Office of the Ohio Consumers' Counsel

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Contact: Marty Berkowitz
(614) 387-2962

Rate hikes approved for Vectren Energy Delivery of Ohio customers

COLUMBUS, Ohio – January 7, 2009 – The PUCO today approved an agreement reached Sept. 8, 2008 among the Office of the Ohio Consumers’ Counsel (OCC), the PUCO staff, Vectren and other parties which lowered the utility’s proposed $27 million annual revenue increase to $14.8 million.

The PUCO’s decision, which was opposed by the OCC, will allow Vectren to raise its flat-rate customer charge from $7 per month to $13.37 per month with a corresponding decrease in the portion of the distribution rate that consumers pay based on their usage. The customer charge will again increase to $18.37 per month on Nov. 1 and the volumetric (fee-for usage) charge will be eliminated.

The OCC reacted critically to the PUCO’s decision regarding the customer charge. “We continue to oppose loading most of Vectren’s delivery charges into one fixed rate that everyone must pay whether they live in a one-room apartment or a large home,” said Janine Migden-Ostrander, Consumers’ Counsel. “This decision will have a harmful effect on low-income customers struggling to make ends meet during difficult economic times and discourage them from making important conservation efforts.

“Public testimony from consumers, particularly those on fixed incomes, demonstrated that customers generally do not support these substantial fixed-rate increases,” Migden-Ostrander added.

Vectren had originally requested, and the PUCO staff had recommended, a seasonal rate structure with a fixed charge of $16.75 per month during the winter heating season and a lower rate of $10 per month during the summer. However, the PUCO declined to approve this approach and settled on the average between the two figures as the customer charge.

The distribution portion of a customers’ monthly bill, which accounts for approximately 25 percent of it, is what Vectren charges for delivering gas to customers’ homes. This is the portion that the utility charges for maintaining and reading gas meters, billing and record keeping and also may include riders for the replacement of existing pipeline and upgrading of system equipment. The actual cost of natural gas was not part of the rate case.

The PUCO also directed Vectren to provide a one-year pilot program for customers at or below 175 percent of the federal poverty guidelines who are not enrolled in the Percentage of Income Payment Plan (PIPP). This program, available to the first 5,000 customers who enroll, will provide a $4 monthly discount to offset the impact of the higher customer charge.

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 Web site at www.pickocc.org.