Vectren 2008 Annual Report Download - page 17

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15
System Load
Total load for each of the years 2004 through 2008 at the time of the system summer peak, and the related reserve
margin, is presented below in MW.
Date of summer peak load 7/21/2008 8/08/2007 8/10/2006 7/25/2005 7/13/2004
Total load at peak
(1)
1,242 1,341 1,325 1,315 1,222
Generating capability 1,295 1,295 1,351 1,351 1,351
Firm purchase supply 135 130 107 107 105
Interruptible contracts 62 62 62 76 51
Total power supply capacity 1,492 1,487 1,520 1,534 1,507
Reserve margin at peak 20% 11% 15% 17% 23%
(1) The total load at peak is increased 25 MW in 2007-2005 from the total load actually experienced. The additional 25 MW
represents load that would have been incurred if the Summer Cycler program had not been activated. The 25 MW is also
included in the interruptible contract portion of the Company’s total power supply capacity in those years. On the date of
peak in 2008 and 2004, the Summer Cycler program was not activated.
The winter peak load for the 2007-2008 season of approximately 960 MW occurred on January 25, 2008. The prior
year winter peak load was approximately 961 MW, occurring on December 7, 2006.
Generating Capability
Installed generating capacity as of December 31, 2008, was rated at 1,295 MW. Coal-fired generating units provide
1,000 MW of capacity, and natural gas or oil-fired turbines used for peaking or emergency conditions provide 295
MW. Electric generation for 2008 was fueled by coal (98 percent) and natural gas (2 percent). Oil was used only
for testing of gas/oil-fired peaking units. The Company generated approximately 6,653 GWh in 2008. Further
information about the Company’s owned generation is included in Item 2 Properties.
There are substantial coal reserves in the southern Indiana area, and coal for coal-fired generating stations has been
supplied from operators of nearby coal mines, including coal mines in Indiana owned by Vectren Fuels, Inc., a
wholly owned subsidiary of the Company. Approximately 3.2 million tons were purchased for generating
electricity during 2008, of which approximately 91 percent was supplied by Vectren Fuels, Inc. from its mines and
third party purchases. The average cost of coal paid by the utility in generating electric energy for the years 2004
through 2008 follows:
Year Ended December 31,
Average Delivered 2008 2007 2006 2005 2004
Cost per Ton 42.50$ 40.23$ 37.51$ 30.27$ 27.06$
Cost per MWh 20.84 19.78 18.44 14.94 13.06
On January 1, 2009, SIGECO began purchasing coal from Vectren Fuels, Inc. (Fuels) under new coal purchase
agreements. The term of these coal purchase agreements continues to December 31, 2014, with prices specified
ranging from two to four years. New pricing reflects current Illinois Basin market prices and will result in
substantially higher costs in 2009, compared to prior years.
Firm Purchase Supply
The Company maintains a 1.5 percent interest in the Ohio Valley Electric Corporation (OVEC). OVEC is
comprised of several electric utility companies, including SIGECO, and supplies power requirements to the United
States Department of Energy’s (DOE) uranium enrichment plant near Portsmouth, Ohio. The participating
companies are entitled to receive from OVEC, and are obligated to pay for, any available power in excess of the
DOE contract demand. At the present time, the DOE contract demand is essentially zero. Because of this