EXHIBIT 12




               COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                         (In Thousands, Except Ratios)



                                      Twelve
                                    Months Ended           Year Ended December 31,
                                    September 30,  -----------------------------------------------
                                       2001(1)     2000(1)    1999      1998     1997 (2)    1996
                                   ---------------------------------------------------------------
                                                                          
Net income (3)                        $ 52,961   $ 53,417  $ 76,511  $ 70,367   $ 59,011  $ 78,962
  Income taxes                          28,457     34,924    43,161    39,093     35,072    45,672
  Fixed charges (see below)             70,818     47,995    39,195    38,582     39,795    40,161
  Less:  Preferred stock dividend          963      1,017     1,078     1,095      1,097     1,097
                                   ----------------------------------------------------------------
   Total adjusted earnings           $ 151,273  $ 135,319 $ 157,789 $ 146,947  $ 132,781 $ 163,698
                                   ----------------------------------------------------------------

Total interest expense                $ 68,949   $ 46,072  $ 36,790  $ 36,670   $ 37,509  $ 37,672
Interest component of rents                906        906     1,327       817      1,189     1,392
Preferred stock dividend                   963      1,017     1,078     1,095      1,097     1,097
                                   ----------------------------------------------------------------
   Total fixed charges                $ 70,818   $ 47,995  $ 39,195  $ 38,582   $ 39,795  $ 40,161
                                   ----------------------------------------------------------------

                                           2.1        2.8       4.0       3.8        3.3       4.1
                                   ================================================================


(1)  Merger and integration related costs and restructuring costs incurred for
     the twelve months ended September 30, 2001 and for the year ended December
     31, 2000 totaled $16.7 million and $32.7 million, respectively. These costs
     relate primarily to transaction costs, severance, elimination of duplicate
     facilities, and other merger, integration and restructuring activities.

     As a result of merger integration activities, management has identified
     certain information systems that are expected to be retired in 2001.
     Accordingly, the useful lives of these assets have been shortened to
     reflect this decision. These information system assets are owned by a
     wholly owned subsidiary of Vectren and the fees allocated by the subsidiary
     for the use of these systems by Indiana Gas are reflected in operation and
     maintenance expenses in the accompanying condensed financial statements. As
     a result of the shortened useful lives, additional fees were incurred by
     Indiana Gas. For the twelve months ended September 30, 2001 and for the
     year ended December 31, 2000, these additional fees increased operation and
     maintenance $13.0 million and $11.4 million, respectively.

     In total, merger and integration related costs and restructuring costs
     incurred for the twelve months ended September 30, 2001 and for the year
     ended December 31, 2000 were $29.7 million ($18.4 million after tax) and
     $44.1 million ($31.6 million after tax), respectively. Before merger and
     integration and restructuring charges, the Company's ratio of earnings to
     fixed charges for the twelve months ended September 30, 2001 was 2.4 and
     for the year ended December 31, 2000 was 3.5.

(2)  The Indiana Gas Board of Directors authorized management to undertake the
     actions necessary and appropriate to restructure Indiana Gas' operations
     and recognize a resulting restructuring charge of $39.5 million ($24.5
     million after tax) which included estimated costs related to involuntary
     workforce reductions. The Company's ratio of earnings to fixed charges
     before the 1997 Indiana Gas restructuring costs was 4.0.

(3)  Net income, as defined, is before preferred stock dividend requirement of
     subsidiary and cumulative effect of change in accounting principle.