Vectren 2010 Annual Report Download - page 82

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80
Firm Transportation and Storage Commitments
ProLiance has various firm transportation and storage agreements with only minimal support from Vectren or Citizens. (See
Note 15 regarding corporate guarantees.) Under these agreements, ProLiance must make specified minimum payments which
extend through 2029. At December 31, 2010, the estimated aggregated amounts of such required future payments were
$75.8 million, $66.6 million, $50.9 million, $45.7 million, $36.5 million, and $259.5 million for 2011, 2012, 2013, 2014, 2015, and
thereafter, respectively. During 2010, 2009, and 2008, fixed payments under these agreements were $76.8 million,
$63.0 million, and $68.9 million, respectively. ProLiance also made variable payments under these agreements in 2010, 2009,
and 2008. Variable payments include storage injection and withdrawal charges, and commodity transportation charges.
Transactions with ProLiance
Purchases from ProLiance for resale and for injections into storage for the years ended December 31, 2010, 2009, and 2008,
totaled $437.7 million, $533.4 million, and $940.1 million, respectively. Amounts owed to ProLiance at December 31, 2010, and
2009, for those purchases were $59.6 million and $54.1 million, respectively, and are included in Accounts payable to affiliated
companies in the Consolidated Balance Sheets. Vectren received regulatory approval on April 25, 2006, from the IURC for
ProLiance to provide natural gas supply services to the Company’s Indiana utilities through March 2011. On November 3, 2010,
a settlement agreement was filed with the IURC providing for ProLiance’s continued provision of gas supply services to the
Company’s Indiana utilities and Citizens Gas for the period of April 1, 2011 through March 31, 2016. The settlement has been
agreed to by all of the representatives that were parties to the prior settlement. An order is anticipated during the first quarter of
2011. Amounts charged by ProLiance for gas supply services are established by supply agreements with each utility.
Undistributed Earnings
As of December 31, 2010, Vectren’s share of ProLiance’s undistributed earnings approximated $110 million and represents
substantially all of the undistributed earnings of unconsolidated affiliates.
6. Nonutility Real Estate & Other Legacy Holdings
Within the Nonutility business segment, there are legacy investments involved in energy-related infrastructure and services, real
estate, leveraged leases, and other ventures. As of December 31, 2010 and 2009, total remaining legacy investments included
in the Other Businesses portfolio total $52.7 million and $64.5 million, respectively. Further separation of that 2010 investment
by type of investment follows:
December 31, 2010
Value Included In
(In millions)
Carrying
Value
Other
Nonutility
Investments
Investments in
Unconsolidated
Affiliates
Commercial real estate investments 19.8$ 19.8$ -$
Leveraged leases 17.9 17.9 -
Affordable housing projects 7.2 0.2 7.0
Haddington energy partnerships 3.4 - 3.4
Other investments 4.4 3.0 1.4
52.7$ 40.9$ 11.8$
Haddington Energy Partnerships
The Company has an approximate 40 percent ownership interest in Haddington Energy Partners, LP (Haddington I) and
Haddington Energy Partners II, LP (Haddington II). As of December 31, 2010, these Haddington ventures have interests in two
remaining mid-stream energy related investments. Both Haddington ventures are investment companies accounted for using
the equity method of accounting. During the second quarter of 2010, the Company recorded its share of the decline in fair value
and also impaired a note receivable associated with Haddington’s investment in a liquefied natural gas facility. In total, the
charge was approximately $6.5 million, of which, $6.1 million is reflected in Equity in earnings (losses) of unconsolidated
affiliates and $0.4 million is reflected in Other income-net, for the twelve months ended December 31, 2010. At December 31,
2010, the Company’s remaining $3.4 million investment in the Haddington ventures is related to payments to be received
associated with the sale of a compressed air storage facility sold in 2009. The Company has no further commitments to invest
in either Haddington I or II.