October 8, 1997
Securities and Exchange Commission
Operations Center
6432 General Green Way
Alexandria, VA 22312-2413
Gentlemen:
We are transmitting herewith Indiana Energy, 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): October 8, 1997
INDIANA ENERGY, INC.
(Exact name of registrant as specified in its charter)
INDIANA 1-9091 35-1654378
(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
Initiation Of Appeal Of The ProLiance Energy, LLC
Ruling
As reported on Form 8-K filed by Indiana Energy,
Inc. (Energy) and Indiana Gas Company, Inc.
(Indiana Gas) with the Securities and Exchange
Commission, on September 12, 1997, the Indiana
Utility Regulatory Commission (IURC) issued its
decision in the complaint proceeding brought by a
small group of large volume customers (Petitioners)
of Indiana Gas and Citizens Gas & Coke Utility
(Citizens) relating to the gas supply and portfolio
administration agreements between ProLiance Energy,
LLC (ProLiance) and Indiana Gas and ProLiance and
Citizens. The IURC concluded that these agreements
are consistent with the public interest. The
management of Energy 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 Energy and Citizens.
The IURC's decision suggests that all material
provisions of the agreements between ProLiance
and the utilities are reasonable. In the
decision the IURC acknowledged that the
utilities' purchases of gas commodity from
ProLiance at index prices, as compared to
ProLiance's actual cost, is not unreasonable.
The IURC 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 IURC 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.
The IURC has not yet established a schedule for
conducting these additional proceedings.
On October 6, 1997, counsel for Indiana Gas was
served with certain filings made with the Indiana
Court of Appeals (Court) by the Petitioners and
the Indiana Office of Utility Consumer Counselor
(OUCC). The effect of these filings is to
initiate an appeal of the IURC's decision by the
Petitioners and the OUCC.
Pursuant to the procedure governing appeals of
IURC decisions, at this time neither the
Petitioners nor the OUCC have indicated on what
basis they will attempt to challenge the IURC's
decision. The schedule for the appeal proposed
by the Petitioners and the OUCC indicates that
the earliest they will likely disclose such a
basis would be on January 12, 1998, when they
would be obligated to file the IURC's record of
proceedings with the Court.
As a result of the IURC's decision and
notwithstanding the initiation of the appeal,
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 would be adjusted
downward. This has had the effect of increasing
Energy's 1997 net income by approximately $3
million.
Although Indiana Gas' management believes that
based upon applicable Indiana law and the IURC's
record of proceedings in the ProLiance case the
IURC's decision should be upheld by the Court,
there can be no assurance as to that outcome.
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 ENERGY, INC.
Registrant
Dated October 8, 1997 /s/Niel C. Ellerbrook
Niel C. Ellerbrook
President and Chief Operating Officer
Dated October 8, 1997 /s/Jerome A. Benkert
Jerome A. Benkert
Vice President and Controller
