The utility had wanted to build the gas-fired plant to replace aging coal-burning units, but regulators said the plan was too risky and inflexible.
The company said the Indiana Utility Regulatory Commission on Tuesday approved the final phase of an agreement with various consumer groups to reflect decreases in rates as a result of the federal tax overhaul last year.
The combined company would serve more than 7 million gas and electricity customers in eight states and hold about $29 billion in assets.
CenterPoint Energy Inc.’s purchase of Vectren would take out Indiana’s 13th-largest public company, with $2.4 billion in annual revenue. Every county surrounding Marion County receives service from Vectren.
The Indiana Utility Regulatory Commission approved the Evansville-based utility's plan Wednesday.
Vectren provides gas and/or electricity to more than 1 million customers in service territories that cover nearly two-thirds of Indiana and about 20 percent of Ohio.
The state office that represents consumer interests in utility matters says Vectren's energy-efficiency proposal seeks to recover more costs than necessary from its customers.
Vectren will meet with some of its natural gas customers to apologize for an error that led to March bills that were more than $200 higher than a year ago in some cases.
Miller Pipeline has seen its head count grow from 1,700 to 3,600 since 2008, partly because of its investment in the shale-oil fracking boom. But it also has a lucrative fallback line of business: replacing aging natural-gas pipes.
Some public assistance organizations in Indiana say many Vectren electricity customers are seeking help paying big bills from the utility correcting ones that were underestimated during the summer.
Several thousand Vectren electricity customers in Indiana are facing huge bills after the company underestimated what they owed over the summer.
The approval from the Indiana Utility Regulatory Commission gives Vectren permission to charge a monthly fee to cover 80 percent of the project's estimated $865 million cost. The fee will show up on customer bills starting in 2015 and continue through 2021.
One of Indiana's largest natural-gas utilities is selling its coal-mining subsidiary to a southern Indiana-based coal-mining company, putting more than 800 coal miners' jobs at risk.
The infrastructure work will upgrade the gas utility’s network across much of central Indiana.
The Indiana Utility Regulatory Commission says Northern Indiana Public Service Co., Vectren and Citizens Gas didn't follow procedures and keep accurate pipeline records.