NiSource Inc. profits dropped 44 percent in the third quarter, mainly due to costs to achieve a settlement for pipeline modernization.
The company had third quarter net earnings of $19.3 million, or 6 cents per share, as compared to net earnings of $34.7 million, or 12 cents per share, in the third quarter of 2011, according to NiSource's third quarter earnings news release.
At the same time, NiSource CEO Robert Skaggs Jr. affirmed the company's 2012 earnings guidance of $1.40 to $1.50 per share in a Friday morning conference call with Wall Street analysts.
The NiSource third quarter earnings release was originally scheduled for Tuesday, but was pushed back to Friday because of the effects of Hurricane Sandy on Wall Street and the East Coast.
For its pipeline modernization program, NiSource plans to spend about $4 billion over time to update its Columbia Gas Transmission system that ships bulk natural gas from the Gulf of Mexico to the Mid-Atlantic and other states, Skaggs said. The settlement was submitted to the Federal Energy Regulatory Commission in early September and NiSource hopes to have an answer before Dec. 1.
NiSource realized a $50 million reduction to third quarter net operating earnings in achieving that settlement with customers.
NiSource is the parent company of NIPSCO, which has 786,000 natural gas customers and 457,000 electric customers in northern Indiana.
Operating earnings at NIPSCO's electric business increased to $77.7 million in the third quarter, from $72.9 million in the third quarter a year ago, due to the impact of NIPSCO's rate case settled late last year.
Skaggs also updated analysts on several big capital projects at NIPSCO, including the planned start next year of the $250 million flue gas desulfurization project at the Michigan City Generating Station. That project received approval from state regulators in September.
In the same month, NIPSCO won federal approval to partner with another company to build a $330 million high-voltage electric line in central Indiana. The 66-mile Reynolds-to-Greentown line will be a key link between power producers and customers throughout the Midwest.
Skaggs told analysts it will mainly be paid for by charging utilities and power producers throughout the Midwest that will use the line to get electricity where it's needed.