IURC News Release

Indiana Utility Regulatory Commission

302 West Washington Street, Room 306

Indianapolis Indiana 46204

317.232.2297 office

317.233.1982 fax

www.state.in.us/iurc

Contact: Mary Beth Fisher

For Immediate Release

July 24, 2002

IURC APPROVES PROLIANCE SETTLEMENT

Today the Indiana Utility Regulatory Commission approved a settlement agreement supported by Citizens Gas & Coke Utility (Citizens), Vectren Energy Delivery of Indiana, Inc. (Vectren), the Indiana Office of Utility Consumer Counselor (OUCC), the Citizens Action Coalition (CAC), and a group of industrial customers, which ends the Commission’s investigation into the purchasing practices of Indiana Gas and Citizens Gas through their affiliate, ProLiance.

In Cause Nos. 37394GC50S1, 37399GC50S1 and 42233, the Commissioners agree that the settlement preserves the benefits of the supply alliance for customers and the utilities, and is in the customer’s best interest.

This settlement resolves issues left open from the 1997 order which approved the creation of ProLiance, which is a joint-venture between Citizens Gas and Indiana Gas (Vectren). The alliance was designed to reduce gas costs to utilities and their customers. It also operates as a competitive natural gas marketer to large commercial and industrial customers in Indiana and throughout the Midwest .

Listed below is an overview of key components of the settlement:

• Provides $21-million, less legal fees, for payments to customers of Indiana Gas and Citizens.

• Allows the companies to continue to purchase gas from ProLiance until their contracts expire in March 2007. At that time there will be a global RFP (Request For Proposal) process, and while ProLiance may participate in the bidding, there will be no favoritism to ProLiance.

• Unused pipeline capacity will be sold on the market and the proceeds split between the customers and the utilities.

• Makes final all Gas Cost Adjustment Orders for Citizens and Indiana Gas from GCA50 to GCA 74.

• Makes clear that the utilities will continue to present and support the reasonableness of any costs incurred through the IURC’s GCA review process.

• Establishes a price benchmark for gas purchases where the utilities and customers share the risk and reward for prices that either exceed or beat the benchmark.

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