Vectren 2009 Annual Report Download - page 9

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Vectren 2009 7
Vectren’s Outlook
Going forward, it’s evident that energy prices will
continue to be a challenge for the Midwest and the
nation given the need for infrastructure upgrades, new
electric transmission and clean generation, as well as
the potential for a climate change bill that will lead
toward a carbon-constrained world. While we’re
optimistic a new domestic source of natural gas – shale
gas – can help keep prices at moderate levels, we still
believe that the absence of a full-edged national
energy policy may lead to natural gas, as a result of its
lesser carbon output, being the only short-term solution
to meet demand, especially when it comes to electric
generation. This outcome will put increased pressure on
natural gas and likely force energy prices to rise.
At the same time, we feel condent that these very
challenges can become opportunities for Vectren and
our subsidiaries. On the utility side, decoupled rates
allow us to strongly encourage energy efciency as
the most effective way to reduce energy costs. This
concentrated focus on nding ways to reduce energy
consumption will further positively impact our nonutility
companies ProLiance, Source and ESG, all of which
offer comprehensive programs to manage energy costs.
And we’re condent both Miller and ESG will benet
from continued stimulus program support. Clearly, all
of these activities support our philosophy of developing
a strong utility core with supportive nonutility products
and services.
Last December marked the 50th consecutive year that
Vectren and its predecessors have increased the annual
dividends paid. For many utility shareholders, reliable
dividends provide a much needed source of income.
Regrettably, the current 15 percent dividend tax rate is
set to expire at the end of 2010. Therefore, we encourage
you to visit http://www.defendmydividend.org to let your
members of Congress know how important extending the
current dividend tax rate is to you.
Before we close, we need to give recognition to John
Dunn and Rick Rechter as both will retire from the
Vectren Board of Directors at this year’s annual meeting.
Their profound vision, proven business leadership and
sound guidance have been instrumental to Vectren’s
success, and we extend a sincere thank you for their
invaluable service and best wishes in retirement.
More than 10 years ago, two quality Indiana utilities
committed to form a more diverse energy company,
and on March 31, 2010, we will celebrate a decade of
Vectren. Now, we can look back and say the foundation
that was laid then has put us in a position to continue
providing safe and reliable energy service to more
than one million utility customers and to expand our
Midwest nonutility footprint to include the Southeast and
East Coast. Moreover, our ability to adapt readily in
the ever-changing energy industry and our Live Smart
approach to partnering with customers to use energy
wisely will help us become stronger during the recession
recovery and continue to be one of the Midwest’s
leading energy companies.
Niel C. Ellerbrook
Chairman & CEO
Vectren Corporation
Carl L. Chapman
President & COO
Vectren Corporation
February 26, 2010