Vectren 2008 Annual Report Download - page 21

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19
Energy Infrastructure Services
Energy Infrastructure Services provides underground construction and repair to utility infrastructure through Miller
Pipeline Corporation (Miller) and energy performance contracting and renewable energy services through Energy
Systems Group, LLC (ESG). Miller’s customers include Vectren’s utilities.
Miller Pipeline
Effective July 1, 2006, the Company purchased the remaining 50 percent of Miller from a subsidiary of Duke
Energy Corporation, making Miller a wholly owned subsidiary. The results of Miller’s operations, formerly
accounted for using the equity method, have been included in consolidated results since July 1, 2006. Prior to this
transaction, Miller was 100 percent owned by Reliant Services, LLC (Reliant). Reliant provided facilities locating
and meter reading services to the Company’s utilities, as well as other utilities. Reliant exited the meter reading
and facilities locating businesses in 2006.
Energy Systems Group
Performance-based energy contracting operations and renewable energy services are performed through Energy
Systems Group, LLC (ESG). ESG assists schools, hospitals, governmental facilities, and other private institutions
to reduce energy and maintenance costs by upgrading their facilities with energy-efficient equipment. ESG is also
involved in creating renewable energy projects, including projects to process landfill gas into usable natural gas.
ESG’s customer base is located throughout the Midwest and Southeast United States.
Other Businesses
The Other Businesses group includes a variety of legacy, wholly owned operations and investments that have
invested in energy-related opportunities and services, real estate, and leveraged leases, among other investments.
Major investments at December 31, 2008, include Haddington Energy Partnerships, two partnerships both
approximately 40 percent owned; and wholly owned subsidiaries, Southern Indiana Properties, Inc. and Energy
Realty, Inc.
The Company had an approximate 2 percent equity interest and a convertible subordinated debt investment in
Utilicom Networks, LLC (Utilicom). The Company also had an approximate 19 percent equity interest in
SIGECOM Holdings, Inc. (Holdings), which was formed by Utilicom to hold interests in SIGECOM, LLC
(SIGECOM). SIGECOM provided broadband services, such as cable television, high-speed internet, and advanced
local and long distance phone services, to the greater Evansville, Indiana area. The Company sold its investment in
SIGECOM during 2006. See “Item 7 Management’s Discussion and Analysis of Results of Operations and
Financial Condition” regarding the Company’s Other Businesses for additional information related to transactions
involving Utilicom.
Synthetic Fuel
The Company has an 8.3 percent ownership interest in Pace Carbon Synfuels, LP (Pace Carbon). Pace Carbon
produced and sold coal-based synthetic fuel using Covol technology, and according to US tax law, its members
received a tax credit for every ton of coal-based synthetic fuel sold. In addition, Vectren Fuels, Inc., a wholly
owned subsidiary involved in coal mining, received processing fees from synfuel producers unrelated to Pace
Carbon for a portion of its coal production. Under current tax laws, these synfuel related credits and fees ended on
December 31, 2007. Partnership operations since that date have been insignificant. See “Item 7 Management’s
Discussion and Analysis of Results of Operations and Financial Condition” regarding the Company’s Synfuel-
Related activities for additional information related to Pace Carbon and Vectren Fuels.