UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Southern Indiana Gas & Electric Company )
Vectren Utility Holdings, Inc. ) Docket No. EC00-___-000
Vectren Corporation )
APPLICATION FOR APPROVAL OF CORPORATE REORGANIZATION
Pursuant to Section 203 of the Federal Power Act, Southern Indiana Gas &
Electric Company ("SIGECO"), Vectren Corporation ("Vectren") and Vectren Utility
Holdings, Inc. ("VUHI") (jointly, "Applicants") hereby file this application for
approval of a proposed corporate reorganization (the "Reorganization"). The
proposed Reorganization involves a change in the ownership structure of SIGECO
and other Vectren subsidiaries, Community Natural Gas Company ("Community"),
Indiana Gas Company, Inc. ("Indiana Gas"), and Vectren Energy Delivery of Ohio,
Inc. ("OhioCo") (collectively, the "Vectren Companies"), that will be
accomplished by Vectren contributing the stock of such subsidiaries to its newly
formed, wholly-owned subsidiary, VUHI.
As is demonstrated below, the proposed Reorganization is consistent with
the public interest. In support hereof, the Applicants state:
I. Introduction
This Reorganization is essentially similar to the formation of a holding
company or other internal corporate reorganizations approved by the
Commission.\1 As an internal reorganization, the proposed Reorganization should
not raise concerns of market power, or other issues of interest to the
Commission. The proposed Reorganization will only accomplish a change in
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1/ See, e.g., Central Maine Power Co., 84 FERCP. 61,030 (1998).
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corporate structure and will not cause a change in ultimate control of any of
the assets owned by the parent company./2
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2 See Duke Energy Corp. and Nantahala Power and Light Co., 83 FERCP. 62,181
(1998).
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The Reorganization will not affect jurisdictional contracts or rates. The
Reorganization will not create any change in the ultimate control of the
subsidiaries, nor will it introduce a new player into the market.
The Reorganization also will not have any adverse impact on regulation
since no new registered holding company will be created and, therefore, the
jurisdiction of the Securities and Exchange Commission ("SEC") will not be an
issue. For these reasons, the Reorganization should be approved by the
Commission as being in the public interest.
II. The Vectren Companies
A. Southern Indiana Gas & Electric Company
SIGECO is engaged in the generation, transmission, distribution and sale of
electric energy, as well as the purchase of natural gas and its transportation,
transmission, distribution and sale in a service area covering all or parts of
ten counties in southwestern Indiana. Electric distribution service at retail is
supplied to customers in Evansville and 74 other cities, towns and communities,
as well as adjacent rural areas. SIGECO provides wholesale sales service to an
additional five communities. SIGECO provides full requirements service to the
City of Huntingburg and the City of Boonville, Indiana. SIGECO provides electric
distribution service at retail to approximately 126,000 customers. It is a party
to an interconnection agreement under which it provides firm power to the City
of Jasper, Indiana. Under an agreement dated June 26, 1969, filed with the
Commission, SIGECO's FERC Rate Schedule No. 29, as amended, SIGECO makes sales
to Alcoa Generating Corporation.
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SIGECO is a member of the East Central Area Reliability Group ("ECAR")
under an agreement that obligates it to maintain a spinning reserve margin.
SIGECO is interconnected with Louisville Gas and Electric Co., PSI Energy, Inc.,
Indianapolis Power & Light Co., Hoosier Energy, Big Rivers Electric Corporation,
Wabash Valley Power Association and the City of Jasper. Its 1999 peak load was
1,199.5 MW.
SIGECO has filed an open-access transmission tariff with the Commission in
accordance with Order No. 888. The Commission approved the non-rate terms and
conditions of the tariff in 1996 (See Atlantic City Electric Co., et al., 77
FERCP. 61,144 (1996)) and approved the rates provided for therein the following
year (See Allegheny Power System, Inc., et al., 80 FERCP. 61,143 (1997)). SIGECO
has also adopted Standards of Conduct, which the Commission has held to be
consistent with Order No. 889. See Ameren Services Co., et al., 86 FERCP. 61,079
(1999)).
Since March 1999, SIGECO applied to become, and was accepted as, a
Participant in the Midwest Independent Transmission System Operator.
In Southern Indiana Gas & Electric Co., 77 FERCP. 61,024 (1996), the
Commission approved SIGECO's application for authority to sell electricity at
market-based rates. The Commission's action was based in part upon a finding
that Southern Indiana's "market share of installed and uncommitted generating
capacity will not exceed levels [that] the Commission previously has found to be
acceptable." Id. at 61,092.
SIGECO's retail electric service is regulated by the Indiana Utility
Regulatory Commission ("IURC"). The IURC also regulates SIGECO's natural gas
business. SIGECO supplies natural gas to approximately 107,000 customers in
Indiana. It operates 2,932 miles of gas transmission and distribution lines. The
SIGECO gas system also includes a number of underground gas storage fields.
