Vectren 2012 Annual Report Download - page 22

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20
methane levels were lowered by adjusting airflow near the equipment. Other mining operations continued during this
period. No injuries or property damage resulted from the incident.
More detailed information about the Company’s mines, including safety-related data, can be found at MSHA’s website,
www.MSHA.gov. Prosperity operates under the MSHA identification number 1202249; Oaktown 1 operates under the
identification number 1202394; and Oaktown 2’s identification number is 1202418. Mine safety-related data included on the
MSHA website is influenced by the size of the mine, the level of activity at the mine, and the mine inspector’s judgment, among
other factors. These factors can impact the comparability of information from mine to mine and time period to time period.
Given incidents at coal mines of other companies, a significant increase in the frequency and scope of MSHA inspections
continues. The MSHA recently proposed new regulations related to the level of allowable respirable dust and the utilization of
proximity detection devices. In addition, MSHA no longer has to wait for final orders of citations before placing a mine on a
“pattern of violation” status, and the initial step of notifying mine operators and giving them time to reduce instances of violations
has been eliminated.
Energy Marketing
ProLiance
ProLiance, a nonutility energy marketing affiliate of Vectren and 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 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 contracted for approximately 97 percent of its natural gas purchases through ProLiance in 2012.
For the year ended December 31, 2012, ProLiance’s revenues, including sales to Vectren companies, were $1.0 billion,
compared to $1.4 billion in 2011 and $1.5 billion in 2010. Summarized financial data regarding ProLiance’s operations are
included in Note 7 to the Consolidated Financial Statements included in Item 8. At December 31, 2012, the ProLiance customer
base was 2,012 customers, compared to 1,950 customers in 2011 and 1,789 customers in 2010.
Vectren Source
Vectren Source, a former wholly owned subsidiary, provided natural gas and other related products and services in the Midwest
and Northeast United States. On December 31, 2011, the Company sold Vectren Source for $84.3 million, excluding minor
working capital adjustments. Gas sold by Vectren Source approximated 25.3 MMDth in 2011 and 21.0 MMDth in
2010. Average customers served by Vectren Source were 254,000 in 2011 and 203,000 in 2010. Vectren Source generated
approximately $150 million in revenues for 2011, compared to $143 million in 2010.
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 a leveraged lease, among other investments. Investments at
December 31, 2012, include two Haddington Energy Partnerships both approximately 40 percent owned; and wholly owned
subsidiaries, Southern Indiana Properties, Inc. and Energy Realty, Inc.
Personnel
As of December 31, 2012, the Company and its consolidated subsidiaries had approximately 5,400 employees. Of those
employees, 700 are subject to collective bargaining arrangements negotiated by Utility Holdings and 3,000 are subject to
collective bargaining arrangements negotiated by Infrastructure Services. The 20 percent increase in total employees,
compared to the prior year, is attributable to the overall growth of Infrastructure Services.