Vectren Utility 8K Regulation FD Disclosure | SEC 1 Feb 07

Hosted by:

Niel Ellerbrook – Chairman, President and CEO

Jerry Benkert – EVP and CFO

Carl Chapman – EVP and COO

Ron Christian –EVP, General Counsel and CAO

Fiscal Year 2006

February 1, 2007 – 11:00 am ET

Forward-Looking Statements

Statements contained or incorporated by reference in these slides regarding

future events and developments are “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933. Forward-looking
statements are based on management’s beliefs and assumptions that derive from
information currently known by management. Because such statements are
based on expectations and not historical facts, actual results may differ materially
from those projected in the particular statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as
of the date of this document, or in the case of documents incorporated by
reference, as of the date of those documents.

Additional detailed information concerning a number of factors that could cause

actual results to differ materially from the information that is provided to you here
is readily available in our annual report on Form 10-K filed with the Securities and
Exchange Commission on February 16, 2006.

Contact:

Vectren Corporation

Steven M. Schein

VP – Investor Relations

812-491-4209

sschein@vectren.com

Utility earnings decreased $3.7 million primarily from lower wholesale power margins,

increased depreciation and interest costs and declines in customer usage

Nonutility operating businesses earnings decreased $13.1 million, primarily from lower

ProLiance earnings due to the Huntsville settlement and 2005 record earnings due to
Gulf Coast hurricanes and lower earnings from Haddington Energy Partners, which
sold an investment in 2005

Corporate & Other reflect funding of Foundation in 2005 from sale of nonutility

investment proceeds

2006 Synfuels impacted by oil prices and production levels

Net Income

Utility Positioned For Growth

NTA in place in Indiana, normal weather in Ohio

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2006 earnings impacted ($0.06) due to weather - without NTA ~ ($0.16)

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2007 assumes normal heating and cooling weather

Indiana and Ohio Conservation/Decoupling orders in place in 2006

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2006 revenues ~ $2.0 million

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2007 incremental revenues over 2006 ~ $9-$11 million

South gas & electric rate orders ~ 3^rd Qtr

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2007 incremental revenues over 2006 from rate cases - $10-$15 million

Managed O&M growth

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2006 growth managed below 1%

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2007 target growth below 3% with most increases recovered through trackers

Pursue rate relief as necessary to achieve allowed returns at each utility

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Indiana North and Ohio filings contemplated in 2007

Disciplined growth through reinvestment of earnings

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Acquisition of Miller Pipeline in July 2006

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Expansion of Liberty Gas Storage - 6 Bcf in 2007

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Acquired 80 million tons of coal reserves

Continued to narrow focus of nonutility businesses

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Sold broadband investment in 2006

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Exited meter reading and line locating businesses

Successful Nonutility Businesses

Future Presents Opportunity

Low risk utility platform with growing electric and gas rate base

Constructive and progressive regulatory and legislative environment

Successful nonutility businesses closely linked to core utility operations

Strong financial profile; S&P: A-Moody’s: Baa1

Superior record of dividend growth

Strong financial position and future earnings visibility

2007 and 2008 Success Factors

Utility earnings growth at 3.5% to 4%

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Rate base growth @ 5+%

•

~ $1.5 billion capital investment planned over next 5 years

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Timely and equitable regulatory treatment

•

2007 incremental revenue from lost margin recovery over 2006 between $9-$11 million

•

South gas & electric rate relief – 3^rd Qtr ($10-15 million incremental revenue) with remainder

in 2008

•

Obtain regulatory relief in other jurisdictions - Indiana North and Ohio effective in 2008

Nonutility earnings growth at 10+%

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Optimize use of storage and midstream assets

•

Additional 6 Bcf at Liberty Storage operational 3rd Qtr 2007

•

Contracted additional 4 Bcf storage for 2007-08 heating season

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90% of coal is pre-sold in 2007 @ 4-5% average price increase

•

New mines will provide 5 million tons of coal annually beginning 2009-10

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Miller Pipeline 100% owned – exited meter reading and line locating

•

Focus on replacement of aging gas infrastructure

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ESG growth through energy conservation programs and recurring revenues

•

2006 ending backlog at $68 million (2005 at $42 million)

Continue history of dividend increases - 47 consecutive years

Increase Vectren EPS at average annual rate of 5+%

Appendix

2007 Utility Outlook

Grow leased or owned storage capacity

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Added 2 Bcf of seasonal storage for winter of ’06-’07

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Will add 6 Bcf high deliverability storage plus another 4 Bcf of seasonal storage for the winter

of ’07-’08

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Hedged storage spreads for winter of ’06-’07 exceed expectations

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20% of seasonal summer/winter spreads ’07-’08 are currently hedged

Invest in gas midstream assets

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Heartland Gas Pipeline started service in late ’06

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Liberty Gas Storage Phase I to be completed in the 3rd quarter of ’07

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Liberty expansion in planning stage and expected to be filed with FERC in ’07

Grow ProLiance gas marketing business

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Number one ranking in ’06 Mastiogale annual customer satisfaction survey

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~95% customer retention in ’06

ProLiance Energy

Grow revenue

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90+% of coal is pre-sold for ’07

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4 to 5% average price increase in ’07 locked in

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Mine an additional 200,000 tons in ’07

Manage costs

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40+% of diesel fuel planned for ’07 is hedged below average ’06 costs

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Full year of more efficient high wall mining at Cypress Creek in ’07

Develop new mines

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Expect permit approvals to build out Oaktown Fuels Mines #1 and #2 in ’07

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Planning to break ground for new mines in late ’07

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Expect new production to start in ’09, reaching 5 million tons per year by 2011

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With Prosperity Mine continuing and Cypress Creek depleted, total annual production will reach

8 million tons

Mining Operations

Grow performance contracting (construction) business

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Record sales year in ’06 will lead to record year-end backlog of $65+ million

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New offices adding business in the Mid-Atlantic and South

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Continued focus on energy conservation in the public sector will continue

Grow operations business

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Added new operating agreement with Baltimore Public Schools in ’06

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Negotiating for two new large operating agreements to become effective in ’07

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Use operating agreements to facilitate repeat performance contracting business

Grow renewable energy business

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Completed landfill gas project in Johnson City, TN in late ’06

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Right to develop sizable landfill gas project in the southeast for ’08 production

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Acting as project manager for waste to energy project in St. Lucie County, FL

Energy Systems Group

Grow through acquisition

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Completed purchase of remaining 50% of Miller from Duke Energy in ’06

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Made two small Midwestern acquisitions in ’06

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Look for additional small complementary acquisitions

Grow through existing customer penetration and territory expansion

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Entered new market segments for two large East Coast customers

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Adding distribution maintenance crews in the East and South

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Continued focus on transmission construction

Positioned to grow through aging infrastructure replacement

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Bare steel and cast iron replacement programs

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Mandated pipeline and likely distribution integrity programs

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EPA mandated upgrades in storm and waste-water sewer systems

Miller Pipeline

Synfuels

Manage oil price risk

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’07 is the last year for the synfuel tax credit

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Hedged 100% of planned ’07 production using call spreads

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“Mark to market” accounting on spreads could impact timing of earnings

recognition

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Variability of earnings predicated upon price paid per tax credit which is

impacted by the phase out range, inflation factor, and actual production
volumes

Vectren Utility Inactive 8-KRegulation FD Disclosure