Vectren 2010 Annual Report Download - page 18

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System Load
Total load for each of the years 2006 through 2010 at the time of the system summer peak, and the related reserve margin, is
presented below in MW.
Date of summer peak load 8/4/2010 6/22/2009 7/21/2008 8/8/2007 8/10/2006
Total load at peak
(1)
1,275 1,143 1,167 1,341 1,325
Generating capability 1,298 1,295 1,295 1,295 1,351
Firm purchase supply 136 136 135 130 107
Interruptible contracts & direct load control 62 62 62 62 62
Total power supply capacity 1,496 1,493 1,492 1,487 1,520
Reserve margin at peak 17% 31% 28% 11% 15%
(1) The total load at peak is increased 25 MW in 2007 and 2006 from the total load actually experienced. The additional 25 MW represents
load that would have been incurred if the Summer Cycler program had not been activated. The 25 MW is also included in the
interruptible contract portion of the Company’s total power supply capacity in those years. On the date of peak in 2008-2010 the
Summer Cycler program was not activated.
The winter peak load for the 2009-2010 season of approximately 916 MW occurred on January 8, 2010. The prior year winter
peak load was approximately 883 MW, occurring on January 15, 2009.
Generating Capability
Installed generating capacity as of December 31, 2010, was rated at 1,298 MW. Coal-fired generating units provide 1,000 MW
of capacity, natural gas or oil-fired turbines used for peaking or emergency conditions provide 295 MW, and in 2009 SIGECO
purchased a landfill gas electric generation project which provides 3 MW. Electric generation for 2010 was fueled by coal (98
percent) and natural gas (2 percent). Oil was used only for testing of gas/oil-fired peaking units. The Company generated
approximately 5,136 GWh in 2010. Further information about the Company’s owned generation is included in “Item 2
Properties.”
There are substantial coal reserves in the southern Indiana area, and coal for coal-fired generating stations has been supplied
from operators of nearby coal mines, including coal mines in Indiana owned by Vectren Fuels, Inc. (Vectren Fuels), a wholly
owned subsidiary of the Company. Approximately 2.2 million tons were purchased for generating electricity during 2010, of
which approximately 90 percent was supplied by Vectren Fuels from its mines and third party purchases. This compares to 2.8
million tons and 3.2 million tons purchased in 2009 and 2008, respectively. The utility’s coal inventory was approximately 1
million tons at December 31, 2010 and 2009.
The average cost of coal per ton consumed for the last five years was $67.01 in 2010, $61.67 in 2009, $42.50 in 2008, $40.23
in 2007, and $37.51 in 2006. Effective January 1, 2009, SIGECO began purchasing coal from Vectren Fuels under new coal
purchase agreements. The term of these coal purchase agreements continues to December 31, 2014, with prices specified
originally ranging from two to four years. The prices in these contracts were at or below market prices for Illinois Basin coal at
the time of execution and were subject to a bidding process with third parties. The IURC has found that costs incurred under
these contracts are reasonable (See Rate and Regulatory Matters in Item 7.)
Firm Purchase Supply
The Company has a 1.5 percent interest in the Ohio Valley Electric Corporation (OVEC). OVEC is comprised of several electric
utility companies, including SIGECO, and supplies power requirements to the United States Department of Energy’s (DOE)
uranium enrichment plant near Portsmouth, Ohio. The participating companies can receive from OVEC, and are obligated to
pay for, any available power in excess of the DOE contract demand. At the present time, the DOE contract demand is
essentially zero. The Company’s 1.5 percent interest in OVEC makes available approximately 30 MW of capacity. The
Company purchased approximately 193 GWh from OVEC in 2010.