Vectren 2008 Annual Report Download - page 7

Installing programmable thermostats. Sealing windows
and doors. Turning off unused electronics. Cumulatively,
even these small adjustments can make a big difference.
Vectren’s utilities are positioned to help customers use
energy wisely.
Another key Ohio initiative that began in 2008 was the
process of exiting the merchant function. When this multi-
year transition is fully approved by Ohio regulators, Vectren
will no longer buy natural gas for any of its customers who
instead will purchase the gas commodity from a regulator-
approved list of suppliers. This will provide customers more
pricing options and additional services through various
suppliers and allow Vectren to focus on the safe and reliable
delivery of natural gas.
Throughout both states in 2009, we will continue specic
programs to maintain and upgrade our natural gas delivery
infrastructure. These long-term, capital-intensive projects are
vital to maintaining the safety and reliability of Vectren’s
20,000-mile pipeline system.
New Electric Landscape
On the electric side, we are working aggressively to
implement the same approach to energy efciency. Working
with Indiana regulators, Vectren is pursuing an electric
decoupling mechanism that will, just as in our gas business,
align our interests with those of the customers to promote
using less energy. A package of rebate offerings and
efcient lighting initiatives is planned to assist customers in
their efforts to be energy efcient and is projected to save
nearly 100,000 megawatt-hours (MWh) over the initial
three-year period. We’re hopeful this regulatory process can
be successfully completed by summer 2009.
In addition to our efforts to promote efcient use of
electricity, we have begun utilizing local sources of renewable
power. This past summer Vectren purchased 30 megawatts
(MW) of generation from a Benton County, Indiana, wind
farm; and in early 2009, we led for regulatory approval to
add another 50 MW from a neighboring Benton County wind
farm. Also, our electric utility has received approval from
Indiana regulators to purchase a local project developed by
our subsidiary ESG that takes landll methane and converts it
to electricity, and the utility is now in the process of nalizing
due diligence.
Longer-term, we will continue our efforts to minimize our
carbon footprint and prepare our utilities, especially
on the electric side, for potential carbon legislation.
Although there are many unknown variables surrounding
details and timelines of the anticipated legislation, we
are already taking proactive steps to better address
the available opportunities for improvement within our
company. Such efforts include investing in renewable
energy projects and upgrades to boost the generation
efficiency of our steam turbines, which in turn will
require the burning of less coal. Additionally, we have
the flexibility to modify the level of our participation
in the wholesale power markets to reduce overall
emissions and reduce costs related to complying with new
environmental regulations. We also are analyzing various
impacts potential environmental legislation could have on
customers’ energy bills.
Sustainability and Safety Efforts
Our utilities have completed a number of sustainability and
energy efciency efforts of their own. We signed a 10-
year agreement in May to provide up to 200,000 tons per
year of y ash, a by-product of our coal-red generation,
to Geocycle US, a wholly owned subsidiary of Holcim (US)
Inc., for use in cement manufacturing starting in late 2009. To
support this agreement, Vectren has embarked on a major
project to construct storage, conveyor and loading equipment
to transport y ash from our generating stations by river
barges to Geocycle US’s facility in Missouri.
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