Vectren 2011 Annual Report Download - page 8

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Focused on the Future
2011 has proven we’re headed in the right
direction. The initiatives to fulfill our strategies
have been embraced by our employees,
and they’ve been executed, in many cases,
with outstanding results. In other areas, we
know there is still work to do, but clearly,
we’re focused on the task. For ProLiance, a
joint venture that continues to be challenged
by a very low, stable natural gas pricing
market, anything within our control to help
this business regain profitability continues
to be addressed. The management team
has eliminated approximately $25 million of
annualized fixed demand costs, which will be
fully realized this year, and we’re pursuing the
renegotiation of additional pipeline contracts
coming due to provide more relief.
As discussed earlier, we closed 2011 by selling
one of our wholly owned nonutility subsidiaries,
Vectren Source (Source), to Direct Energy,
one of North America’s largest competitive
energy suppliers of electricity, natural gas and
related services. Source provided natural gas
and related services to approximately 280,000
residential and small business customers
in Ohio, New York and northern Indiana. I
am grateful to Source’s 50 employees who
drove the company’s success over the past
decade and helped build a strong brand.
Given our recent emphasis on growing our
infrastructure and energy services businesses
rather than commodities businesses, the
end of the year was the right time for us to
move forward with the sale. The transaction
then allowed us to pre-fund the Vectren
Foundation with a $6 million contribution. Our
Foundation, which contributes annually to
various nonprofits throughout our utility service
territories, continues to be a critical driver in
our community sustainability initiatives.
The outlook for our coal-fired generation
is positive given our fleet is well-positioned
to comply with what was a busy 2011 for
Environmental Protection Agency (EPA)
Focused on the Future
Pursuing emerging technologies
With abundant natural gas supplies, we’re focused on driving
utility growth opportunities related to emerging technologies,
natural gas vehicles and fuel switching to natural gas.
Natural gas prices remain at a 10-year low, making it an attractive
time to transform vehicles to operate on compressed natural gas
(CNG). We are focused on incorporating more CNG vehicles into
the Vectren fleet and aggressively marketing CNG as a viable
option to other large fleet operators.
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