EX 99-2

                               VECTREN CORPORATION
                            AT RISK COMPENSATION PLAN
                      NON-QUALIFIED STOCK OPTION AGREEMENT
                                    (OFFICER)


Name of Grantee:  ____________________________   No. of Shares:________________
Date of Grant:    January 1, 2005                Price per Share:______________


This Non-Qualified Stock Option Agreement (this "Agreement") by and between
VECTREN CORPORATION ("Vectren") and the Grantee named above (the "Grantee")
evidences the grant, by Vectren, of a Non-Qualified Stock Option to the Grantee
on the date stated above (the "Date of Grant") and the Grantee's acceptance of
such option in accordance with the provisions of the Vectren Corporation At Risk
Compensation Plan (the "Plan"). Vectren and the Grantee agree as follows:

     1.   Shares Optioned and Option Prices. The Grantee is hereby granted a
          Non-Qualified Stock Option to purchase the number of shares of Common
          Stock, without par value, of Vectren (the "Shares") stated above at
          the price per Share stated above, subject to the terms and conditions
          of this Agreement and the Plan (the "Option"). The Option is not
          intended to be a tax qualified option (within the meaning of Section
          422 of the Internal Revenue Code of 1986, as amended (the "Code")).

     2.   Exercise Period. The term of the Option is a period of ten (10) years
          from the Date of Grant (the "Option Term"), subject to earlier
          termination as provided below. Except as otherwise provided below, the
          Option becomes exercisable with respect to the first 34 percent of the
          Shares of Common Stock covered by the Option on and after January 1,
          2006 (the "Lift Date"). Thereafter, one-half of the remaining Shares
          of Common Stock covered by the Option will become exercisable on the
          first anniversary of the Lift Date, and the remainder of the Shares of
          Common Stock covered by the Option will become exercisable on the
          second anniversary of the Lift Date. When the Option becomes
          exercisable with respect to any Shares, those Shares may be purchased
          at any time, or from time to time, in whole or in part, until the
          Option Term expires, but in no case may fewer than 50 Shares be
          purchased at any one time, except to purchase a residue of fewer than
          50 Shares. Notwithstanding the above, the Compensation Committee of
          the Vectren Board of Directors (the "Committee") may at any time waive
          the exercise restrictions contained in this paragraph 2.

     3.   Termination, Retirement, Death, Disability or Change in Control.
          Notwithstanding the provisions of paragraph 2 above:

     (a)  In the event of a Grantee's death, Disability or Retirement (as
          defined in the Plan), or in the event of a Change in Control of
          Vectren (as defined in the Plan), Options granted to the Grantee shall
          be considered immediately vested and shall be exercisable at such time
          as specified in Paragraph 2 of this Option Agreement.

     (b)  Subject to Article X of the Plan, in the event the Grantee resigns or
          is terminated from the Company, Options which have not vested by such
          date shall be forfeited, and the Grantee shall have three months from
          such date to exercise vested Options (but not beyond the expiration of
          the term of the Option, if earlier). Notwithstanding the foregoing, if
          the Grantee is terminated from the Company for Cause (as defined in
          Section 10.4 of the Plan), the Grantee shall be required to exercise
          any vested Options immediately, and any vested Options not immediately
          exercised shall lapse.

     (c)  Notwithstanding the foregoing provisions of this paragraph 3, the
          Option shall not in any event be exercisable after the tenth
          anniversary of the Date of Grant.

     4.   Exercise. The Option may be exercised by the Grantee (or, in the case
          of the death of the Grantee, by the person or persons to whom the
          Option was transferred by will or the laws of descent and
          distribution) by delivering or mailing written notice of the exercise
          and full payment of the purchase price to the Secretary of Vectren.
          The written notice shall be signed by each person entitled to exercise
          the Option and shall specify the address and social security number of
          each such person. If any person other than the Grantee purports to be
          entitled to exercise all or any portion of the Option, the written
          notice shall be accompanied by proof, satisfactory to the Secretary of
          Vectren, of that entitlement. The written notice shall be accompanied
          by full payment in immediately available funds or, if consented to by
          the Committee, in Shares (which have been held by him or her for at
          least six (6) months) represented by certificates transferring
          ownership to Vectren and with an aggregate fair market value (as
          determined by the Committee pursuant to the requirements of Section
          422 of the Code) equal to the purchase price on the date the written
          notice is received by the Secretary, or in any combination of cash and
          such Shares; provided, however, that to the extent consented to by the
          Committee, the Option may be exercised by delivering a properly
          executed exercise note together with irrevocable instructions to a
          broker to deliver promptly to the Corporation the total option price
          in cash and, if desired, the amount of any taxes to be withheld from
          his or her compensation as a result of the withholding tax obligation
          of the Corporation or any of the Subsidiaries. The written notice will
          be effective and the Option shall be deemed exercised to the extent
          specified in the notice on the date that the written notice (together
          with the required accompaniments) is received by the Secretary of
          Vectren at its then executive offices during regular business hours.

