) Columbia Gas Transmission unit received the consent from the
Federal Energy Regulatory Commission ("FERC") to upgrade its
pipeline infrastructures located in Columbia's service areas. The
company estimates a total capital outlay of around $4 billion
over the period of 10 to 15 years for the program.
Filed on Sep 4, 2012, the plan entailed an initial five-year
investment initiative related to the modernization of pipelines
with an option for further extension. As per the settlement,
NiSource will spend around $300 million per year for system
upgrade and a supplementary $100 million for maintenance purposes
for the period 2013 to 2017.
The scheme highlights individual infrastructure programs and
means to recover revenue requisites to carry on the investment
plans. The modernization and upgrade programs will involve
facility engineering, design, permitting, project management and
The program's objectives are to replace roughly 1,000 miles of
current interstate transmission pipelines which include a
tentative target of replacing 400 miles in the first five years.
In addition, the plan identifies improvement and substitution of
about 50 critical natural gas compressors in the pipelines that
will boost efficiency as well as serve environmental needs.
Other goals which the company will act on are improving
pressures and looping systems as well as bringing in cutting-edge
inspection and maintenance technology to enhance the safety and
reliability of natural gas services without interruptions.
The approval from the regulatory body was considered crucial
in the wake of the pipeline accident suffered by NiSource's
Columbia pipeline in Dec 2012. We anticipate the company to bear
significant cost headwinds in the upcoming quarter related to the
restoration and modernization projects.
However, we believe NiSource will stand to benefit from
natural gas prices which look encouraging in the near term. The
company retains a short-term Zacks Rank #3 (Hold).
Utility companies like
The AES Corporation
CMS Energy Corporation
) are also engaged in modernizing and upgrading their ageing
Based in Merrillville, IN, NiSource is an energy holding
company providing natural gas, electricity, and other products
and services through its subsidiaries. With a market
capitalization of $8.26 billion, the company at present has a
total 7,957 employees.
AES CORP (AES): Free Stock Analysis Report
AVISTA CORP (AVA): Free Stock Analysis Report
CMS ENERGY (CMS): Free Stock Analysis Report
NISOURCE INC (NI): Free Stock Analysis Report
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