8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 18, 2006

VECTREN CORPORATION

(Exact name of registrant as specified in its charter)

Commission File No.	Registrant, State of Incorporation, Address, and Telephone Number	I.R.S Employer Identification No.
1-15467	Vectren Corporation	35-2086905
	(An Indiana Corporation)
	One Vectren Square,
	Evansville, Indiana 47708
	(812) 491-4000

Former name or address, if changed since last report:

N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events

On July 18, 2006, Vectren Corporation announced that it has elected to opt out of its participation in the production of synthetic fuel, in accordance with the partnership agreement in place with Pace Carbon Synfuels, LP (Pace Carbon), a limited partnership that produces and sells coal-based synthetic fuel. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company is hereby furnishing cautionary statements identifying important factors that could cause actual results of the Company and its subsidiaries to differ materially from those projected in forward-looking statements of the Company and its subsidiaries made by, or on behalf of, the Company and its subsidiaries. These cautionary statements are attached as Exhibit 99.2.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	VECTREN CORPORATION
July 19, 2006
		By: /s/ M. Susan Hardwick
		M. Susan Hardwick
		Vice President and Controller

INDEX TO EXHIBITS

Exhibit Number	Description
99.1	Vectren Suspends Synfuel Involvement
99.2	Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995

EX-99.1

Exhibit 99.1

 News

 Release

 Vectren Corporation

 P.O. Box 209

 Evansville, IN  47702-0209

        

FOR IMMEDIATE RELEASE

July 18, 2006

Contact: Media - Mike Roeder, (812) 491-4143 or mroeder@vectren.com

Investor Relations - Steve Schein, (812) 491-4209 or sschein@vectren.com

Vectren Suspends Synfuel Involvement

Reschedules Earnings Release and Conference Call

Evansville, Ind. -- Vectren Corporation (NYSE: VVC) has elected to opt out of its participation in the production of synthetic fuel. This decision is in accordance with the partnership agreement in place with Pace Carbon Synfuels, LP, a limited partnership that operates four projects to produce and sell coal-based synthetic fuel.

The Internal Revenue Code provides for synfuel manufacturers, such as Pace Carbon, to receive a tax credit for every ton of synthetic fuel sold. Under existing law, synfuel tax credits scheduled to expire at the end of 2007 will begin to be phased out if the current year’s annual average price of oil exceeds certain levels. Federal legislation is still possible which may favorably impact the reference price for 2006 and 2007. However, absent the enactment of such legislation, current NYMEX oil prices indicate that a significant phase out in 2006 is likely. As a result of individual elections made by the partners, Pace Carbon will reduce production at its synthetic fuel facilities. Full synthetic fuel production may resume at the election of the partners.

The company’s investment in Pace Carbon at June 30, 2006, totals $2.9 million. Further, the company is obligated to fund the partnership on an installment basis for working capital and as tax credits are earned. Depending on the actual phase out of credits, if any, this funding obligation could total $5.0 to $7.0 million. The existing investment balance along with any funding obligation would be reflected over the life of the investment, terminating at the original sunset of the credits, if the partnership operated as originally designed. The company can elect to resume participation in the partnership and may choose to do so with a significant reduction in oil prices or the enactment of relevant Federal legislation. However, no assurance can be provided that participation will resume or that a write down of the investment balance and the recording of any funding obligation won’t be necessary prior to the year end 2007 expiration date for the tax credits.

The effects of the decision to suspend its participation in Pace Carbon Synfuels will be discussed more fully in the Company’s upcoming earnings release now scheduled for August 3, 2006 and during its Webcast at 9:00 AM (ET) on August 4, 2006. For a more detailed disclosure of the company’s investment in Pace Carbon, please refer to the most recent Vectren Form 10-Q, which is available at www.vectren.com.

