Vectren leader outlines company impact on Evansville region

7

Vectren leader outlines company impact on Evansville region
By: Carl Chapman, president and CEO of Vectren

My colleagues and I at Vectren are customers, too, and we’re dedicated to our region’s success.

As such, we are committed to cost control and efficiency. This commitment is demonstrated by the new dense pack technology we are planning to install at our A.B. Brown power plant. This technology increases the efficiency of our electric turbines by allowing us to burn less coal and, as a result, generates less emissions. While the cost to install the dense packs may seem substantial at $32 million – the cost of the technology will be offset through a reduction in coal burned. This investment, recently in the news, pays for itself and even produces a bill reduction (or credit) for customers.

We have installed environmental controls on our power plants that directly improve the air quality for greater Evansville and enable industry to grow and locate here because of the cleaner air. It’s a fact that our investments in these controls have caused our electric bills to climb. However, we are well-positioned to meet current and future Environmental Protection Agency regulations, while many neighboring utilities will now have to increase their rates to make the same investments. It’s also a fact that we have among the lowest rates in the state for natural gas bills; ranking the 18th lowest out of 20 companies.

When we formed Vectren more than a decade ago, we considered placing our headquarters in a number of cities. We chose Evansville and haven’t looked back. Our 1,300 local employees care about this community. They provide thousands of hours in volunteer time to countless nonprofit organizations, and they provide the single largest monetary gift to the United Way’s annual campaign.

I know that paying energy costs, especially when this summer’s temperatures forced higher usage, can be a challenge for many customers. It’s why we offer energy efficiency programs to help our customers use energy wisely. It’s why we’re helping customers with home weatherization. It’s also why we work hard to efficiently operate our utility. Although we remain focused on costs, our need to invest in infrastructure to maintain safety, reliability and a clean environment continues. Utilities everywhere are under significant pressure from government mandates, and they will be required to make substantial expenditures to comply.

We want to tell our story – how rates are determined, what programs we offer to help customers manage energy usage and how environmental investments have impacted rates. We will come to you. If you are a member of a civic club, church, neighborhood association or similar organization of 10 or more people, please invite us. You can schedule a Vectren presentation at www.vectren.com/speaker.

Carl Chapman
Chairman, President and CEO
Vectren Corporation

RELATED ARTICLESMORE FROM AUTHOR

7 COMMENTS

    • No.

      Defensive mode would be something like… We’d like to ask the regulatory body for permission to do new work (work that *might* eventually pay off for customers), but we know our customers are strapped, we know the timing is horrible (on the cusp of another recession), we know the upfront costs will be a burden, we know there might be other ways to achieve this, we know building a reputation of constant rate increases is bad policy for a Utility in a struggling economy, we know a ROE of 7.29% is [bleep], we know from feedback that the regulators won’t let us further soak our customer base… etc.

      That might be defensive?

      • What constitutes a nonbleep return on investment? I’ve yet to see a figure…

        You can’t change something simply by saying “no.” Come up with a number you think Vectren can live with, a propose it. Is your problem that you don’t have a clue?

  2. While it’s a nice story that the projected coal usage will drop and offset those initial costs… eventually?

    I didn’t hear the justification for the 7.29% return on equity, Mr. Chapman?

    “The company wants a guaranteed 7.29 percent fixed rate of return, and a tracker mechanism for adjustments to price in the years following the construction to assure that rate is achieved.” (http://www.courierpress.com/news/2011/sep/19/no-headline—ev_vectren/)

    • What is Your justification for a lower return on investment, and what exactly do you think that should be?

      • Well, look at ONB or Toyota? If return on equity, really, is in any way related to the amount of risk your capital is subject to… I would think that a monopoly with a GUARANTEED customer base and government mandated pricing could settle in with a significantly lower rate than what private industry can achieve… but I’m sure that doesn’t make any sense to you…

        Because my original point, was that this letter is like a payday lender telling you that “you’ll just get the cash and then you’ll just pay us back”. Isn’t it illegal for payday lenders to not include/disclose the interest rate they make on their customers? Isn’t what’s good for the goose, good for the gander?

Comments are closed.