Exhibit D-18

                          COMMONWEALTH OF MASSACHUSETTS
               OFFICE OF CONSUMER AFFAIRS AND BUSINESS REGULATION

                                  DEPARTMENT OF
                           TELECOMMUNICATIONS & ENERGY
                                ONE SOUTH STATION
                                BOSTON, MA 02110
                                 (617) 305-3500


                                  May 12, 2000

Jonathan G. Katz, Secretary to the Commission
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

          Re:  Sec File No. 70-9551
               Proposed Merger of
               NiSource Inc. and Columbia Energy Group
               ---------------------------------------

Dear Mr. Katz:

          The Department of Telecommunications and Energy (the "Department")
understands that on April __, 2000, NiSource Inc. ("NiSource") and its
wholly-owned subsidiary New NiSource, Inc. ("New NiSource") filed an Amendment
to an Application-Declaration on Form U-1 with the Securities and Exchange
Commission ("SEC") relating to the proposed acquisition by NiSource of Columbia
Energy Group ("Columbia") under an Agreement and Plan of Merger, dated as of
February 27, 2000 and amended and restated as of March 31, 2000 (the "Merger").
NiSource is the parent holding company of, among other subsidiaries, Bay State
Gas Company ("Bay State").

          Bay State is a retail gas distribution company and public utility
subject to the Department's regulatory authority for ratemaking and other
purposes pursuant to chapter 164 of the Massachusetts General Laws. The
Department, in Bay State Gas Company, D.T.E. 98-31 (Nov. 5, 1998), approved the
merger of Bay State with NIPSCO Industries, Inc. (as NiSource was then known).
The Department understands that following the proposed acquisition of Columbia,
Bay State will either continue to be a subsidiary of NiSource or will become a
subsidiary of New NiSource (which will then change its name to NiSource).





          Representatives of Bay State have informed the Department that the SEC
has requested advice concerning the effects of the Merger on state regulation
from agencies which have regulatory jurisdiction over gas distribution companies
in the NiSource System. Even after SEC approval of the Merger, Bay State will
remain a retail gas distribution company and public utility, subject to the
Department's regulatory authority pursuant to Massachusetts General Laws Chapter
164. Please be advised that the Department hereby affirms that it has adequate
resources to enforce its statutory authority and thereby protect ratepayers
served by Bay State after the Merger is effectuated. Moreover, the Department
will continue to exercise its authority over Bay State after the Merger. The
Merger should have no detrimental effect on the Department's jurisdiction or its
ability to protect Bay State's Massachusetts ratepayers.

          Should you require any additional information, please do not hesitate
to contact my office or the Department's General Counsel, Paul G. Afonso, at
617-305-3500.

                                        Very truly yours,

                                        /s/ James Connelly

                                        James Connelly
                                        Chairman