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Natural gas prices remain at 10-year low; winter bills remain on par with last season

Monday, October 17, 2011

Natural gas prices that continue to remain stable and relatively low will again translate to more manageable bills for Vectren Energy customers.

The utility has announced that assuming normal winter weather, customers could see bills that are similar to last year's heating season, which saw bills decrease 30 to 35 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.

"For the past two years, natural gas prices have remained flat with prices stabilizing in the 40 to 45 cents per therm range; where as, three years ago, the market produced prices as high as $1.00 to $1.20," Vectren CEO Carl Chapman said. "Given gas costs represent 60 to 70 percent of winter bills, these lower prices are helping keep bill amounts down. As such, natural gas has continued to be the most cost-effective fuel source for home heating, especially when customers choose high efficiency furnaces."

This year, based upon expected natural gas commodity costs, customers could expect to pay around $570 over the five-month heating season of November through March based on the average household consumption of approximately 660 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 bill amounts are expected to remain lower than years past, 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 energy 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 the need to pay the full amount in the winter and spreads some of those higher bill charges into the non-heating months.

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 significantly change during the heating season.

Customers can enroll for free at http://www.vectren.com or by calling 1-800-227-1376.

Energy efficiency tips: Low-cost home improvement and energy conservation tips are available at Vectren.com or by calling Vectren's Conservation Connection at 1-866-240-8476.

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.

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.

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.

To apply for the EAP, customers should call 1-800-872-0371 to locate their nearest community action agency.

Universal Service Program (USP): All eligible natural gas customers who apply and 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.

Vectren has filed a petition with the Indiana Utility Regulatory Commission to continue the USP through 2016. The USP, which has been in place since 2005 and is set to expire in October 2012, is the result of a collaborative effort by Vectren, Citizens Energy Group, the Indiana Office of Utility Consumer Counselor, Citizens Action Coalition and a group representing industrial customers.

The program provides about $5 million in assistance each year to roughly 30,000 Vectren Indiana customers, including crisis assistance dollars, which target qualified low-income and working-poor households that need additional help to get reconnected and/or maintain heat throughout the upcoming winter.

"Regardless of lower bill amounts, we know many Hoosiers still find themselves struggling to pay their bills and in need of financial assistance," said Chapman. "Programs like Share the Warmth and the Universal Service Program are critical in helping Hoosiers manage costs and stay warm. We encourage customers to contact their local community action agency today and apply for financial and/or home weatherization assistance."

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 utilities are 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.

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