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In 1999, SIGECO had operating revenues of approximately $375.8 million and
net income of approximately $46.7 million. SIGECO's gas utility operations are
located in a single contiguous area in southwestern Indiana. SIGECO purchases
nearly 100% of its system supply gas requirements from the Gulf Coast production
basin, particularly in the on-shore and offshore Texas and Louisiana producing
regions. SIGECO has contracted for firm transmission capacity on five interstate
gas pipelines: Texas Gas Transmission Corporation, Midwestern Gas Transmission
Company, Tennessee Gas Pipeline Company, ANR Gas Pipeline Company and Texas
Eastern Transmission Corporation.
B. Vectren Corporation
Vectren was formed in June of 1999 for the purpose of serving as the entity
resulting from the combination of Indiana Energy, Inc. and SIGCORP, Inc. That
combination occurred on March 31, 2000./3 Through its subsidiaries, SIGECO,
Community and Indiana Gas, Vectren provides electric and/or gas utility service
to customers in Southern and Central Indiana. Vectren also owns a number of
additional subsidiaries that will not become subsidiaries of VUHI, listed in
Attachment A hereto. Vectren is a public utility holding company that claims
exemption from registration pursuant to Rule 2 under Section 3(a)(1) of the
Public Utility Holding Company Act of 1935 ("PUHCA").
C. Vectren Utility Holdings, Inc.
VUHI is an Indiana corporation, and a wholly-owned subsidiary of Vectren.
VUHI was created on March 31, 2000 to serve as the intermediate holding company
for Vectren's utility interests. Upon receipt of the necessary regulatory
authorization, Vectren will contribute the common stock of a number of its
subsidiaries, including SIGECO, to VUHI.
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3 Southern Indiana Gas & Electric Co. and Vectren Corp., 89 FERCP. 61,288 (1999)
("Merger Order").
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VUHI will claim exemption from registration under PUHCA pursuant to Section
3(a)(1).
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D. Other Vectren Companies That Will Become Subsidiaries of VUHI
In addition to SIGECO, the following Vectren Companies will become
subsidiaries of VUHI: Community Natural Gas Company/4, Vectren Energy Delivery
of Ohio, Inc. ("OhioCo")/5 and Indiana Gas Company, Inc/6.
III. The Proposed Reorganization
The proposed transaction, for which Commission authorization is sought
herein, is the contribution by Vectren of the common stock of SIGECO to its
wholly-owned subsidiary VHUI. Attached hereto as Attachment A is a chart that
depicts the proposed corporate structure following the proposed Reorganization.
IV. The Proposed Reorganization Is Consistent With The Public Interest
The Commission has restated the factors it will examine in considering
transactions that are subject to Section 203 of the Federal Power Act.
Specifically, the Commission will consider (a) the effect of the transaction on
competition; (b) the effect of the transaction on rates; and, (c) the effect of
the transaction on regulation./7 Consideration of these factors shows that the
4/ Community is a very small local natural gas distribution company that
provides service to approximately 7,000 customers in Southern Indiana.
Community's operations are subject to regulation by the IURC. Vectren has a 33%
interest in Community.
5/ OhioCo is an Ohio corporation created to hold a portion of certain of the
natural gas distribution assets that will be acquired from The Dayton Power &
Light Company ("DP&L Assets") and to operate them on behalf of itself and
Indiana Gas. After the acquisition of the DP&L Assets, the operations of OhioCo
will be subject to regulation by the Ohio Public Utility Commission.
6/ Indiana Gas is a local distribution company that provides gas distribution
service to approximately 510,000 customers in Indiana. The largest communities
served include Muncie, Anderson, Lafayette-West Lafayette, Bloomington, Terre
Haute, Marion, New Albany, Columbus, Jeffersonville, New Castle and Richmond. In
1999, Indiana Gas had operating revenues of approximately $431.4 million and a
net income of approximately $29.7 million. The IURC regulates Indiana Gas'
business. Indiana Gas' operations are covered by the Hinshaw Amendment and
exempt from Commission's regulations under Section 1 (b) and 1(c) of the Natural
Gas Act, 15 U.S.C.ss.ss.717 (b), 717(c) (Indiana Gas & Water Co., Inc., 13
F.P.C. 1373 (1954)) and under Section 7(f) of the Natural Gas Act, 15
U.S.C.ss.717f(f) (Ohio River Pipeline Corp., et al., 55 FERCP. 61,365 (1991)).
7/ 18 C.F.R.ss.2.26 (1999). Inquiry Concerning the Commission's Merger Policy
Under the Federal Power Act: Policy Statement, Order No. 592, III FERC Stats. &
Regs. [Regs. Preambles]P. 31,044 (1996), recon. denied, Order No. 592-A, 79
FERCP. 61,321 (1997) ("Merger Policy Statement").
