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Vectren inks deal to keep gas prices steady for years

Vectren customers in Bartholomew and other nearby counties can expect natural gas prices to remain steady for the next several years.

Vectren spokesman Chase Kelley said that continued favorable natural gas market pricing conditions have allowed the utility to secure additional long-term, fixed price contracts with a national supplier to lock in a portion of its natural gas supply through December of 2023. One contract is for five years, the other is 10 years. Kelley adds that the two contracts complement similar agreements inked last summer. With the execution of these recent contracts, he says the utility has secured about 20 percent of its annual supply purchases with very favorable pricing under these four longer-term agreements.

Under the terms of the recently-signed 10-year contract, Vectren will purchase 1.8 million dekatherms annually at a fixed price of $4.34 per dekatherm beginning in April and continuing through December 2023. Vectren will purchase 3 million dekatherms annually under the terms of the most recent five year deal at a fixed price of $4 per dekatherm from April through March 2019. Kelley says that by comparison to these long-term prices, market prices over the next 12 months are higher and currently average about $4.50 per dekatherm.

"Although we've seen some market volatility with short-term gas prices this winter due to the bitter cold weather, the long-term price of natural gas remains relatively stable and low as evidenced by these contracts," said Scott Albertson, Vectren's vice president of regulatory affairs and gas supply. "As a result of the tremendous increase in domestic gas supply due to the development of shale gas production, Vectren was again able to further secure long-term gas supply as part of the utility's long-standing portfolio approach to natural gas acquisition and provide additional price certainty for our customers. Such opportunities simply did not exist prior to the development of domestic shale gas production over the last several years."

Kelley added that Vectren does not profit from the sale of natural gas. He says customers pay for actual commodity costs on a dollar-for-dollar basis.

Vectren Energy Delivery of Indiana-North serves 570,000 gas customers in all or a portion of Adams, Allen, Bartholomew, Blackford, Boone, Clark, Clay, Clinton, Decatur, Delaware, Fayette, Floyd, Fountain, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Huntington, Jackson, Jay, Jefferson, Johnson, Lawrence, Madison, Martin, Miami, Monroe, Montgomery, Morgan, Orange, Owen, Parke, Putnam, Randolph, Rush, Shelby, Tippecanoe, Tipton, Vermillion, Vigo, Wabash, Warren, Wayne, Wells and White counties.

Last Updated: Thursday, March 27, 2014 5:08:46 PM

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