Vectren 2010 Annual Report Download - page 80

Download and view the complete annual report

Please find page 80 of the 2010 Vectren annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

78
4. Regulatory Assets & Liabilities
Regulatory Assets
Regulatory assets consist of the following:
A
t December 31,
(
In millions
)
2010 2009
Future amounts recoverable from ratepa
y
ers related to:
B
ene
fi
t
o
blig
at
i
ons
92
.
5
$
83
.
9
$
D
e
f
erre
d I
ncome
taxes
19
.
2
14
.7
A
sset
ret
i
rement
o
blig
at
i
ons
&
ot
h
e
r
2
.
1
4
.
2
113.8
102.8
A
mounts deferred for future recover
y
related to:
Cost recover
y
riders & other 2.8
1.0
2.8
1.0
A
mounts currentl
y
recovered in customer rates related to:
Unamortized debt issue costs & hed
g
in
g
proceeds 35.7
38.1
Demand side mana
g
ement pro
g
rams 9.5
15.3
Indiana authorized trackers 17.3
15.6
Ohio authorized trackers 2.0
8.2
Premiums paid to reacquire debt 3.8
4.3
Other base rate recoveries 4.5
2.6
72.8
84.1
Total regulatory assets 189.4$ 187.9$
Of the $72.8 million currently being recovered in customer rates, $9.5 million that is associated with demand side management
programs is earning a return. The weighted average recovery period of regulatory assets currently being recovered is 16 years.
The Company has rate orders for all deferred costs not yet in rates and therefore believes that future recovery is probable.
Regulatory Liabilities
At December 31, 2010 and 2009, the Company has approximately $333.5 million and $322.1 million, respectively, in Regulatory
liabilities. Of these amounts, $307.5 million and $294.4 million relate to cost of removal obligations. The remaining amounts
primarily relate to timing differences associated with asset retirement obligations and deferred financing costs.
5. Investment in ProLiance Holdings, LLC
ProLiance Holdings, LLC (ProLiance), a nonutility energy marketing affiliate of Vectren and Citizens Energy Group (Citizens),
provides services to a broad range of municipalities, utilities, industrial operations, schools, and healthcare institutions located
throughout the Midwest and Southeast United States. ProLiance’s customers include Vectren’s Indiana utilities and nonutility
gas supply operations as well as Citizens’ utilities. ProLiance’s primary businesses include gas marketing, gas portfolio
optimization, and other portfolio and energy management services. Consistent with its ownership percentage, Vectren is
allocated 61 percent of ProLiance’s profits and losses; however, governance and voting rights remain at 50 percent for each
member; and therefore, the Company accounts for its investment in ProLiance using the equity method of accounting.
The Company, including its retail gas supply operations, contracted for a substantial portion of its natural gas purchases through
ProLiance in 2010, 2009, and 2008.