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intra-corporate change in ownership of SIGECO clearly warrants approval as being
consistent with the public interest.
The Reorganization is designed to provide increased financial, managerial,
and organizational flexibility in order to better position Applicants to operate
in the changing energy industry. The intermediate holding company structure will
serve to further streamline the operations of the Vectren utilities, and to
provide an additional degree of structural separation for those companies.
Further, the Reorganization will promote the economical and efficient
development of an integrated public utility system, thereby serving the public
interest.
A. The Proposed Reorganization Will Have No Adverse Effect On Competition
The proposed Reorganization will not create or enhance market power in any
market under the standards employed by the Commission. This is so for one basic
reason: the Reorganization is a purely intra-corporate transaction. It will not
increase Vectren's ownership or control of transmission or generation
facilities. The Commission has found that such purely intra-corporate
reorganizations will not have an anti-competitive effect./8 Moreover, the
transaction will promote the economical and efficient development of an
integrated public utility system, thereby serving the public interest.
In the Merger Order, the Commission concluded that the merger of the parent
companies of SIGECO and Indiana Gas into Vectren did not raise horizontal market
power issues. Additionally, the Commission found that "the merged company's
consolidation of delivered gas and generation interests will not create or
enhance the ability of the merged company to adversely affect prices or output
in downstream electricity markets and, as a result, the proposed merger will not
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8 See Boston Edison Co. and BEC Energy, 80 FERCP. 61,274 at 61,994 (1997).
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adversely affect competition in electricity markets." Id. at 61,901-02. Nothing
has altered the basis for this determination.
As described by David Patton in his Affidavit, attached hereto as
Attachment B ("Patton Affidavit"), "[t]he restructuring Vectren proposes, in and
of itself does not raise any competitive concerns since it does not increase
Vectren's control of electric generation, electric transmission assets, or
natural gas assets." Patton Affidavit at 4.
Vectren and one of its subsidiaries, OhioCo have entered into an agreement
to purchase certain of the natural gas distribution assets of The Dayton Power &
Light Company ("DP&L")/9 (the "DP&L Assets"). The acquisition is described in
Vectren and VUHI's filings with the SEC, copies of which are attached hereto as
Exhibit G./10 The DP&L Assets are further described in the Patton Affidavit.
This acquisition of the DP&L Assets is unrelated to the Reorganization in
that it will occur with or without the Reorganization. See Patton Affidavit at
4. Nevertheless, Dr. Patton has examined whether this acquisition potentially
raises any competitive concerns under the Commission's analytic framework
outlined in the Notice of Proposed Rulemaking establishing merger filing
requirements ("Filing Requirements NOPR")./11 Dr. Patton concludes that
Vectren's acquisition of the DP&L Assets will not create or enhance vertical
market power in the relevant market for a number of reasons. Id. at 5.
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9/ DP&L is a wholly owned subsidiary of DPL, Inc., a public utility holding
company that claims exemption from registration pursuant to Rule 2 under Section
3(a)(1). DP&L provides electric and gas service to customers in west central
Ohio.
10/ This acquisition was reviewed by the Antitrust Division of the Department of
Justice and the Federal Trade Commission under the Hart-Scott-Rodino Act and
rules and regulations thereunder. Following the receipt of responses to a second
request, the Department of Justice has closed its investigation on this matter.
11/ Revised Filing Requirements Under Part 33 of the Commission's Regulations;
Notice of Proposed Rulemaking, 63 Fed. Reg. 20340 (1998).
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First, Dr. Patton's analysis reveals that natural gas is used to produce
only a de minimis amount of electricity in the relevant market, which precludes
the possibility that the control of natural gas assets could raise vertical
market power concerns. Patton Affidavit at 5-7. On this basis, he concludes that
a full vertical screen analysis is not necessary to determine that the
acquisition will not increase vertical market power consistent with the
Commission's policy outlined in the Filing Requirements NOPR./12
Second, Dr. Patton analyzes the increase in Vectren's natural gas capacity
holdings due to the acquisition and determines that the increase is not large
enough to raise Vectren's market share or the market's concentration to levels
that would generate competitive concerns in the upstream natural gas market. Id.
at 8. The market shares he estimates after the acquisition range from 10 to 20
percent in the scenarios he analyzes and the market concentration level remains
below 1000 points in all scenarios. Dr. Patton concludes from these results that
"...there is virtually no possibility for Vectren to exercise market power
unilaterally or in coordination with others in the upstream natural gas market".
Id. at 8.
Dr. Patton also cites a number of factors in the relevant market that
mitigate any competitive concerns related to the upstream natural gas market.
These factors include: 1) the region's vast quantity of natural gas storage, 2)
the large share of Vectren's gas transportation contracts that are expiring
near-term and will not be renewed, and 3) the construction of considerable
amounts of new pipeline capacity into or through the Midwest. Id.
