SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 4, 2003
VECTREN CORPORATION
(Exact name of registrant as specified in its charter)
Commission File No. Registrant, State of Incorporation, I.R.S Employer
Address, and Telephone Number Identification No.
------------------- ----------------------------------- ------------------
1-15467 Vectren Corporation 35-2086905
(An Indiana Corporation)
20 N.W. Fourth Street,
Evansville, Indiana 47708
(812) 491-4000
1-16739 Vectren Utility Holdings, Inc. 35-2104850
(An Indiana Corporation)
20 N.W. Fourth Street,
Evansville, Indiana 47708
(812) 491-4000
Item 5. Other Events and Regulation FD Disclosure
Incident to the pending sale of common stock by the Company, the following
update is being provided.
1. In early August, 2003, the Company disposed of its interest in two
non-regulated businesses. These actions were in furtherance of the
Company's objective to narrow the scope of its non-regulated businesses.
Proceeds realized from these dispositions will be used to reduce
outstanding debt at the Company's non-regulated business. The consummation
of both transactions was previously included in the Company's 2003
earnings guidance that was provided on July 9, 2003.
The first disposition was closed as of August 1, 2003, when Vectren
Energy Marketing and Services, Inc. (VEMS), a wholly-owned, indirect
subsidiary of the Company, consummated the sale of its investment in
Genscape, Inc., a supplier of real-time power plant output and
transmission information, to GFI Energy Ventures, LLC. The after-tax
gain realized by the Company was approximately $2.6 million.
The second disposition was closed on August 4, 2003, and involved
CIGMA, LLC (CIGMA), a joint venture between Vectren Utility Services,
Inc., an indirect, wholly-owned subsidiary of the Company, and a
subsidiary of Citizens Gas & Coke Utility. In that transaction,
substantially all of CIGMA's assets were sold to McJunkin Corporation.
CIGMA had been engaged in utility materials management for the
Company's utility subsidiaries, Citizens Gas & Coke Utility, and
others. As a result of the transaction, the Company realized a small
after-tax gain, and received a cash dividend from CIGMA of $4 million.
2. The following is an update on two regulatory matters in Ohio. Each of the
discussed matters is currently pending before the Public Utilities
Commission of Ohio (PUCO).
The first matter relates to an application made to the PUCO by Vectren
Energy Delivery of Ohio, Inc. (VEDO), an indirect, wholly-owned
subsidiary of the Company, together with other regulated Ohio gas
utilities, for authority to establish a tariff mechanism to recover
expenses related to uncollectible accounts pursuant to an automatic
adjustment procedure. The application is pending before the PUCO and,
if granted, will enable VEDO to better match revenues with costs
associated with fulfilling its obligation to serve customers who are
unable to pay their bills. Presently, the amount provided for in VEDO's
base rates is not adequate to cover the total expenses relating to
uncollectible accounts. The actual positive impact of the tariff
mechanism will vary with the as-billed price of natural gas and the
number of customers who are unable to pay their bills. While the
Company believes there is a sound basis for the PUCO to grant the
application to recover actual expenses relating to uncollectible
accounts, no assurance can be provided with respect to the ultimate
outcome of this proceeding.
The second matter concerns the requirement in Ohio that gas utilities,
including VEDO, undergo a biannual audit of their gas acquisition
practices in connection with the gas cost recovery (GCR) mechanism. In
the case of VEDO, on or about August 15, 2003, a third-party consulting
firm engaged by the Staff of the PUCO, is scheduled to conclude an
audit report to be filed with the PUCO. The audit report will provide
the results of that firm's review of VEDO's gas acquisition practices
for the biannual period commencing November 1, 2000 (the first day of
operations by VEDO) through October 31, 2002. The audit will provide
the initial opportunity, in the context of a PUCO GCR proceeding, for a
review of the portfolio administration arrangement between VEDO and
ProLiance Energy, LLC (ProLiance), a joint venture between a Company
subsidiary and a subsidiary of Citizens Gas & Coke Utility. Similar
arrangements for the Company's other utility subsidiaries, Indiana Gas
Company, Inc. and Southern Indiana Gas and Electric Company, were
previously reviewed and approved by the Indiana Utility Regulatory
Commission. VEDO's prior gas acquisition practices may be challenged in
the audit report, including VEDO's relationship with ProLiance, and, as
a result, a gas cost disallowance may be recommended. Should such a
challenge be made, then, by the first of September 2003, VEDO would
file its response. If a hearing is necessary, the earliest it could
occur would be mid-September 2003. After that hearing, the PUCO would
consider all of the evidence on the matter and make a determination on
the merits. Throughout this process VEDO could, and likely would,
endeavor to engage in efforts with the participants in the proceeding
to resolve disputed issues outside of administrative litigation. The
Company believes that VEDO's gas acquisition practices that are the
subject of the audit were reasonable. If a challenge is made with
respect to VEDO's gas acquisition practices during the audit period and
that challenge was adopted by the PUCO, the Company believes that it
would not be reasonably likely to have a material effect on the
Company's results or financial condition. However, the Company can
provide no assurance as to the ultimate outcome of this proceeding.
3. Certain selected financial data is attached as exhibit 99-1 and contains
income statement and cash flow statement data for the six months ended
June 30, 2003 and 2002 and balance sheet data as of June 30, 2003.
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company is hereby filing 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.
Item 7. Exhibits
99-1 Selected Financial Data
99-2 Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the
Private Securities Litigation Reform Act of 995
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.
August 4, 2003
By: /s/ Robert L. Goocher
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Robert L. Goocher
Vice President and Treasurer