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.
               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
          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 
          Company Data Responses                    May 21, 1998 
          Technical Session                         May 26, 1998 
          Testimony by Staff and                    June 3, 1998 
          Data Requests by the Company             June 10, 1998 
          Data Responses by Staff and              June 17, 1998 
          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
               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.
               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