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12/ Moreover, in the Merger Policy Statement, the Commission indicated that
applicants should use a screening analysis to determine the effects of a merger
on competition. However, no screen analysis is possible where the ownership of
certain public-utility subsidiaries is transferred in an intra-corporate
reorganization, to a wholly-owned subsidiary of the transferor. Moreover, as the
Commission indicated in the Merger Policy Statement, its policy statement
focuses on mergers rather than "relatively minor" transactions that require
Section 203 authorization. Merger Policy Statement, at 30,113 n.8. The
transaction for which approval is sought herein is "relatively minor" and does
not involve a merger.
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Consequently, even after the acquisition of the DP&L Assets is completed,
Applicants will not have the ability to use their control of natural gas
facilities or transportation capacity to raise the costs of their rivals in the
downstream electricity market, thereby allowing Applicants to profitably raise
prices./13 Accordingly, the Reorganization will not adversely affect
competition.
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13 See San Diego Gas & Electric Co. and Enova Energy, Inc. 79 FERCP. 61,372
(1997).
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B. The Proposed Reorganization Will Have No Effect On Rates
In the Merger Policy Statement, the Commission made clear that its concern
with the effect of a proposed transaction on rates is to protect ratepayers from
rate increases because of a merger. See Merger Policy Statement, III FERC Stats.
& Regs. at 30,123.
The proposed transaction will have no adverse effect on the wholesale
electric rates of SIGECO. SIGECO provides full requirements service to the City
of Huntingburg and the City of Boonville, Indiana. SIGECO also provides partial
requirements service to the City of Jasper, Indiana, and backup and emergency
power to Alcoa Generating Company. To protect wholesale customers from any
merger-related costs, Applicants agree that none of the costs arising out of the
Reorganization will be used as a vehicle for an increase in their jurisdictional
entities' wholesale electric rates. If the Applicants sought to alter either
SIGECO's transmission or wholesale power rates, they would be required to file
such a change under Section 205 of the Federal Power Act. Such a filing would
give the Commission full opportunity to review the proposed change, as well as
provide the affected customers with the opportunity to raise any rate-related
issues.
Additionally, with regard to the agreements under which SIGECO sells power
at wholesale under its market-based rate authority, if SIGECO were to attempt to
institute an unjustified increase in its rates, its customers would simply go
elsewhere to purchase their bulk power supplies. The Reorganization will not
have an adverse effect on SIGECO's market-based rates because those rates are
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based on the market, not costs, and market forces will assure that these rates
remain just and reasonable.
Therefore, the Reorganization does not present any rate-related issues.
Thus, the Commission should decide that the Reorganization will not have any
adverse effect on rates and that ratepayers will be protected from any harm
related to the transaction.
C. The Proposed Reorganization Will Not Affect Regulation
As the Commission explained in its Merger Policy Statement, the
Commission's primary concern with the effect of a proposed merger on regulation
involves shifts of authority between the Commission's jurisdiction and that of
the SEC or state commissions. Merger Policy Statement, III FERC Stats. & Regs.
at 30,124-125. Nothing in the Reorganization will affect the manner or the
extent to which the Commission or state commissions can regulate the
transactions and facilities of Applicants.
Currently, SIGECO is subject to broad regulation as to rates and other
matters, including affiliate transactions, by the IURC. SIGECO's electric
operations are subject to the jurisdiction of the FERC under the Federal Power
Act with respect to wholesale electric rates and other matters. The gas
distribution operations of SIGECO are covered by the Hinshaw Amendment, and
thus, are exempt from regulation by the FERC under Sections 1(b) and 1(c) of the
Natural Gas Act.
No state commission will obtain jurisdiction as a result of the proposed
Reorganization.
No registered holding company is being created as a result of the
Reorganization. Vectren and VUHI qualify for exempt status under Section 3(a)(1)
of PUHCA, and have filed with the SEC a Form U-1, Declaration Under the Public
Utility Holding Company Act of 1935. Copies of the Form U-1 and the Amendment
subsequently filed are attached hereto as Exhibit G. In order to avoid any
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concern by this Commission that Vectren and VUHI may withdraw the SEC
application, or that the SEC may deny the application, thereby permitting
Applicants to invoke the Ohio Power doctrine,/14 Applicants agree to refrain to
invoke the Ohio Power doctrine with regard to intra-corporate transactions./15
Thus, the Commission's regulation will not be impaired by the shift of any
regulatory authority.
In addition, the Reorganization will not interpose any wholesale seller
into a transaction that had previously been a retail sale. Therefore, it will
not deprive any state jurisdiction over retail sales. Nor will the
Reorganization result in the transformation of any power sales (wholesale or
retail) into intra-divisional transfers; for that reason as well, the
Reorganization will not deprive the Commission or any state of jurisdiction./16
V. Information Required by Section 33.2 of the Commission's Regulations
In support of this application, Vectren and VUHI hereby submit the
following information required by 33.2 of the Commission's Regulations.
