Vectren 2008 Annual Report Download - page 6

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4 Vectren 2008
Assisting Natural Gas Customers
At the core of Live Smart are natural gas rate structures that
align the interests of our utilities with those of our customers
and allow us to partner with them to use less natural gas
while providing the utilities an opportunity to earn a fair
return. Accompanying the rate design in Indiana are energy
efciency programs, known as Conservation Connection, that
have proven quite effective in reducing customers’ energy
costs. In fact, since the program’s inception in December
2006, Vectren has contributed approximately $8.8 million
toward Indiana customers’ energy efciency efforts, which
are projected to reduce their energy bills in excess of
$30 million over the next 15 years.
In Ohio, we have positioned ourselves to duplicate the
successful Indiana efforts. Included in our recent Ohio rate
order was the approval for the expenditure of up to $5
million annually for customer energy efciency programs.
The programs, which will debut in April, include rebate
offerings on high-efciency natural gas appliances for
residential customers and incentives for small business owners.
In addition, Vectren received authority to continue its low-
income weatherization program, which provides free home
weatherization services to qualifying customers to help lower
their natural gas bills.
Also, we agreed to replace the decoupling mechanism in
our Ohio service territory with a straight xed variable rate
design, which was implemented in February. After a one-year
phase in period, this rate structure will recover the company’s
xed distribution costs through a at monthly customer charge
rather than based on customers’ usage. This allows Vectren
to promote ways to use less natural gas, which will have the
greatest impact on reducing customers’ overall natural gas
bills since approximately 70 percent of the bill represents the
commodity cost of the gas.