Filed by:  NiSource Inc.
                    Pursuant to Rule 425 under the Securities Act of 1933

                                  Subject Company:  Columbia Energy Group
                                Registration Statement File No: 333-33896

        On October 13, 2000, NiSource Inc. and Columbia Energy Group
   began distributing a letter to Columbia shareholders, announcing that
   the companies have scheduled November 1, 2000 as the Effective Time of
   the merger between NiSource and Columbia Energy Group.  On that basis,
   the Election Deadline will be Monday, October 30, 2000, 5:00 p.m. New
   York City time.  The text of the joint letter is set forth below.

        The bracketed statement appeared as a legend on the letter for
   those shareholders who had been sent a previous letter dated October
   10, which contained a misstatement.


                TEXT OF JOINT LETTER TO COLUMBIA SHAREHOLDERS
                              OCTOBER 13, 2000

   [NISOURCE LOGO]                                       [COLUMBIA LOGO]


      [THIS LETTER CORRECTS A MISSTATEMENT IN THE LAST PARAGRAPH ON THE
   FIRST PAGE OF THE LETTER DATED OCTOBER 10, 2000 RELATING TO THE
   MEASURING PERIOD FOR DETERMINING THE AVERAGE SHARE PRICE OF NISOURCE
                COMMON STOCK AND UPDATES PRICE INFORMATION.]

   October 12, 2000

   Dear Columbia Shareholders:

        We are pleased to announce that we have now scheduled November 1,
   2000 as the Effective Time of the merger between NiSource Inc. and
   Columbia Energy Group.  ON THAT BASIS, THE ELECTION DEADLINE WILL BE
   MONDAY, OCTOBER 30, 2000, 5:00 P.M., NEW YORK CITY TIME.  If the dates
   should have to change, we will announce the change in a press release,
   on our websites at www.nisource.com and www.columbiaenergygroup.com
   and in a filing with the SEC.

        If you wish to receive New NiSource stock in the merger,
   ChaseMellon Shareholder Services, L.L.C., the Exchange Agent, must
   receive your instructions prior to the Election Deadline.  If you are
   a registered shareholder, you must send the Exchange Agent your
   properly completed Stock Election Form together with either (a) your
   Columbia stock certificate(s) or (b) a properly completed notice of
   guaranteed delivery.  If you hold your shares in "street-name," an
   election must be made on your behalf by your bank or broker.  You
   should have received information about the stock election from your
   bank or broker.

        As we have previously informed you, you may elect to receive New
   NiSource stock for all or a portion of your Columbia shares.  If you
   do not make a stock election prior to the Election Deadline, you will





   receive cash and New NiSource SAILS for all of your Columbia shares.
   The number of Columbia shares converted into New NiSource shares will
   be prorated if Columbia shareholders elect stock for more than 30% of
   the total outstanding Columbia shares.  Additionally, stock elections
   for at least 10% of Columbia's outstanding shares must be made;
   otherwise all Columbia shareholders will receive cash and SAILS.  WE
   URGE YOU TO CONTACT YOUR FINANCIAL ADVISOR BEFORE DETERMINING WHETHER
   OR NOT TO MAKE A STOCK ELECTION, SINCE THE VALUE OF THE CONSIDERATION
   THAT YOU WILL RECEIVE MAY DIFFER SIGNIFICANTLY DEPENDING UPON YOUR
   INDIVIDUAL FINANCIAL SITUATION.

   ==>  If you elect New NiSource stock, you will receive for each share
        of Columbia, subject to proration, a number of shares of New
        NiSource common stock equal to $74.00 divided by the average
        closing price of NiSource common stock during the 30 consecutive
        trading days immediately preceding the second trading day prior
        to completion of the merger, but not more that 4.4848 shares.
        Since the Effective Time of the merger is expected to be November
        1, 2000, the 30 day trading period would have begun on September
        18.  As of the date of this letter, 19 trading days have elapsed
        and the average trading price per share of NiSource has been
        $24.42.  AS LONG AS THE 30-DAY AVERAGE CLOSING PRICE OF NISOURCE
        SHARES FROM SEPTEMBER 18 TO OCTOBER 27 EXCEEDS $16.50, COLUMBIA
        SHAREHOLDERS ELECTING STOCK WILL RECEIVE, ON THIS BASIS AND
        SUBJECT TO PRORATION, NEW NISOURCE SHARES VALUED AT $74.00.