Section 33.2 (a)
Southern Indiana Gas & Electric Company
Vectren Corporation
Vectren Utility Holdings, Inc.
20 N.W. Fourth Street
P.O. Box 209
Evansville, Indiana 47702-0209
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14/ Ohio Power Co. v. FERC, 954 F.2d 779 (D.C. Cir. 1992), cert. denied, FERC v.
Ohio Power Co., et al., 506 U.S. 981 (1992).
15/ Vectren had already committed to refraining from invoking the Ohio Power
doctrine in SIGECO's Application for Authorization and Approval of Merger under
Section 203 of the Federal Power Act, filed on August 13, 1999, in Docket No.
EC99-106-000 ("Merger Application").
16/ See Washington Water Power Co. and Sierra Pacific Power Co., 73 FERCP.
61,218 (1995).
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Section 33.2 (b)
Ronald E. Christian Andrea J. Chambers, Esq.
Senior Vice President, General Sonia Mendonca, Esq.
Counsel and Secretary LeBoeuf, Lamb, Greene & MacRae LLP
Southern Indiana Gas & Electric Company 1875 Connecticut Avenue, NW
Vectren Corporation Washington, DC 20009
Vectren Utility Holdings, Inc.
20 N.W. Fourth Street
P.O. Box 209
Evansville, Indiana 47702-0209
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Section 33.2 (c ) and (d)
SIGECO provides retail electric service in the following counties of the
State of Indiana: Vanderbugh, Posey, Gibson, Warrick, Spencer and Pike. The
facilities used by SIGECO to provide FERC-jurisdictional sales and transmission
service consist of the generation facilities listed on Exhibit F attached to
SIGECO's Application for Authorization and Approval of Merger under Section 203
of the Federal Power Act, filed on August 13, 1999, in Docket No. EC99-106-000
("Merger Application"), incorporated herein by reference and the transmission
facilities shown on Exhibit E to the Merger Application, incorporated herein by
reference.
Section 33.2 (e)
As described in Section III hereof, the proposed transaction is a corporate
reorganization. This Application requests authorization for a change in
ownership of SIGECO through the contribution by Vectren of the stock of SIGECO
to VUHI. No consideration is being paid for the capital contribution.
Section 33.2 (f)
As described in this Application, VUHI's parent, Vectren, will make a
capital contribution of the stock of SIGECO to VUHI. As discussed herein, the
proposed reorganization will include all of the jurisdictional operating
facilities of the parties to the transaction. The jurisdictional facilities will
be operated after the consummation of the proposed Reorganization in the same
manner as they are currently operated. All facilities used to provide
jurisdictional service will remain the property of SIGECO, although control will
be indirectly transferred to VUHI. A list and map of such facilities are
attached to the Merger Application as Exhibits E and F and incorporated herein
by reference. The use of such facilities is described in Section II A of this
Application, which is incorporated herein by reference.
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Section 33.2 (g)
The transaction will take place at the holding company level, not at the
operating company level. After the transaction, the books of accounts of
Vectren's public-utility subsidiaries will continue to be maintained in
accordance with the Commission's Uniform System of Accounts, just as they are
today. No entries will be necessary to reflect the transaction. Therefore,
Applicants respectfully request a waiver of the requirement in section 33.2(g)
of the Commission's regulations./17
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17/ See Merger Order, and Central Illinois Light Co. and the AES Corp., 87
FERCP. 61,293 (1999).
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Section 33.2 (h)
The transaction will take place at the holding company level and,
therefore, it will have no material effect on any contract for the purchase,
sale or interchange of electric energy. There are no plans by Applicants to
alter the performance of their obligations or those of their subsidiaries under
jurisdictional contracts in any way.
Section 33.2 (i)
Vectren and VUHI have filed a Form U-1, Declaration Under the Public
Utility Holding Company Act of 1935 with the Securities and Exchange Commission.
Copies of the Form U-1 and the Amendment subsequently filed are attached hereto
as Exhibit G. No other filings are required in connection with the proposed
Reorganization.
Section 33.2 (j)
The facts relied upon to show that the proposed transaction is consistent
with the public interest are set forth in Section IV of this Application, and
the attachments and exhibits, and are incorporated herein by reference.
Section 33.2 (k)
A full and complete description of the franchises held by SIGECO is set
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forth in Section II A of this Application. Under Indiana law, the franchises
held by SIGECO are automatically converted into indeterminate permits of
perpetual duration. The oversight of service areas is done by IURC pursuant to
Indiana statutes.
Section 33.2 (l)
A draft form of notice suitable for publication in the Federal Register is
attached as Attachment C hereto. An electronic version of the draft notice is
also submitted on a 3 1/2" diskette in WordPerfect 5.1 format.