About Vectren

Vectren Corporation is an energy holding company headquartered in Evansville, Indiana. Vectren’s energy delivery subsidiaries provide gas and/or electricity to over one million customers in adjoining service territories that cover nearly two-thirds of Indiana and west central Ohio. Vectren’s nonutility subsidiaries and affiliates currently offer energy-related products and services to customers throughout the Midwest and Southeast. These include gas marketing and related services; coal production and sales and energy infrastructure services. To learn more about Vectren, visit www.vectren.com.

Safe Harbor for Forward Looking Statements

This document contains forward-looking statements, which are based on management's beliefs and assumptions that derive from information currently known by management. Vectren wishes to caution readers that actual results could differ materially from those contained in this document. Additional detailed information concerning a number of factors that could cause actual results to differ materially from the information that is provided to you is readily available in our annual report on Form 10-K filed with the Securities and Exchange Commission on Feb. 16, 2006.

EX-99.2

Ex 99.2

Forward-Looking Information

A “safe harbor” for forward-looking statements is provided by the Private Securities Litigation Reform Act of 1995 (Reform Act of 1995). The Reform Act of 1995 was adopted to encourage such forward-looking statements without the threat of litigation, provided those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause the actual results to differ materially from those projected in the statement. Certain matters described in Management’s Discussion and Analysis of Results of Operations and Financial Condition are forward-looking statements. Such statements are based on management’s beliefs, as well as assumptions made by and information currently available to management. When used in this filing, the words “believe”, “anticipate”, “endeavor”, “estimate”, “expect”, “objective”, “projection”, “forecast”, “goal” and similar expressions are intended to identify forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements, factors that could cause the Company’s actual results to differ materially from those contemplated in any forward-looking statements include, among others, the following:

·   Factors affecting utility operations such as unusual weather conditions; catastrophic weather-related damage; unusual maintenance or repairs; unanticipated changes to fossil fuel costs; unanticipated changes to gas supply costs, or availability due to higher demand, shortages, transportation problems or other developments; environmental or pipeline incidents; transmission or distribution incidents; unanticipated changes to electric energy supply costs, or availability due to demand, shortages, transmission problems or other developments; or electric transmission or gas pipeline system constraints.

·   Increased competition in the energy environment including effects of industry restructuring and unbundling.

·   Regulatory factors such as unanticipated changes in rate-setting policies or procedures, recovery of investments and costs made under traditional regulation, and the frequency and timing of rate increases.

·   Financial or regulatory accounting principles or policies imposed by the Financial Accounting Standards Board; the Securities and Exchange Commission; the Federal Energy Regulatory Commission; state public utility commissions; state entities which regulate electric and natural gas transmission and distribution, natural gas gathering and processing, electric power supply; and similar entities with regulatory oversight.

·   Economic conditions including the effects of an economic downturn, inflation rates, commodity prices, and monetary fluctuations.

·   Increased natural gas commodity prices and the potential impact on customer consumption, uncollectible accounts expense, unaccounted for gas, and interest expense.

·   Changing market conditions and a variety of other factors associated with physical energy and financial trading activities including, but not limited to, price, basis, credit, liquidity, volatility, capacity, interest rate, and warranty risks.

·   The performance of projects undertaken by the Company’s nonutility businesses and the success of efforts to invest in and develop new opportunities, including but not limited to, the realization of synfuel income tax credits and the Company’s coal mining, gas marketing, and broadband strategies.

·   Direct or indirect effects on the Company’s business, financial condition or liquidity resulting from achange in credit ratings, changes in interest rates, and/or changes in market perceptions of the utility industry and other energy-related industries.

·   Employee or contractor workforce factors including changes in key executives, collective bargaining agreements with union employees, or work stoppages.

·   Legal and regulatory delays and other obstacles associated with mergers, acquisitions, and investments in joint ventures.

·   Costs and other effects of legal and administrative proceedings, settlements, investigations, claims, and other matters, including, but not limited to, those described in Management’s Discussion and Analysis of Results of Operations and Financial Condition.

·   Changes in Federal, state or local legislature requirements, such as changes in tax laws or rates, environmental laws and regulations.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of changes in actual results, changes in assumptions, or other factors affecting such statements.