September 15, 1997
Securities and Exchange Commission
Operations Center
6432 General Green Way
Alexandria, VA 22312-2413
Gentlemen:
We are transmitting herewith Indiana Gas Company, Inc.'s
Current Report on Form 8-K.
Very truly yours,
/s/ Douglas S. Schmidt
Douglas S. Schmidt
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 15, 1997
INDIANA GAS COMPANY, INC.
(Exact name of registrant as specified in its charter)
INDIANA 1-6494 35-0793669
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification Number)
1630 North Meridian Street, Indianapolis, Indiana 46202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 926-3351
Item 5. Other Events
See the following press release dated
September 15, 1997, announcing the receipt by
Indiana Gas Company, Inc. (Indiana Gas), a
wholly owned subsidiary of Indiana Energy, Inc.,
of a ruling issued by the Indiana Utility
Regulatory Commission (IURC) on September 12,
1997. This ruling addresses a proceeding
initiated by a small group of Indiana Gas' and
Citizens Gas and Coke Utility's (Citizens Gas)
customers who contended that the gas service
contracts between ProLiance Energy, LLC, a non-
regulated marketing affiliate of Indiana Energy,
Inc., and Indiana Gas and Citizens Gas should be
disapproved by the IURC.
September 15, 1997
Indiana Energy, Inc. Receives Favorable Ruling
Regarding ProLiance Energy, LLC
On September 12, 1997, the Indiana Utility
Regulatory Commission issued the decision in the
complaint proceeding relating to the gas supply and
portfolio administration agreements between
ProLiance Energy, LLC and Indiana Gas Company, Inc.
and ProLiance and Citizens Gas & Coke Utility. The
Commission concluded that these agreements are
consistent with the public interest. The
management of Indiana Energy, Inc. believes that
the decision is supportive of the utilities'
relationship with ProLiance in all material
respects. ProLiance is an Indianapolis, Indiana
based marketer of energy and related services and
was formed in March of 1996 by affiliates of
Indiana Energy and Citizens Gas.
This decision is particularly important because
the Commission has recognized that significant
customer benefits can be achieved if utilities
are encouraged to work toward innovative customer
solutions in the changing energy marketplace. As
a result of ProLiance's provision of service to
Indiana Gas and Citizens Gas, in excess of $50
million in gas costs savings will be realized for
the customers of those utilities over the initial
four and one-half year term of the utilities'
agreements. Further, the Commission has
recognized that benefits for investors are
appropriate when risks are being assumed by those
investors.
As a result of this decision, Indiana Energy has
determined that a substantial portion of the
reserve it had previously recorded for earnings
associated with ProLiance's gas supply and gas
marketing business will be adjusted downward.
This will have the effect of increasing Indiana
Energy's 1997 net income by approximately $3
million.
The Commission's decision suggests that all
material provisions of the agreements between
ProLiance and the utilities are reasonable. In the
decision the Commission acknowledged that the
utilities' purchases of gas commodity from
ProLiance at index prices, as compared to
ProLiance's actual cost, is not unreasonable. The
Commission also acknowledged that the amounts paid
by ProLiance to the utilities for the prospect of
using pipeline entitlements if and when they are
not required to serve the utilities' firm
customers, and the fees paid by the utilities to
ProLiance for portfolio administration services are
not unreasonable. Nevertheless, with respect to
each of these matters, the Commission concluded
that additional findings in the gas cost adjustment
process would be appropriate and directed that
these matters be considered further in the pending,
consolidated gas cost adjustment proceeding
involving Indiana Gas and Citizens Gas. The
Commission has not yet established a schedule for
conducting these additional proceedings.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
thereunto duly authorized.
INDIANA GAS COMPANY, INC.
Registrant
Dated September 15, 1997 /s/Niel C. Ellerbrook
Niel C. Ellerbrook
Executive Vice President
and Chief Financial Officer
Dated September 15, 1997 /s/Jerome A. Benkert
Jerome A. Benkert
Vice President and Controller