     5.   Transfer of Shares Upon Exercise. As soon as practicable after receipt
          of an effective written notice of exercise and full payment of the
          purchase price as provided in paragraph 4, the Secretary of Vectren
          shall cause ownership of the appropriate number of Shares to be
          transferred to the person or persons exercising the Option by having a
          certificate or certificates for those Shares registered in the name of
          such person or persons and shall have such certificate delivered to
          the appropriate person; provided, however, that if the Grantee elects
          to have Shares withheld to meet tax withholding requirements with the
          Committee's approval, the number of Shares issued shall be
          appropriately reduced. Notwithstanding the foregoing, if Vectren or a
          Subsidiary requires reimbursement of any tax required by law to be
          withheld with respect to Shares, the Secretary shall not transfer
          ownership of those Shares until the required payment is made.

     6.   Transferability. The rights under this Agreement may not be
          transferred except by will or the laws of descent and distribution,
          except that this Agreement may be transferred by the Grantee to a
          revocable trust, or any other trust qualifying as a "grantor trust"
          under Sections 671-677 of the Internal Revenue Code of 1986, as
          amended, to be held during the lifetime of the Grantee for his or her
          benefit. The rights under this Agreement may be exercised during the
          lifetime of the Grantee only by the Grantee.

     7.   Authorized Leave. Authorized leaves of absence from Vectren or a
          Subsidiary shall not constitute a termination of employment for
          purposes of this Agreement.

     8.   Compliance With Rule 144. The transfer of Shares to the Grantee
          receives upon the exercise of the Option will have been registered
          under the Securities Act of 1933, as amended (the "1933 Act"). If the
          Grantee is an "affiliate" of the Company, as that term is defined in
          Rule 144, promulgated pursuant to the 1933 Act ("Rule 144"), the
          Grantee may not sell the Shares received upon the exercise of the
          Option except in compliance with Rule 144. Certificates representing
          Shares issued to an "affiliate" of the Company may bear a legend
          setting forth such restrictions on the disposition or transfer of the
          Shares as the Company deems appropriate to comply with federal and
          state securities laws.

     9.   No Right to Continued Service. Nothing in this Agreement shall be
          deemed to confer on the Grantee any right to continue in the employ of
          Vectren or the Subsidiaries or to affect any rights of Vectren, a
          Subsidiary, or the shareholders of Vectren to terminate the service of
          the Grantee at any time.

     10.  The Plan. The Option and this Agreement are subject to all the terms,
          provisions and conditions of the Plan, which is incorporated herein by
          reference, and to such regulations as may from time to time be adopted
          by the Committee. A copy of the Plan has been furnished to the Grantee
          with the execution of this Agreement and an additional copy may be
          obtained from Vectren at any time. In the event of any conflict
          between the provisions of the Plan and the provisions of this
          Agreement, the terms, conditions and provisions of the Plan shall
          control, and this Agreement shall be deemed to be modified
          accordingly.

     11.  Other Plans. The Grantee acknowledges that any income derived from the
          sale of the Shares will not affect the Grantee's participation in, or
          benefits under, any other benefit plan maintained by Vectren.

     12.  Notices. All notices by the Grantee or his or her assigns to Vectren
          shall be addressed to Vectren Corporation, P.O. Box 209, 20 N.W.
          Fourth Street, Evansville, Indiana 47702, Attention: Corporate
          Secretary, or such other address as Vectren may, from time to time,
          specify.

     IN WITNESS WHEREOF, Vectren, by its duly authorized officer, and the
Grantee have executed this Agreement as of the 1st day of January, 2005.


                               VECTREN CORPORATION


                               By: ___________________________________________


                               Its: Duly Authorized Signatory on behalf of the
                               Compensation and Benefits Committee


                               -----------------------------------------------
                                                                       , Grantee