VI. Request for Expedited Treatment
Applicants respectfully request that the Commission act on this Application
not later than August 10, 2000. As described above, the Reorganization and the
acquisition of the DP&L Assets are the subject of a Declaration Under the Public
Utility Holding Company Act of 1935 filed by Vectren and VUHI with the SEC (as
subsequently amended). In that filing, Applicants request that the SEC reserve
jurisdiction on the contribution of stock to VUHI in the event that the SEC
notice period closes prior to the receipt of a FERC order with regard to the
Reorganization. The SEC notice period, as proposed by Vectren and VUHI would
close by July 21, 2000. This request for expedited treatment and the request for
SEC to reserve jurisdiction is necessary so the issue of the contribution of
stock to VUHI will neither delay nor otherwise affect the SEC review of the
acquisition of the DP&L Assets. The timely review by the SEC of the acquisition
of the DP&L Assets is required for business reasons, including the need for
Vectren to perform gas planning and acquisition for the 2000-2001 heating
period. Thus, it is important that the Commission approve the reorganization by
August 10.
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VII. Conclusion
In light of the clear absence of any adverse impact on competition in any
market, any regulated cost-based rates, or the nature of regulation, the change
in ownership and disposition of jurisdictional facilities satisfies the
standards of the Merger Policy Statement. Therefore, it should be approved as
being "consistent with the public interest." Applicants respectfully request
that the Commission approve the Reorganization on an expedited basis to allow
this beneficial business transaction to be consummated.
Respectfully submitted,
------------------------
Andrea J. Chambers
Sonia Mendonca
LeBoeuf, Lamb, Greene & MacRae,
L.L.P.
1875 Connecticut Avenue, N.W.
Washington, D.C. 20009
(202) 986-8000
Attorneys for Southern Indiana Gas
& Electric Co., Vectren Corporation
and Vectren Utility Holdings, Inc.
Dated: July 10, 2000
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EXHIBITS REQUIRED UNDER 18 C.F.R. ss. 33.3
Exhibit A
Copies of all resolutions of directors authorizing the proposed
disposition, merger, or consolidation of facilities, or acquisition of
securities, in respect to which the application is made, and, if approval of
stockholders has been obtained, copies of the resolutions of the stockholders
should also be furnished.
No resolution is required for a capital contribution and, therefore,
Applicants respectfully request a waiver of this requirement. An internal
memorandum describing the internal procedures for authorizing the Reorganization
is attached hereto as Exhibit H.
Exhibit B
A statement of the measure of control or ownership exercised by or over
each party to the transaction as to any public utility, or bank, trust company,
banking association, or firm that is authorized by law to underwrite or
participate in the marketing of securities of a public utility, or any company
supplying electric equipment to such party. Where there are any intercorporate
relationships through holding companies, ownership of securities or otherwise,
the nature and extent of such relationship; also state whether any of the
parties to the transaction have officers or directors in common. If not a member
of any holding company system, include a statement to that effect.
The governance structure of the Applicants is fully described in the
preceding sections of this Application and, therefore, Applicants respectfully
request a waiver of the requirement to file a separate statement.
<PAGE>
Exhibit C
Balance sheets and supporting plant schedules for the most recent 12 month
period only, on an actual basis and on a pro forma basis in the form prescribed
for Statement A and B of the FPC Annual Report Form No. 1, prescribed by Sec.
141.1 of this chapter (Chapter I of 18 C.F.R.). The adjustments necessary to
arrive at the pro forma statements should be clearly identified.
As indicated before in this Application, none of the financial statements
of SIGECO will be affected by the proposed transaction. Therefore, no useful
purpose would be served by requiring the filing of financial data showing the
impact of the transaction on a pro forma basis. Applicants respectfully request
a waiver of the requirement to file this information. See Merger Order, and
Central Illinois Light Co. and the AES Corp., 87 FERC P. 61,293 (1999).
Exhibit D
A statement of all known contingent liabilities except minor items such as
damage claims and similar items involving relatively small amounts, as of the
date of the application.
As indicated before in this Application, none of the financial statements
of SIGECO will be affected by the proposed transaction. Therefore, no useful
purpose would be served by requiring the filing of financial data showing the
impact of the transaction on a pro forma basis. Applicants respectfully request
a waiver of the requirement to file this information. See Merger Order, and
Central Illinois Light Co. and the AES Corp., 87 FERC P. 61,293 (1999).
Exhibit E
Income statement for the most recent 12 month period only, on an actual
basis and on a pro forma basis in the form prescribed for Statement C of the FPC
<PAGE>
Annual Report Form No.1 prescribed by Sec. 141.1 of this Chapter. The
adjustments necessary to arrive at the pro forma statements should be clearly
identified.
