Vectren to embark on $650M project, rate increases

Vectren Corp., which supplies natural gas to 570,000 customers in 48 Indiana counties, plans to spend $650 million over seven years to upgrade its network of distribution mains and transmission pipelines.

The Evansville-based utility firm said Tuesday the upgrades are needed to comply with federal pipeline safety rules, and that it had filed its plan with the Indiana Utility Regulatory Commission. The IURC oversight is necessary because Vectren plans to recoup the cost by increasing rates for customers.

In the Indianapolis metropolitan area, Vectren supplies gas to the so-called doughnut counties, while Citizen’s Energy Group supplies Marion County.

The work will primarily consist of replacing 800 miles of bare steel and cast iron distribution mains with new mains, most of which will be plastic, as well as inspecting and upgrading Vectren’s transmission pipelines, Vectren officials said.

If the rate-increase plan is approved as filed, Vectren said, the average residential customer—which currently pays about $750 per year—would see an average increase of $1 per month in 2015.

The increases would continue to be applied in small amounts until 2021, when the average customer would pay about $850 per year, said Chase Kelley, Vectren’s vice president of corporate communications.

CEO Carl Chapman said, “While these infrastructure enhancements are vital to meeting federal requirements and ensuring the safety of our system, affordability of our gas service remains top of mind."

The infrastructure upgrades also will expand gas delivery infrastructure to rural areas, Vectren said.

Pipeline replacement work already is underway in 49 Indiana cities, including Noblesville, Zionsville, Lebanon, Pendleton and Columbus.