Vectren 2012 Annual Report Download - page 9

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ProLiance lowered its pipeline transportation and storage costs to
approximately $55 million for all of 2012, compared to $73 million in
2011. In addition to these reductions, additional opportunities exist
to renegotiate or drop contracts with annual demand costs of $13
million in 2013 and another $9 million by 2015. Similarly, efforts to
further lower pipeline and storage demand costs continue.
Before I close the year-end review, I want to bid farewell to an
individual who has been critical to Vectren’s success since our
inception: Jerry Ulrey, our former vice president of regulatory affairs
and fuels, who retired after more than 25 years of service to our
company. Jerry was instrumental in developing the backbone of
our regulatory strategies and during his tenure, successfully led and
worked with teams on many key projects, including all of our rate
case proceedings and the launch of the Choice program in Ohio.
I feel confident in the future growth of Vectren – certainly after the
unprecedented financial performance of 2012, but also with the
strategy and initiatives we have in place for the years ahead. Utility
performance will continue to drive earnings, and all four utilities,
especially our three gas utilities, are well-positioned for steady
growth as investments in new infrastructure will set the tone for the
next several years. For our nonutility companies, we expect more
consistent, less-volatile financial performance overall, and our focus
will remain on the growth of our non-commodity businesses to
help achieve that goal. Our strong balance sheet, favorable credit
ratings and record of 53 consecutive years of dividend growth
demonstrate why many choose to make an investment in our
company. Furthermore, with our focus on cost control, a commitment
to corporate citizenship and our experienced management team,
I believe we’ll continue to consistently take advantage of the
groundwork we have laid to ensure we meet the expectations of all
stakeholders for years ahead.
Carl L. Chapman
Chairman, President & CEO
Vectren Corporation
February 15, 2013
Reducing Utility Interest Expense
$85
$80
$75
$70
$65
$60
Utility Interest Expense (in millions)
2010 2011 2012
Refinancing Benefits
By taking advantage of lower interest
rates, successful refinancing efforts have
helped us reduce interest expense for the
utility group, which will ultimately minimize
rate impacts of needed infrastructure
investments in the coming years.
7