updated: 10/13/2010 12:41:05 PM

Utilities Estimate Lower Heating Bills

InsideINdianaBusiness.com Report

Evansville-based Vectren Corp. (NYSE: VVC) and Indianapolis-based Citizens Energy Group are predicting lower gas bills this heating season. Vectren says customers can expect to see a 5 percent difference, while Citizen is estimating a 7 percent decline, compared to last year.

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October 13, 2010

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Evansville, Ind. – Natural gas prices that continue to remain stable and relatively low will again help ease upcoming winter bills for Vectren Energy Delivery of Indiana - North (Vectren) customers. Today, the utility announced that assuming normal winter weather, customers could see bills that are up to 5 percent lower than the previous heating season, which saw bills decrease as much as 30 percent from the 2008-2009 winter. Abundant gas supply in the U.S. has resulted in natural gas costs, which are passed through to customers on a dollar-for-dollar basis, remaining at levels not seen since 2001.

“Just two summers ago, we were seeing gas priced at $1.00 to $1.20 per therm, and now, prices are in the 45 to 50-cent range,” said Vectren President and CEO Carl Chapman. “Given gas costs represent as much as 70 percent of winter bills, these lower prices are helping keep bill amounts down, which I’m certain is welcomed news for our customers.”

Last year, a typical residential customer would have paid roughly $560 for November through March natural gas service based on normal weather. This year, based upon expected natural gas commodity costs, that same customer could expect to pay around $530 to $560 based on the average household consumption of approximately 630 therms. Bills will vary by customer depending on the size and age of the home, number of gas appliances, number in the household, thermostat settings and levels of insulation.

“Even though bills are forecasted to be lower, it doesn’t mean customers should lose sight of implementing energy efficiency measures and finding ways to use less natural gas to lower bills even further – using energy wisely is always the best practice regardless of gas costs,” Chapman added. “Investing in high-efficiency appliances, implementing low-cost energy efficiency measures and upgrading insulation are still the right steps to undertake.”

Vectren has in place a number of tools to help customers manage their utility bills.

• Conservation Connection – Offers appliance rebates and new energy-saving tools to help customers to lower their total natural gas bills. All Indiana residential and small commercial natural gas customers are eligible. A conservation call center (866) 240-8476 is also available to help customers focus on conservation. Visit Vectren.com for a list of rebates and qualifying appliances.

• Budget Bill: Under this billing plan, a customer's estimated costs for a year of gas service are spread out in equal monthly bill amounts for the year. This leveling of monthly bill amounts reduces winter gas bills and increases summer gas bills. Typically, amounts are adjusted annually for actual costs and the customer’s credit or amount due rolls into the next calculation. A mid-winter recalculation may occur for some customers if gas costs experience a significant change during the heating season. Customers can enroll for free at http://www.vectren.com or by calling (800) 227-1376.
• Energy efficiency tips: Low-cost home improvement and energy conservation tips are available at Vectren.com or by calling Vectren’s Conservation Connection at (866) 240-8476. Customers can also access how-to videos on home improvement projects such as caulking, weather-stripping or installing a low-flow showerhead at http://www.VectrenLiveSmart.com.

• Energy Assistance Program (EAP): State and federal utility assistance dollars are available for income-eligible customers. Those that fall within 150 percent of federal poverty guidelines should visit their local community action agency to sign up for EAP. All eligible natural gas customers who qualify for EAP will automatically be enrolled in the Universal Service Program (USP), which provides additional gas bill reductions that range from 15 to 32 percent of the total bill (not including EAP benefits) in the months of December through May.

• Share the Warmth: Those wanting to help the less fortunate with their energy bills can contribute to Share the Warmth, a nonprofit organization that assists income-eligible customers with home weatherization services. Each year, Vectren matches all public donations, up to an annual total of $200,000. Donations may be tax-deductible and can be sent to Share the Warmth, P.O. Box 931, Evansville, IN 47706-0931 or visit http://www.sharethewarmthinc.com.

“Even though bills should be lower than in years past, we anticipate many Hoosiers may find themselves, some even for the first time, struggling to pay their bills and in need of financial assistance,” said Chapman. “We urge those customers to reach out to us before they get behind. We have a number of options to help customers manage bills, including free payment arrangements through which qualifying customers can pay their bills in smaller increments over an extended time period.”

Natural gas is a commodity bought and sold in a national deregulated market and prices fluctuate daily due to supply and demand pressures. Vectren purchases natural gas on behalf of its customers and then passes those costs on to customers through the gas cost adjustment, which is listed on the Vectren bill as “Gas Cost Charge.” Vectren is not allowed to mark up nor profit from the purchase and sale of natural gas. Only gas costs approved by the Indiana Utility Regulatory Commission are recovered from customers.

Vectren uses a disciplined purchasing strategy to help reduce the impact of market price volatility on customers. The portfolio purchasing strategy consists of buying gas in the market at different times and from multiple sources. A blend of purchases made for future delivery, summer purchases that have been placed in storage facilitate and spot market purchases support this mitigation process. The company typically enters the heating season with about 75 percent of its gas supply already secured, which will help mitigate the risk of any unexpected price increases during the heating season.

