
Commission stating that Northern, Industries and Northern
Indiana, the Maine Public Utilities Commission, the OCA and
Staff had agreed, for purposes of administrative efficiency,
to hold two joint technical sessions in Portsmouth, New
Hampshire to review the petition and to allow Northern to
provide any amendments or updates to its filing. As
Northern is a natural gas local distribution company serving
both New Hampshire and Maine customers, and is regulated by
both the New Hampshire and Maine Public Utilities
Commissions, a similar filing was made with the Maine Public
Utilities Commission. On April 23, 1998, the Commission
approved the request to hold two technical sessions,
scheduled for May 6, 1998 and May 26, 1998, at Northern's
Portsmouth office.
At the prehearing conference, Northern, Industries
and Northern Indiana, the OCA and Staff agreed to further
modify the proposed procedural schedule as outlined in the
Order of Notice. The revised procedural schedule is as
follows:
Technical Session in Portsmouth, NH May 6, 1998
Responses to Oral Data Requests May 12, 1998
Propounded at the 1st
Technical Session
Data Requests by Staff and May 15, 1998
Intervenors
Company Data Responses May 21, 1998
Technical Session May 26, 1998
Testimony by Staff and June 3, 1998
Intervenors
Data Requests by the Company June 10, 1998
Data Responses by Staff and June 17, 1998
Intervenors
Settlement Conference at 10:00 a.m. June 24, 1998
Hearing at 10:00 a.m. July 1, 1998
In accordance with the Order of Notice, Northern,
Industries and Northern Indiana, the OCA and Staff stated
their positions with regard to the filing for the record.
Northern stated that its petition proposes two post-merger
structures. Under either structure, the New Hampshire
Commission would still retain jurisdiction over Northern.
Northern believes that the Commission should apply a
standard of review consistent with the public interest.
Northern hopes for an expeditious resolution of this docket
and proposes to work closely and cooperatively with the OCA
and Staff to accomplish completion in a timely manner.
Industries and Northern Indiana stated that the
petition also asked the Commission to consider whether,
subject to final Commission approval of the merger, it
favors the preferred merger over the alternate merger and to
express a preliminary preference to the SEC if the
Commission has enough information to reach a conclusion.
Industries and Northern Indiana stated that it would be
helpful if the Commission would notify the SEC of its
preference so that the Commission's decision can be
incorporated into the SEC's decision.
The OCA stated that based on an initial review of
the filing and recognizing its current workload, the OCA
expects that it will be taking a limited role in this
docket. To the extent the OCA does participate, its
interests relate to potential impacts on customer service,
the extent decisions affecting customers will be made
locally and, generally, the future impacts on rates, terms,
operations and safety; i.e., issues raised in any merger.
Staff stated that its issues were incorporated in
the statements of Northern, Industries and Northern Indiana,
and the OCA and, additionally, as outlined in the Order of
Notice.
The Hearing Examiner's report was filed on April
29, 1998. The Hearing Examiner recommended that the
Commission issue an order approving the proposed procedural
schedule, as amended.
II. COMMISSION ANALYSIS
We find the proposed procedural schedule to be
reasonable and will, therefore, approve it for the duration
of the proceeding.
Based upon the foregoing, it is hereby
ORDERED, that the procedural schedule delineated
above is APPROVED.
By order of the Public Utilities Commission of New
Hampshire this thirteenth day of May, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary