Indiana Court Upholds IURC/ProLiance

Vectren Corp. announced that the Indiana Supreme Court has overturned an appeals court verdict and affirmed the Sept. 12, 1997 order of the Indiana Utility Regulatory Commission (IURC), that the gas supply agreements between utilities Indiana Gas and Citizens Gas and Coke and their joint venture marketing affiliate, ProLiance Energy, are in the public interest.

The IURC's decision stated that the agreements between ProLiance and the utilities were reasonable, and that customers were experiencing significant gas cost savings under them.

"One of the principal reasons for the creation of ProLiance was to obtain gas cost savings for customers that were otherwise unobtainable. Since its inception, ProLiance has saved the customers of Citizens Gas and Indiana Gas over $60 million in gas costs. We are very pleased with the court's decision because it will preserve these benefits for our customers. Having ended the uncertainty created by this legal challenge to ProLiance's formation, it will be better able to grow and pursue further business opportunities," stated Niel C. Ellerbrook, CEO of Vectren, the parent company of Indiana Gas.

ProLiance Energy, an alliance between affiliates of Citizens Gas & Coke Utility and Indiana Gas Company, was formed as a gas marketer to residential, commercial and industrial customers in 1996. Despite protests from industrial customers and a citizens group, the IURC found in 1997 that ProLiance's agreements were in the public interest and in accordance with Indiana regulatory law. The industrials protested ProLiance's control over 37 Bcf of the utilities' working storage capacity and 600,000 Dth/d of their firm transportation capacity. The Citizens Action Coalition claimed the unregulated affiliate was using the same offices and personnel as the regulated utilities. The Coalition and an Indiana appeals court found fault with ProLiance's sale of gas to the utilities at index prices. The appeals court, however, did not address the question of economic value and overall public interest. (see Daily GPI, Oct. 14, 1998)

"Now that the Supreme Court has rendered its decision, we will endeavor to discuss any remaining issues with the Office of Utility Consumer Counselor and other interested parties with the hope of reaching an agreement that can be presented to the IURC for review and approval," said Ellerbrook.

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