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) April 20, 2007

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
1-16739	Vectren Utility Holdings, Inc.	35-2104850
	(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

Vectren Energy Delivery of Indiana - South (Vectren South), a utility subsidiary of Vectren Corporation (NYSE: VVC), has reached a settlement agreement with the Indiana Office of Utility Consumer Counselor (OUCC) and other intervening parties regarding the proposed changes to the base rates for its electric business in southwestern Indiana. The settlement agreement was filed today with the Indiana Utility Regulatory Commission (IURC) and completes a collaborative effort between Vectren South, the OUCC and interveners.

A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Supplemental information concerning the settlement is attached as Exhibit 99.2 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, including Vectren Utility Holdings, Inc., Indiana Gas Company, Inc., and Southern Indiana Gas and Electric Company, 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 99.3.

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 VECTREN UTILITY HOLDINGS, INC.
April 20, 2007
		By: /s/ M. Susan Hardwick
		M. Susan Hardwick Vice President, Controller and Assistant Treasurer

INDEX TO EXHIBITS

The following Exhibits are furnished as part of this Report to the extent described in Item 8.01:

Exhibit Number	Description
99.1	Settlement Reached on Vectren Electric Base Rate Increase
99.2	Supplemental information concerning the settlement
99.3	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          

                         One Vectren Square

                                                         &# 160;                                                                                                     Evansville, IN 47708

April 20, 2007

FOR IMMEDIATE RELEASE

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

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

Settlement reached on Vectren electric base rate increase

Evansville, Ind. - Vectren Corporation’s (NYSE: VVC) utility subsidiary, Vectren Energy Delivery of Indiana - South, has reached a settlement agreement with the Indiana Office of Utility Consumer Counselor (OUCC) and other intervening parties regarding the proposed changes to the base rates and charges for its electric distribution business in southwestern Indiana. The settlement agreement was filed today with the Indiana Utility Regulatory Commission (IURC) and completes a collaborative effort between Vectren South, the OUCC and interveners.

“While we have worked hard to hold electric rates down, these adjustments are necessary to continue the level of service our customers expect and ensure the financial stability of the company. This settlement agreement provides an appropriate return on the half billion dollars invested since our last general rate case in additional infrastructure used to provide safe and reliable service to our customers,” said Niel C. Ellerbrook, Chairman, President and CEO. “We appreciate the collaborative process that has been completed with the OUCC and other interested parties.”

The settlement agreement provides for an approximate $60.8 million electric rate increase to cover the company’s cost of system growth, maintenance and reliability. If approved, the impact of this settlement would increase bills around $17 per month for the typical combination gas and electric residential customer. This increase marks the first time in the past 13 years that the company’s electric base rates have been adjusted.

Major provisions of the settlement include:

·   Increased customer benefit from the sale of wholesale power, when available. Occasionally excess power is available to be sold into the marketplace. Vectren will participate in a sharing arrangement with customers of any profit earned above or below a representative amount included in the case.

·   Timely recovery of certain new transmission investments made and ongoing costs associated with the Midwest Independent Transmission System Operators (MISO), the group in charge of the Midwestern power grid.

·   Operations and Maintenance (O&M) expense increases related to managing the aging workforce, including the development of an apprenticeship program and the creation of defined training programs for power plant employees to ensure proper knowledge transfer, safety, and system stability.

·   Recovery of and return on the investment in demand side management programs to help encourage conservation during peak load periods.

·   Increased O&M expense necessary to maintain and improve customer reliability, including enhanced tree-trimming, pole inspections and replacement, and circuit and substation inspections.

·   An overall rate of return of 7.32 percent, and a return on equity (ROE) of 10.4 percent.

Although electric base rates that cover costs to run the business have not changed for more than 13 years, electric bills have grown as a result of higher usage and environmental investment recovery. Average electricity usage by residential customers has increased 15 percent since 1995 as customers have added appliances, computers and other electrical devices. Fuel costs, including the price of coal and natural gas, have also gone up during this time period.

Vectren South’s electric utility generates power primarily with its coal-fired units and then supplements that generation with natural gas-fired peaking units to serve more than 140,000 electric customers in a seven-county area including Dubois, Gibson, Pike, Posey, Spencer, Vanderburgh and Warrick. The company maintains dozens of substations, approximately 830 miles of transmission lines, and 3,225 miles of above-ground and 1,700 miles of underground distribution lines.

About Vectren

Vectren Corporation (NYSE: VVC) is an energy holding company headquartered in Evansville, Ind. Vectren's energy delivery subsidiaries provide gas and/or electricity to more than 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.

EX-99.2

Exhibit 99.2

Vectren South Electric - Rate Case Settlement

·   Overall Revenue Increase - $60.8 Million ($67.3 Million less $6.5 Million Municipal Contract credits through Reliability Cost Recovery Adjustment (RCRA) in the first year)

·   Authorized ROE - 10.40%

·   Overall Rate of Return - 7.32%

·   Capital Structure -

o   47% Equity in Ratemaking Capital Structure

o   55% Equity in Permanent Capital Structure

·   Rate Base - $1,043.7 Million

·   Additional recovery mechanisms approved:

o   MISO Cost Recovery Adjustment (MCRA) - Tracker includes timely recovery of ongoing costs associated with the Midwest Independent Transmission System Operators (MISO). Tracker also includes MISO approved transmission projects that will earn a return equal to FERC rates. Return on Vectren Transmission Projects that qualify for Regional Expansion Criteria and Benefit Process (RECB) treatment will be recovered under MISO Schedule 26.

o   RCRA - Track reliability costs, including Municipals sales credit, Wholesale Power Margins sharing, Environmental Emission Allowance Credits, Interruptible Sales Credits, and Purchased Power Non-Fuel Costs.

§   Municipal sales credits - 100% of margins on existing contracts which expire during 2007 and 2008.

§   Wholesale Power Margins - 50/50 symmetrical sharing with customers around $10.5 Million base level.

·   IURC Hearing on the Settlement May 3, 2007

·   Comparison of Settlement to Initial Filed Request:

o   Revenue Increase, net of Municipal credits, of $60.8 million, compared to $76.7 million as originally filed.

o   Authorized ROE of 10.4%, compared to 12.0% as originally filed.

EX-99.3

Exhibit 99.3

Cautionary Statement for Purposes of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995.

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, regulatory or 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 energy infrastructure strategies.

·   Direct or indirect effects on the Company’s business, financial condition, liquidity and results of operations resulting from changes 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, aging workforce issues, 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 legislative 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.