October 9, 1998
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 9, 1998
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
See the following press release dated October 9, 1998, announcing
the decision by Indiana Gas, Citizens Gas and ProLiance to appeal the
October 8, 1998, Indiana Court of Appeals decision regarding ProLiance.
Indiana Gas, Citizens Gas and ProLiance Energy decide to appeal the
Court of Appeals Decision
Indiana Gas, (an affiliate of Indiana Energy, Inc.), Citizens Gas and
ProLiance Energy decided today to appeal the Court of Appeals decision
regarding ProLiance Energy to the Indiana Supreme Court. Concern
about the formation of ProLiance and its effect on natural gas
services were litigated in a lengthy hearing almost two years ago
before the Indiana Utility Regulatory Commission (IURC). On September
12, 1997, the IURC approved the gas supply agreements between Indiana
Gas and Citizens Gas and ProLiance Energy as being in the public
interest.
On October 8, 1998, the Indiana Court of Appeal issued a decision which
reversed and remanded the case to the IURC with instructions that the
gas supply agreements be disapproved. The basis for the decision is
that because such agreements provide for index based pricing of gas
commodity, they should have been the subject of an application for an
alternative regulatory plan under Indiana statutory law. The court held
that absent this type of application , the IURC exceeded its authority
in implementing what the court saw to be alternative regulatory
treatment.
Management believes the decision incorrectly applies the statute and has
decided to petition for transfer of the case to the Indiana Supreme
Court. Regardless of the outcome of that appeal, management takes note
of the fact that the Court of Appeals has not challenged the IURC
findings that the agreements provide significant economic value to
customers and are in the public interest. While these decisions are
pending final resolution, Indiana Gas will continue to utilize ProLiance
for its gas supply.
At September 30, 1998, Indiana Energy has reserved approximately
$1.1 million of ProLiance earnings after tax. Total after-tax
ProLiance earnings to date approximate $10.1 million. This
amount includes earnings from all of ProLiance's business
activities, and therefore is believed to be a very conservative
estimate of the upper risk limit. Management believes the above
issues may be resolved near the levels that are already being
reserved and therefore, does not anticipate changing its reserve
levels for ProLiance earnings. However, no assurance of this
outcome can be provided.
Affiliates of Indiana Energy, Inc., the holding company for Indiana
Gas and Citizens Gas & Coke Utility, jointly own ProLiance Energy, an
energy marketing firm. ProLiance Energy provides its natural gas
customer base of more than 400 utility, municipal, industrial and
commercial customers with competitive prices, reliable service and
economic supply planning. Indiana Gas serves nearly 490,000 customers
in 290 Indiana communities. Citizens Gas serves 250,000 industrial,
commercial and residential customers in Indianapolis (Marion County).
This release includes subjects pertaining to a number of issues that
may contain forward-looking statements. Actual results could differ
materially from those that will be projected. Additional detailed
information concerning a number of factors that could cause actual
results to differ materially from the information that is provided is
available in the Indiana Energy, Inc. report Form 8-K filed with the
Securities and Exchange Commission on August 11, 1997.
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 9, 1998 /s/Niel C. Ellerbrook
Niel C. Ellerbrook
President and Chief Operating Officer
Dated October 9, 1998 /s/Jerome A. Benkert
Jerome A. Benkert
Vice President and Controller