   ==>  Columbia shareholders who do not receive New NiSource stock will
        receive $70.00 cash and $2.60 stated amount of SAILS in exchange
        for each of their Columbia shares.  Trading of SAILS has
        commenced in the over-the-counter market on a "when issued"
        basis.  On October 12, the bid price of SAILS in that limited
        market was $1.88.  ON THIS BASIS, THE VALUE ON OCTOBER 12 OF THE
        COMBINATION OF CASH AND SAILS WAS $71.88.

        Generally speaking, Columbia shareholders who receive only New
   NiSource shares will not recognize a taxable gain or loss except for
   cash received for fractional amounts.  In most cases, an exchange for
   cash and SAILS will be treated as a taxable event, and Columbia
   shareholders who receive SAILS will also be required to include in
   gross income their allocable share of the original issue discount that
   accrues with respect to the debentures included in their SAILS, even
   though they will receive no cash payment.  YOU ARE URGED TO CONTACT
   YOUR TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING
   EITHER STOCK OR CASH AND SAILS.  You should also refer to the
   description of tax consequences beginning on page 87 of the Joint
   Proxy Statement/Prospectus sent to Columbia shareholders on April 27,
   2000.





        If you have any questions regarding the stock election, or need
   additional copies of the stock election materials, please call
   Innisfree M&A Incorporated at 1-888-750-5833, or the Exchange Agent at
   1-800-685-4258.

   NISOURCE INC.                                 COLUMBIA ENERGY GROUP






                                 * * * * * *

             This letter contains certain forward-looking statements
             within the meaning of the federal securities laws; these
             forward-looking statements are subject to various risks and
             uncertainties.  The factors that could cause actual results
             to differ materially from the projections, forecasts,
             estimates and expectations discussed herein may include
             factors that are beyond the companies' ability to control or
             estimate precisely, such as estimates of future market
             conditions, the behavior of other market participants and
             the actions of the Federal and State regulators.  Other
             factors include, but are not limited to, actions in the
             financial markets, weather conditions, economic conditions
             in the two companies' service territories, fluctuations in
             energy-related commodity prices, conversion activity, other
             marketing efforts and other uncertainties.  Other risk
             factors are detailed from time to time in the two companies'
             SEC reports.  Readers are cautioned not to place undue
             reliance on these forward-looking statements, which speak
             only as of the date of this letter.  The companies do not
             undertake any obligation to publicly release any revisions
             to these forward-looking statements to reflect events or
             circumstances after the date of these stories.

             In addition to other documents filed with the Securities and
             Exchange Commission by the two companies, NiSource and the
             new holding company have filed a registration statement,
             which contains a joint proxy statement/prospectus for
             NiSource Inc. and Columbia Energy Group.  The final joint
             proxy statement/prospectus, dated April 24, 2000, is
             available and has been distributed to the companies'
             shareholders.  Investors and security holders are urged to
             read the joint proxy statement/prospectus and any other
             relevant documents filed with the SEC when they become
             available because they will contain important information.
             Investors and security holders can receive the joint proxy
             statement/prospectus and other documents free of charge at
             the SEC's web site, www.sec.gov, from NiSource Investor
             Relations at 801 East 86th Avenue, Merrillville, Indiana
             46410 or at its web site, www.nisource.com, or from Columbia
             Investor Relations at 13880 Dulles Corner Lane, Herndon,
             Virginia 20171 or at its web site,
             www.columbiaenergygroup.com.