NiSource Inc. has asked the Federal Energy Regulatory Commission (FERC) to condition its approval of the nation's largest electric utility merger to avoid operational and competitive impacts on NiSource and its Northern Indiana Public Service Company (NIPSCO) electric customers.

FERC is in the process of evaluating Exelon Corp.'s proposed acquisition of Public Service Enterprise Group (PSEG). NiSource does not oppose the merger of Exelon and PSEG.

Exelon currently uses various transmission lines -- including those owned by NIPSCO and dispatched by the Midwest Independent Transmission System Operator (MISO) -- to flow power east from its Illinois generating plants to serve electric demand in the PJM Interconnection, including Exelon loads in Pennsylvania. This activity already causes line loading and operational issues for NIPSCO, which NIPSCO believes could escalate if Exelon increases its west-to-east transmission of electricity after the merger.

In its filing, NiSource is asking FERC to protect NIPSCO's ability to provide reliable power at the most reasonable cost to its residential, commercial and industrial customers in northern Indiana, as well as to ensure a fair and competitive wholesale electric marketplace, by requiring Exelon and PSEG to mitigate the impact of their west-to-east transmission flows on NIPSCO's facilities and, therefore, customers.

Exelon's west-to-east transmission flow also affects NiSource subsidiary Whiting Clean Energy's ability to compete in Midwest wholesale electric markets. Whiting Clean Energy is a 525-MW combined cycle gas cogeneration facility located on the BP Whiting Refinery property in Whiting, Ind.