SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported) March
15, 2007
VECTREN
CORPORATION
(Exact
name of registrant as specified in its charter)
|
Commission
File
No.
|
Registrant,
State of Incorporation,
Address,
and Telephone Number
|
I.R.S
Employer
Identification
No.
|
|
1-15467
|
Vectren
Corporation
|
35-2086905
|
|
(An
Indiana Corporation)
|
||
|
One
Vectren Square
|
||
|
Evansville,
Indiana 47708
|
||
|
(812)
491-4000
|
||
|
1-16739
|
Vectren
Utility Holdings, Inc.
|
35-2104850
|
|
(An
Indiana Corporation)
|
||
|
One
Vectren Square
|
||
|
Evansville,
Indiana 47708
|
||
|
(812)
491-4000
|
||
Former
name or address, if changed since last report: N/A
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Item
7.01. Regulation FD Disclosure
Vectren
Energy Delivery of Indiana - South (Vectren South), a utility subsidiary of
Vectren Corporation (NYSE: VVC), has reached a settlement agreement with the
Indiana Office of Utility Consumer Counselor (OUCC) and other intervening
parties regarding the proposed changes to the base rates for its gas
distribution business in southwestern Indiana. The settlement agreement was
filed today with the Indiana Utility Regulatory Commission (IURC) and completes
a collaborative effort between Vectren South, the OUCC and
interveners.
Vectren
South filed a petition with the IURC on Sept. 1, 2006 requesting a $10.4 million
increase in its base gas rates. The OUCC filed its case in response recommending
a $5.1 million revenue increase. The parties worked diligently to arrive at
a
settlement, resolving all issues in the case. The settlement agreement includes
a $5.3 million base rate increase but allows for the recovery of certain costs
through existing cost recovery mechanisms instead of through base rates. The
settlement also provides for an allowed return on equity (ROE) of 10.15%, with
an overall rate of return of 7.20% on rate base of $121.7 million.
As
a
comparison of the filed position of the company in the case to the settlement
outcome, summarized here is a reconciliation of the settlement
result:
millions
Settlement
amount of base rate revenue increase $5.3
Costs
removed from base rates to be recovered through existing trackers.
2.6
Effect
of
Settlement on a basis comparable to filed
position
$7.9
If
the
settlement is approved, Vectren South will have in place for its gas
territory:
| o |
weather
normalization,
|
| o |
conservation
and a decoupling tariff,
|
| o |
tracking
of gas cost expense related to bad debts and unaccounted for gas
through
the existing gas cost adjustment mechanism,
and
|
| o |
tracking
of pipeline integrity expense
|
Further,
additional dollars spent on a new, multi-year bare steel and cast iron capital
replacement program will be afforded certain accounting treatment that mitigates
earnings attrition from the investment between rate cases. The accounting
for this investment that was agreed to allows for the continuation of the
accrual for allowance for funds used during construction (AFUDC) and the
deferral of depreciation expense after the projects go in service but before
they are included in base rates. To qualify for this treatment, the annual
expenditures are limited to $3.0 million and the treatment can not extend beyond
three years per project. The deferral of depreciation mitigates the impact
of
attrition and the accrual of AFUDC generally offsets the cost of financing,
while providing the potential for some earnings growth.
The
settlement ROE of 10.15% recognizes these various regulatory
mechanisms.
A
hearing
on the settlement before the IURC will be held March 23, 2007.
In
connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company is hereby furnishing cautionary
statements identifying important factors that could cause actual results of
the
Company and its subsidiaries, including Vectren Utility Holdings, Inc., Indiana
Gas Company, Inc., and Southern Indiana Gas and Electric Company, to differ
materially from those projected in forward-looking statements of the Company
and
its subsidiaries made by, or on behalf of, the Company and its subsidiaries.
These cautionary statements are attached as Exhibit 99.1.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
VECTREN
CORPORATION
VECTREN
UTILITY HOLDINGS, INC.
|
|||
|
March
15, 2007
|
|||
|
By:
/s/ M. Susan Hardwick
|
|||
|
M.
Susan Hardwick
Vice
President, Controller and Assistant
Treasurer
|
|||
|
|
|||
INDEX
TO EXHIBITS
The
following Exhibits are furnished as part of this Report to the extent described
in Item 7.01:
|
Exhibit
Number
|
Description
|
|