For immediate release: May 08, 2006
Posted by: [OUCC]
Contact: Anthony Swinger
Phone: 1-888-441-2494

Vectren natural gas agreement to encourage unprecedented energy conservation

UPDATE: An IURC order in this case was issued on Dec. 1, 2006.

OUCC News Release, issued May 8, 2006:

Indiana's most robust energy efficiency efforts to date - encouraging natural gas conservation - will be launched under a new agreement between the Indiana Office of Utility Consumer Counselor (OUCC) and Vectren Energy Delivery. The agreement has been filed with the Indiana Utility Regulatory Commission (IURC) and will require IURC approval to take effect.

The agreement, if approved, will result in Vectren's annual commitment of more than $4.3 million toward efforts that include a comprehensive consumer education campaign throughout the utility's service territory, Website-based energy audit tools, rebate programs for energy efficient appliances and customer call center employees who will be designated for energy assistance inquiries.

"Energy efficiency and conservation - along with new efforts to promote these resources - are more important than ever, given the high energy prices we continue to see and will likely face for the foreseeable future," said Indiana Utility Consumer Counselor Susan L. Macey. "This bold, innovative approach will empower Vectren's customers with new tools that will help them reduce consumption and lower their bills, while adjusting the utility?s rate design so it no longer has the incentive to encourage higher consumption to increase profitability."

Wholesale natural gas costs on the competitive national market have reached record-high levels and experienced unprecedented volatility throughout much of the past year, affecting utilities and their customers throughout the nation. Indiana customers have yet to experience the true impact of these national trends given this past winter's warm weather.

"These initiatives should help in the national efforts to dramatically reduce natural gas usage while helping Vectren's customers most efficiently heat their homes next winter," said John Clark, Senior Adviser to Gov. Mitch Daniels and Director of the Indiana Office of Energy and Defense Development. "More importantly, though, we view this collaborative effort as a first step in leading other gas and electric utilities toward a statewide approach that will help all Hoosiers reduce their energy bills, permitting them to have greater disposable income for other services, and sending a message to business and industry that Indiana is a smart choice when deciding on a location. This approach is a vital component in Indiana?s plan for continued economic growth."

If approved, customers will be assessed a minimal monthly charge to fund the energy efficiency programs, while Vectren will be able to collect the return - through its distribution rates - that was authorized by the IURC in 2004. A similar agreement regarding Vectren's Ohio subsidiary is currently awaiting approval from the Public Utilities Commission of Ohio (PUCO).

Vectren's new energy conservation efforts in Indiana - in their first year - would be overseen by a board with broad representation by Vectren, the OUCC, the IURC, the Alliance to Save Energy, state energy leaders, and university representatives. After the first year, an independent third party administrator would oversee Vectren's energy efficiency programs; its oversight would include measuring the effectiveness of these programs and providing ongoing guidance on how to most effectively promote energy efficiency to help drive down natural gas costs. In the end, energy efficiency will help customers reduce their natural gas usage, resulting in overall savings on their heating bills.

This case will not affect Vectren's quarterly gas cost adjustment (GCA) proceedings, and will also not affect rates, charges or service for Vectren's electric utility in southwestern Indiana. Vectren provides natural gas service to approximately 665,000 customers in 56 Indiana counties.

The Indiana Office of Utility Consumer Counselor (OUCC) is the state agency that represents the interests of all utility consumers and the public in matters related to the provision of utility services. The agency is active in proceedings before regulatory and legal bodies, and committed to giving consumers a voice in the creation of utility service policy. Residential, commercial and industrial customers with questions or concerns regarding utility service can contact the OUCC toll-free at 1-888-441-2494 or online at

(IURC Cause No. 43046)


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