EX-99.2 3 exhibit992-gasmodernizatio.htm EXHIBIT 99.2 Exhibit 99.2 - Gas Modernization South


EXHIBIT 99.2




News
Release
Vectren Corporation
One Vectren Square
Evansville, IN 47708


FOR IMMEDIATE RELEASE
Nov. 26, 2013
Media contact: Chase Kelley, (812) 491-4128 or kckelley@vectren.com

Vectren files plan to spend $215M on infrastructure improvements in Indiana-South natural gas system through 2020

Evansville, Ind. - This week, Vectren Energy Delivery of Indiana - South (Vectren) - in a filing made with the Indiana Utility Regulatory Commission (IURC) - outlined the robust gas infrastructure improvement strategy the company will undertake over the next seven years to comply with federal pipeline safety rules and to ensure the company’s 110,000 gas customers in southwestern Indiana continue to receive safe, reliable gas service for decades to come.

The gas system improvements will result in upgrading portions of Vectren’s 3,200-mile network of distribution mains and transmission pipelines that serve nine counties in southwestern Indiana. The work will primarily consist of replacing 300 miles of bare steel and cast iron distribution mains with new mains, most of which will be plastic, as well as inspecting and upgrading Vectren’s transmission pipelines. These plans include acceleration of its pipeline replacement program and bolstering its transmission line integrity management work. Together, these efforts will call for an estimated $215 million in investments.

“Each year, we consistently invest in our gas infrastructure to ensure we maintain a safe, reliable system,” said Carl Chapman, Vectren’s chairman, president and CEO. “Over the next decade, this labor-intensive work will increase as federal regulations raise safety standards even higher ensuring the Hoosier state’s gas industry continues its excellent safety track record.”

The filed plan, along with other expected capital expenditures, will have significant benefits for the economy according to a study conducted by the Indiana Business Research Center at Indiana University’s Kelley School of Business, including:
generating about $1.5 million annually in increased state and local government revenue effects through 2020;
supporting approximately 475 jobs annually; and
resulting in an economic ripple effect that will lead to an additional $25 million in spending annually over the seven-year period, including a statewide impact outside Vectren’s service territory.

Vectren filed this seven-year gas system modernization plan with the IURC, which seeks to recover $215 million of the planned capital expenditures through 2020. Under Senate Enrolled Act 560 and Senate Enrolled Act 251, which focuses on federally-mandated infrastructure needs, Indiana utilities are encouraged to submit their forward-looking capital investment plans to the IURC for review and cost recovery as provided for by this legislation. The IURC will have review, oversight and approval authority in this process.

For an overview of the seven-year gas system modernization plan outlining the infrastructure upgrades, visit www.vectren.com/safety.

If the plan is approved as filed, gas bills will not be adjusted for these expenditures until 2015 - a year following the plan’s expected approval - and those adjustments will continue with modest increases in subsequent years as the improvement





projects are completed. In year one, 2015, the typical residential natural gas customer would see an average increase of about $1 to $1.50 per month. In 2013, the average residential customer will pay a total of $570 for gas service. Even with the expected bill impacts for these gas infrastructure investments, due to considerably lower natural gas commodity costs, bills should remain substantially lower than they were during the late 2000s. For example, in 2008, the average annual residential gas bill was $985. See chart.


The filing has no impact on electric rates.

“While these infrastructure enhancements are vital to meeting federal requirements and ensuring the safety of our system, affordability of our gas service remains top of mind,” added Chapman. “Natural gas bills sit at decade-lows thanks to low, stable natural gas prices. Furthermore, Vectren South has among the lowest gas rates in the state. Of the 20 gas companies in Indiana, Vectren South is in position #18, meaning only two companies offer lower rates. As these investments continue, we will always strive for a safe and reliable system with a focus on customers’ bills.”

So far, Vectren has conducted pipeline replacement work in six of the nine cities that have bare steel and cast iron mains in the company’s southwestern Indiana service territory. These include Evansville, Francisco, Loogootee, Montgomery, Oakland City, Petersburg, Princeton, Vincennes and Washington. Since 2008, more than 45 miles of gas mains have been replaced, which has led to a 12 percent reduction in leak calls and a reduction in natural gas emissions from our distribution system.

In addition to pipeline testing, maintenance and replacement, other portions of the infrastructure investments will go toward needed system upgrades, such as replacing vintage plastic main installed in the 1960s with today’s more durable standard of plastic and removing gas lines that are attached beneath bridge crossings and relocating those lines to underground locations.

Vectren Energy Delivery of Indiana - South delivers natural gas to approximately 110,000 natural gas customers in Daviess, Gibson, Knox, Martin, Pike, Posey, Spencer, Vanderburgh and Warrick counties.


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 1 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 U.S. These include infrastructure services, energy services and coal mining. To learn more about Vectren, visit www.vectren.com.

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