Vectren 2012 Annual Report Download - page 5

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Helping Vectren Energy Delivery and many other energy companies
throughout the nation to lay the groundwork for reliable energy
delivery systems is our Infrastructure Services group. This group
consists of Miller Pipeline Corporation, which specializes in the
installation of distribution infrastructure, and Minnesota Limited, which
specializes in the installation of transmission pipelines. As discussed
earlier, their financial performance for the year was exceptional, and
revenues in 2012 were $664 million, compared to revenues of $421
million in 2011.
With demonstrated ability to manage unprecedented growth – in
employees, customers and revenues – combined with a long
demand-driven cycle, the positive outlook remains for this business
segment. For utilities, Infrastructure Services is successfully bidding
to complete distribution and transmission pipeline work in multiple
regions of the country. In fact, they added several first-time large
gas utility customers in 2012, which bodes well for 2013 and
beyond. This group is also poised to continue playing an expanded
role in installing the pipeline systems to gather and transport our
nation’s growing shale gas and oil supply. For example, in late 2012,
Minnesota Limited was awarded a contract to begin construction of
an 80-mile pipeline in North Dakota that will ultimately bring gas from
the Bakken shale region to the Chicago marketplace. Finally, in what
is more of a long-term opportunity, there is considerable potential for
growth in water and wastewater infrastructure replacement where
Environmental Protection Agency (EPA) regulations have those
industries modernizing their systems as well.
For our electric utility, our groundwork for reliability was solidified
in 2010 after our decade-long investment in emissions control
equipment for our coal-fired generation units. We are well ahead of
other coal-fired utilities when it comes to meeting EPA air standards
without significant, additional capital investments. These investments
have led to documented improvements in air quality for southwestern
Indiana. It’s important to note these air emissions investments are
already included in rates, and as other utilities begin to retire and/or
upgrade their coal-fired fleets with emissions control equipment, we
are set to be able to readily provide our customers with reliable power
and take advantage of emerging wholesale power options as this
retirement and retrofitting process continues. However, we know that
additional air, water and ash rules may emerge, which may trigger
more investments, but we believe they will be more manageable
expenditures.
Finally, we concluded the year by energizing our 345-kilovolt
transmission line, the first of its size in our electric service territory,
Vectren’s Infrastructure
Services
With several consecutive years of revenue
growth, Vectren’s Infrastructure Services
division has become a key driver of the
nonutility portfolio’s financial performance.
Growth of Vectren’s
Infrastructure Services
$750
$600
$450
$300
$150
$0
Gross Revenue (in millions)
2010 2011 2012
Minnesota Limited, Inc., was acquired
March 31, 2011.
3