As indicated before in this Application, none of the financial statements
of SIGECO will be affected by the proposed transaction. Therefore, no useful
purpose would be served by requiring the filing of financial data showing the
impact of the transaction on a pro forma basis. Applicants respectfully request
a waiver of the requirement to file this information. See Merger Order, and
Central Illinois Light Co. and the AES Corp., 87 FERC P. 61,293 (1999).
Exhibit F
An analysis of retained earnings for the period covered by the income
statements referred to in exhibit E.
As indicated before in this Application, none of the financial statements
of SIGECO will be affected by the proposed transaction. Therefore, no useful
purpose would be served by requiring the filing of financial data showing the
impact of the transaction on a pro forma basis. Applicants respectfully request
a waiver of the requirement to file this information. See Merger Order, and
Central Illinois Light Co. et al. 87 FERC 61,293 (1999).
Exhibit G
A copy of each application and exhibit filed with any other Federal or
State regulatory body in connection with the proposed transaction, and if action
has been taken thereon, a certified copy of each order relating thereto.
Copies of Applicants' Form U-1, Declaration Under the Public Utility
Holding Company Act of 1935 and Amendment are attached hereto as Exhibit G.
<PAGE>
Exhibit H
A copy of all contracts in respect to the sale, lease, or other proposed
disposition, merger or consolidation of facilities, or purchase of securities,
as the case may be, together with copies of all other written instruments
entered into or proposed to be entered into by the parties to the transaction
pertaining thereto.
A copy an internal memorandum related to the Reorganization is enclosed.
Exhibit I
A general or key map on a scale of not more than 20 miles to the inch
showing in separate colors the properties of each party to the transaction, and
distinguishing such parts of them as are included in the proposed disposition,
consolidation or merger. The map should also clearly indicate all
interconnections and the principal cities of the area served. Whenever possible,
the map should not be over 30 inches in its largest dimension.
A map of the jurisdictional facilities involved in the transaction is
attached as Exhibit E to SIGECO's Application for Authorization and Approval of
Merger under Section 203 of the Federal Power Act, filed on August 13, 1999, in
Docket No. EC99-106-000 ("Merger Application"), and is incorporated herein by
reference.
<PAGE>
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Southern Indiana Gas & Electric Company )
Vectren Utility Holdings, Inc. ) Docket No. EC00-___-000
Vectren Corporation )
NOTICE OF APPLICATION FOR APPROVAL
OF CORPORATE REORGANIZATION
Take notice that on July 10, 2000, Southern Indiana Gas & Electric
Company ("SIGECO"), Vectren Corporation ("Vectren") and Vectren Utility
Holdings, Inc. ("VUHI"), filed with the Federal Energy Regulatory Commission an
application for approval of corporate reorganization under Section 203 of the
Federal Power Act. The proposed Reorganization involves a change in the
ownership structure of SIGECO, that will be accomplished by Vectren contributing
the stock of SIGECO to its newly formed, wholly-owned subsidiary, VUHI.
Any person desiring to be heard or to protest such filing should file a
motion to intervene or protest with the Federal Energy Regulatory Commission,
888 First Street, NE, Washington, DC 20426, in accordance with Rules 211 and 214
of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and
385.214). All such motions or protests should be filed on or before ___________.
Protests will be considered by the Commission in determining the appropriate
action to be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a motion to
intervene. Copies of these filings are on file with the Commission and are
available for public inspection. This filing may also be viewed on the Internet
at http://www.ferc.fed.us/online/rims.htm (call 202-208-2222 for assistance).
David P. Boergers,
Secretary
<PAGE>
CERTIFICATE OF SERVICE
I hereby certify that I have this day served the foregoing document upon
Chairman William D. McCarty
Indiana Utility Regulatory Commission
Indiana Government Center South
302 West Washington Street
Room E-306
Indianapolis, IN 46204
Jerry Schitter
Jim Stallman
P. O. Box 750
Jasper, IN 47547
Jack Joyce
P.O. Box 9
Tell City, IN 47586
Dave Mullholland
508 E 4th Street
Huntingburg, IN 47542
Mayor Pam Hendrickson
P. O. Box 585
Boonville, IN 47601
Henry Haake
P. O. Box 7
Ferdinand, IN 46532
Steve Seibert
610 Washington
Cannelton, IN 47520
Gary Dougan
ALCOA Generating Station
P. O. Box 10
Newburgh, IN 47630
Dated at Washington, D.C. this 10th of July, 2000.
--------------------
Sonia Mendonca
<PAGE>
List of Additional Vectren Corporation Subsidiaries
1. Vectren Utility Holdings, Inc. is a holding company which provides
environmental and other services to Vectren's utility companies.
2. Vectren Generation Services, Inc. is an intermediate holding company under
Vectren for Southern Indiana Minerals, Inc. and Vectren Fuels, Inc.
3. Southern Indiana Minerals, Inc. processes and markets coal combustion
by-products.
