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Natural gas audit case results in $9.6 million refund to Vectren customers

COLUMBUS, Ohio - June 14, 2005 - In a consumer victory, state regulators today decided that customers of Vectren deserve $9.6 million plus interest in credits due to issues surrounding the company's natural gas purchasing practices. The Office of the Ohio Consumers' Counsel (OCC) represented the interests of Vectren's residential customers in the case, which was based on a management performance audit covering November 2000 through October 2002. While the total result includes credits to business and industrial customers, residential customers will see a substantial share of the $9.6 million.

"We vigorously advocated on behalf of Vectren's residential customers, who deserve to have this money returned to them. We are pleased that the Public Utilities Commission of Ohio agreed," said Janine Migden-Ostrander, Consumers' Counsel. "An independent audit and the OCC's analysis showed that Vectren failed to act in its customers' best interests. We argued for the money to be returned to customers and, based on the decision, residential customers will see the benefits."

The OCC's analysis and advocacy efforts supported the audit recommendations and showed that an additional $4.5 million was due to customers beyond what was found in the audit. Today's PUCO decision was split, with Commissioners Don Mason, Clarence Rodgers and Judy Jones voting in favor of the refund. Dissenting in part of the decision were Chairman Alan Schriber and Commissioner Ronda Hartman Fergus.

The credits will be factored into Vectren's regulated rate, which changes each month based on the projected price of natural gas and adjustments from previous months. These rates will soon begin to include credits based on the audit case. Customers who have chosen a competitive supplier do not purchase gas from Vectren's regulated business and will not see adjustments based on the decision.

Interest payments at an annual rate of 10 percent will also be added based on the time from when each error occurred until May 1, 2004.

Several of the problems found in the audit related to ProLiance, an asset management company in which Vectren owns a majority stake. When Vectren purchased Dayton Power & Light's (DP&L) natural gas business, its affiliate ProLiance was given an unbid contract to handle gas pipeline and storage transactions.

About the Office of the Ohio Consumers' Counsel

The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals. To receive utility information, brochures, schedule a presentation or file a utility complaint, residential consumers may call 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC website at www.pickocc.org.