EXHIBIT 99-1
Vectren Corporation
P.O. Box 209
Evansville, IN 47702-0209
June 6, 2003
FOR IMMEDIATE RELEASE
Vectren subsidiary reaches agreement with Department of Justice, EPA
Evansville, Indiana - Southern Indiana Gas and Electric Company (SIGECO), a
wholly-owned subsidiary of Vectren Corporation (NYSE: VVC), the U.S. Department
of Justice (DOJ), and the U.S. Environmental Protection Agency (EPA) announced a
proposed agreement that would lead to further improvements in air quality and
resolve the government's pending Clean Air Act claims against SIGECO. This
agreement was embodied in a consent decree lodged today in U.S. District Court
in Indiana. SIGECO anticipates that the Court will enter the consent decree
after the mandatory public comment period.
The proposed agreement would resolve a lawsuit filed by the EPA and DOJ in
November of 1999 alleging violations of the new source review provisions of the
Clean Air Act at SIGECO's Culley Generating Station in Yankeetown, Ind. Under
the terms of the proposed agreement, DOJ and EPA have agreed to drop all
challenges of past maintenance and repair activities at the Culley coal-fired
units. In reaching the proposed agreement, SIGECO did not admit to any
allegations alleged in the government's complaint and SIGECO continues to
believe that it acted in accordance with applicable regulations and conducted
only routine maintenance on the units. SIGECO has entered into this proposed
agreement to further its continued commitment to improve air quality and avoid
the cost and uncertainties of litigation. During the course of the litigation,
the government dropped 23 of the original 27 claims. This proposed agreement
would resolve the remaining four claims.
"Our generation facilities operate under strict environmental rules and
regulations," said Vectren Chairman, President and CEO Niel C. Ellerbrook. "This
proposed resolution will enable us to focus upon further investment in
environmental improvements at our electric generation operations rather than
protracted litigation."
Under the proposed agreement, SIGECO has committed to:
o either repower Culley Unit 1 (50 MW) with natural gas, which would
significantly reduce air emissions from this unit, and equip it with
selective catalytic reduction control technology for further reduction
of nitrogen oxides, or cease operation of the unit by December of
2006;
o operate the existing selective catalytic reduction control technology
recently installed on Culley Unit 3 (287 MW) year round at a lower
emission rate than that currently required under the NOx SIP Call,
resulting in further nitrogen oxide reductions;
o enhance the efficiency of the existing scrubber at Culley Units 2 and
3 for additional removal of sulphur dioxide emissions;
o install a baghouse for further particulate matter reductions at Culley
Unit 3 by June of 2007;
o conduct a Sulphuric Acid Reduction Demonstration Project as an
environmental mitigation project designed to demonstrate an advance in
pollution control technology for the reduction of sulfate emissions;
and
o pay a $600,000 civil penalty.
Vectren anticipates that the proposed settlement would result in total capital
expenditures through 2007 in a range of between $16 Million and $28 Million. The
lower level of capital expenditures would occur if SIGECO elects to not repower
Culley Unit 1. Other than the $600,000 civil penalty, SIGECO expects that these
capital expenditures and related operation expenses are properly recoverable
through rates. SIGECO believes that the expenditures for pollution control
equipment provided under this proposed agreement would enable SIGECO to
effectively and affordably meet future environmental requirements at the Culley
units. Further, the expenditures would position the Culley units for continued
operation under ever more stringent pollution control requirements that SIGECO
expects in the next few years, and enhance the units' continued ability to burn
regional and cost-effective high sulphur coal.
Safe Harbor for Forward Looking Statements
This document includes certain information which is "forward looking
information" as defined by the Private Securities Litigation Reform Act of 1995.
Examples include discussions as to our expectations, beliefs, plans, goals,
objectives and future financial or other performance or assumptions concerning
matters discussed in this document. This information, by its nature, involves
estimates, projections, forecasts and uncertainties that could cause actual
results or outcomes to differ substantially from those expressed. The business
is influenced by many factors that are difficult to predict, involve
uncertainties that may materially affect actual results and are often beyond the
ability to control. Vectren has identified a number of these factors in our
filings with the SEC, including its most recent Form 10-K filed with the
Securities and Exchange Commission on March 17, 2003.
Vectren Corporation is an energy and applied technology holding company
headquartered in Evansville, Indiana. Vectren's energy delivery subsidiaries
provide gas and/or electricity to more than one million customers in adjoining
service territories that cover nearly two-thirds of Indiana and west central
Ohio. Vectren's non-regulated subsidiaries and affiliates currently offer
energy-related products and services to customers throughout the surrounding
region. These include energy marketing; coal mining; utility infrastructure
services; and broadband communication services. To learn more about Vectren,
visit www.vectren.com.
CONTACTS: Steve Schein, Vice President -Investor Relations, 812-491-4209,
sschein@vectren.com
Mike Roeder, Director - Director - Corporate Communications,
812-491-4143, mroeder@vectren.com