Vectren North delivers natural gas to approximately 567,000 natural gas customers in Adams, Allen, Bartholomew, Blackford, Boone, Clark, Clay, Clinton, Daviess, Decatur, Delaware, Fayette, Floyd, Fountain, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Huntington, Jackson, Jay, Jefferson, Johnson, Lawrence, Madison, Marion, Martin, Miami, Monroe, Montgomery, Morgan, Orange, Owen, Parke, Putnam, Randolph, Rush, Shelby, Tippecanoe, Tipton, Vermillion, Vigo, Wabash, Warren, Wayne, Wells and White 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 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

Source: Vectren Corp.

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INDIANAPOLIS – Citizens Energy Group advised today that the typical bill of Citizens Gas residential customers in Marion County will decline about seven percent over the November through March heating season, assuming normal temperatures.
Citizens Gas projects the typical residential customer in Marion County will use 631 therms of natural gas from November through March for a total bill of about $580. This compares to about $620 the typical customer would have spent last year for 631 therms.
Citizens Gas expects gas bills to be lower this winter because of lower natural gas costs. Natural gas prices are not set by local utilities like Citizens Gas, but rather by the forces of supply and demand. In accordance with state law, Citizens Gas customers pay exactly what the utility pays for the natural gas delivered to them. Natural gas costs account for about three-fourths of a residential customer’s bill with the remaining fourth being delivery and service costs.

“This year’s decline in natural gas prices and the associated decline in gas bills continue to be great news for all of our Marion County customers. However, we remain sensitive to the large number of our customers who will need assistance this winter given the challenges the economy still faces. Citizens will continue to work with community partners to maximize energy assistance sources for customers in need,” said Carey Lykins, President & CEO of Citizens Energy Group.

Steps Citizens is taking to help customers manage their energy costs include:

• Energy Assistance – Citizens expects to fund more than $1.2 million in energy assistance for low-income customers this winter. The utility also is working with elected officials and regulators to find additional financial assistance for customers while keeping payment programs and policies as flexible as possible.
• Budget Billing – This year, the utility will again open the Budget Plan to all customers who are current on their bill with a satisfactory payment record. The Budget Plan spreads out the cost of winter heating into 12 equal monthly payments. Customers can enroll by paying the budget amount on their bill or by calling 924-3311.
• Citizens Energy Savers -- Customers can find a variety of energy-saving tools at www.CitizensEnergySavers.com, including the Citizens Home Energy Advisor, a free online energy audit tool.

Also, Citizens will again be conducting a public information campaign to educate customers about home heating safety, energy assistance and energy conservation. Citizens urges all customers to have working smoke and carbon monoxide alarms in their homes. The company will again be distributing free smoke alarms and information on home heating safety through a partnership with the Indianapolis Fire Department and the Interdenominational Ministerial Alliance. Energy conservation will be promoted through various mediums including the company website, www.citizensgas.com. Simple, low-cost measures customers can utilize to reduce their gas bill include:

• Replace your furnace filter – Changing your furnace filter once a month helps your furnace work more efficiently.
• Dial down your thermostat -- A 10 degree reduction for an 8-hour period each day will reduce your heating bill 10 percent.
• Dial down the water heater -- For each 10-degree reduction in water temperature, you can save up to 5 percent in energy costs.

Marion County residents in need of energy assistance should call Community Action of Greater Indianapolis at 524-6966. People outside Marion County should call their local Community Action agency. Statewide customers can call Connect to Help at 211 for a variety of household assistance programs. Customers are urged to contact the utility, at 924-3311, if they are getting behind on their gas bills.

Citizens Gas (Marion County) Projected Total Winter Gas Bill with Normal Weather
*These estimates may change significantly due to changes in weather and wholesale gas prices.

Total Therms Total bill
Nov. 2010-March 2011 631 $ 579.36
Nov. 2009-March 2010 631 $ 620.08
Dollar Decrease $ (40.72)
Percentage Decrease (6.57%)
Monthly Projections Assuming Normal Weather
Therms Average bill
November 2010 84 $ 78.06
November 2009 84 $ 88.72
Dollar Decrease $ (10.66)
Therms Average bill
December 2010 145 $ 130.66
December 2009 145 $ 136.02
Dollar Decrease $ (5.36)
Therms Average bill
January 2011 167 $ 149.52
January 2010 167 $ 160.84
Dollar Decrease $ (11.32)
Therms Average bill
February 2011 134 $ 123.76
February 2010 134 $ 131.02
Dollar Decrease $ (7.26)
Therms Average bill
March 2011 101 $ 97.36
March 2010 101 $ 103.48
Dollar Decrease $ (6.12)
(More)


About Citizens Energy Group
Citizens Energy Group is a Public Charitable Trust providing safe and reliable utility services to more than 266,000 customers in and around Marion County. The Public Charitable Trust means the utility is managed only for the benefit of customers and the community. Additional information is available online at www.CitizensEnergyGroup.com - Facebook - Twitter - YouTube

Source: Citizens Energy Group

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