4. Vectren Fuels, Inc. owns and operates coal mining properties, including a
one-hundred percent (100%) ownership interest in Cypress Creek Mine, Inc.,
Prosperity Mine, LLC and Cypress Creek Mine, LLC and a ninety-nine percent (99%)
ownership interest in SFI Coal Sales, LLC.
5. Vectren Foundation, Inc. is a non-profit corporation under Vectren, which
makes contributions to organizations and communities in which Vectren provides
utility services.
6. Vectren Resources, LLC primarily provides information technology resources to
Vectren and its subsidiaries.
7. Vectren Capital Corp., and its direct subsidiary, IEI Capital Corp., are
financing vehicles for Vectren's non-regulated subsidiaries.
8. Vectren Enterprises, Inc. is a intermediate holding company for five
non-regulated businesses: Vectren Communications, Inc., Vectren Energy Services,
Inc., Vectren Financial Group, Inc., Vectren Utility Services, Inc. and Vectren
Ventures, Inc.
9. Vectren Communications, Inc. is a holding company for SIGCORP Communications
Services, Inc., which conducts communications-related strategic initiatives.
10. SIGECO Advanced Communications, Inc. holds Vectren's investment in SIGECOM,
Inc. and Utilicom Networks, LLC. Utilicom Networks, LLC is a joint venture
between Advanced Communications, Inc. and Utilicom Networks, Inc., which markets
and provides enhanced communications services over a high-capacity fiber-optic
network in SIGECO's service territory.
11. Vectren Energy Services, Inc. is an intermediate holding company for Vectren
Energy Solutions, Inc., which holds a one-hundred percent (100%) interest in
SIGCORP Energy Services, Inc., Energy Systems Group, Inc., Vectren Environmental
Services, Inc., Indiana Energy Services, Inc. (dormant) and SIGCORP Power
Marketing, Inc. (dormant), and a fifty percent (50%) ownership interest in
ProLiance Energy, LLC.
12. SIGCORP Energy Services, Inc. has a ninety-nine percent (99%) ownership
interest in SIGCORP Energy Services, LLC, which provides natural gas, pipeline
management and other natural gas related services, through its ownership
<PAGE>
interest in SIGCORP Gas Marketing, LLC, Ohio Valley Hub, LLC and Signature
Energy Management, LLC.
13. Energy Systems Group, Inc. has a two-thirds ownership interest in Energy
Systems Group, LLC, an energy-related performance contracting firm serving
industrial and commercial customers.
14. Vectren Environmental Services, Inc. holds a fifty-one percent (51%)
ownership interest in Air Quality Services, LLC, a joint venture created to
provide air quality monitoring and testing services to industry and utilities.
15. ProLiance Energy, LLC provides gas and power to more than 1,000 commercial,
industrial, municipal residential and utility customers.
16. Vectren Financial Group, Inc. is an intermediate holding company for the
following entities: Southern Indiana Properties, Inc., Vectren Synfuels, Inc.
and Energy Realty, Inc.
17. Southern Indiana Properties, Inc. makes investments in real estate, which
include: SIP-GT I, Inc., Southwest Lease Capital, Inc., Southern Indiana Joint
Ventures, Inc., MCN Equities, Inc. and Joint Ventures Affiliated, Inc.
18. Vectren Synfuels, Inc. owns a limited partnership in Pace Carbon Synfuels
Investors, L.P., which produces and sells coal-based synthetic fuel that
qualifies for federal tax credits.
19. Energy Realty, Inc. invests in real estate and affordable housing, including
a ninety-eight percent (98%) ownership interest in BCI Holding Co., LLC.
20. Vectren Utility Services, Inc. holds investments in non-regulated
subsidiaries which provide various services to Vectren, and include Reliant
Services, LLC, CIGMA, LLC, IEI Financial Services, LLC and Utility Debt
Collectors, Inc. (dormant).
21. Reliant Services, LLC is an underground locating, construction and meter
reading company.
22. CIGMA, LLC is a regional supplier of materials and integrated supply
solutions to the energy market and related industries.
23. IEI Financial Services, LLC performs third-party collections, energy-related
equipment leasing and related services.
24. Vectren Ventures, Inc. invests in energy-related companies and projects and
holds the remainder one percent (1%) interests in Vectren Resources, LLC,
SIGCORP Energy Services, LLC and IEI Financial Services, LLC.
<PAGE>
ATTACHMENT A
PROPOSED CORPORATE STRUCTURE
AFTER REORGANIZATION
AND LIST OF SUBSIDIARIES
<PAGE>
ATTACHMENT B
AFFIDAVIT OF DAVID B. PATTON
<PAGE>
ATTACHMENT C
NOTICE OF FILING
<PAGE>
EXHIBIT G
DECLARATION UNDER THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935
<PAGE>
EXHIBIT H
INTERNAL MEMORANDUM
