Vectren 2013 Annual Report Download - page 50

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Current Initiatives to Increase Conservation & Reduce Emissions
The Company is committed to a policy that reduces greenhouse gas emissions and conserves energy usage. Evidence of this
commitment includes:
• Focusing the Company’s mission statement and purpose on corporate sustainability and the need to help customers
conserve and manage energy costs;
• Building a renewable energy portfolio to complement base load coal-fired generation even though there are no mandated
renewable energy portfolio standards;
• Implementing conservation initiatives in the Company’s Indiana and Ohio gas utility service territories;
• Implementing conservation and demand side management initiatives in the electric service territory;
• Evaluating potential carbon requirements with regard to new generation, other fuel supply sources, and future
environmental compliance plans;
• Reducing the Company’s carbon footprint by measures such as utilizing hybrid vehicles and optimizing generation
efficiencies by utilizing dense pack technology; and
• Developing renewable energy and energy efficiency performance contracting projects through its wholly owned
subsidiary, Energy Systems Group.
Impact of Legislative Actions & Other Initiatives is Unknown
If regulations are enacted by the EPA or other agencies or if legislation requiring reductions in CO2 and other GHG's or
legislation mandating a renewable energy portfolio standard is adopted, such regulation could substantially affect both the costs
and operating characteristics of the Company’s fossil fuel generating plants, nonutility coal mining operations, and natural gas
distribution businesses. At this time and in the absence of final legislation or rulemaking, compliance costs and other effects
associated with reductions in GHG emissions or obtaining renewable energy sources remain uncertain. The Company has
gathered preliminary estimates of the costs to control GHG emissions. A preliminary investigation demonstrated costs to comply
would be significant, first with regard to operating expenses and later for capital expenditures as technology becomes available
to control GHG emissions. However, these compliance cost estimates are based on highly uncertain assumptions, including
allowance prices if a cap and trade approach were employed, and energy efficiency targets. Costs to purchase allowances that
cap GHG emissions or expenditures made to control emissions should be considered a federally mandated cost of providing
electricity, and as such, the Company believes such costs and expenditures should be recoverable from customers through
Senate Bill 251 referenced above.
Senate Bill 251 also established a voluntary clean energy portfolio standard that provides incentives to Indiana electricity
suppliers participating in the program. The goal of the program is that by 2025, at least 10 percent of the total electricity
obtained by the supplier to meet the energy needs of Indiana retail customers will be provided by clean energy sources, as
defined. In advance of a federal portfolio standard and Senate Bill 251, SIGECO received regulatory approval to purchase a 3
MW landfill gas generation facility from a related entity. The facility was purchased in 2009 and is directly connected to the
Company's distribution system. In 2008 and 2009, the Company executed long-term purchase power commitments for a total of
80 MW of wind energy. The Company currently has approximately 5 percent of its electricity being provided by clean energy
sources due to the long-term wind contracts and landfill gas investment.
Manufactured Gas Plants
In the past, the Company operated facilities to manufacture natural gas. Given the availability of natural gas transported by
pipelines, these facilities have not been operated for many years. Under current environmental laws and regulations, those that
owned or operated these facilities may now be required to take remedial action if certain contaminants are found above the
regulatory thresholds.
In the Indiana Gas service territory, the existence, location, and certain general characteristics of 26 gas manufacturing and
storage sites have been identified for which the Company may have some remedial responsibility. A remedial investigation/
feasibility study (RI/FS) was completed at one of the sites under an agreed order between Indiana Gas and the IDEM, and a
Record of Decision was issued by the IDEM in January 2000. The remaining sites have been submitted to the IDEM's Voluntary
Remediation Program (VRP). The Company has identified its involvement in five manufactured gas plant sites in SIGECO’s
service territory, all of which are currently enrolled in the IDEM’s VRP. The Company is currently conducting some level of
remedial activities, including groundwater monitoring at certain sites.