Vectren Energy Delivery of Ohio (Vectren) received Public Utilities Commission of Ohio approval in April 2008 to move to a more market-based price structure for its natural gas charges, which is called Standard Sales Offer (SSO) service. Through Vectren's SSO service, Vectren changed the way it buys gas for its customers who have not elected to purchase gas from an alternate natural gas supplier through the Choice program. Effective Oct. 1, 2008, Vectren purchases gas through third-party suppliers who competed in an auction process for the right to provide the natural gas commodity to these sales customers.

The auction, which was held on Aug. 19, 2008, resulted in a retail price adjustment of $2.35 per thousand cubic feet (Mcf) or $0.235 per one hundred cubic feet (CCF) and became effective Oct. 1, 2008, through March 31, 2010. This amount is added to the New York Mercantile Exchange (NYMEX) month-end settlement price for natural gas to form the total SSO gas cost charge. Because the majority of the SSO charge reflects the NYMEX-based market price, the monthly price will change because the natural gas commodity is bought and sold in an open market, and, as such, its price can vary with changes in supply and demand.

As of Oct. 1, 2008, the portion of your bill based on the new SSO gas cost charge, which was renamed "Gas Cost Charge (SSO)," replaced the former "Gas Cost Recovery Charges" line item. Vectren's charges for delivery service still appear under the line item entitled "Distribution and Service Charges." Keep in mind - As a Vectren customer, you can decide who supplies your natural gas. You can either remain with Vectren Energy Delivery of Ohio or choose an alternate gas supplier through the natural gas Choice program. Choice suppliers, who are certified by the Public Utilities Commission of Ohio, can offer pricing options that may be appealing to you this heating season. So take time to review the gas costs charges on your Vectren utility bills, and compare those costs to the pricing options available from Choice suppliers.

Regardless of your choice of natural gas supplier, Vectren will continue to provide the same high quality natural gas delivery, pipeline maintenance and customer service you've come to expect.

As a Vectren customer, you can decide who supplies your natural gas, either Vectren or an alternative gas supplier through the Choice program.

This customer choice program is designed to encourage more natural gas suppliers to enter the market and provide for a more open competitive market with a variety of pricing options that could save consumers money.

Frequently Asked Questions
What can competition do for the consumer?
What should you as a Vectren customer know?
How does the Choice program relate to the bill?
How does this relate to the market price?
If I choose a gas supplier, what will Vectren continue to do?

What can competition do for the consumer?
A natural gas market open for retail competition brings more suppliers to the energy marketplace. In turn, these competing suppliers offer more pricing options (sales offers) that allow you to "comparison shop" for energy the way you do for other products and services.

What should you as a Vectren customer know?
Vectren is changing the way it purchases gas and now will be purchasing it using third-party suppliers through, what is known as, a standard sales offer.

Vectren's standard sales offer price reflects the national market price and changes monthly.

Vectren will continue to deliver the gas to the customer.

You are encouraged to visit the Public Utilities Commission of Ohio (PUCO) website and use the Apples to Apples comparison chart to see what options the natural gas suppliers are offering.

How does Ohio Choice relate to the bill?
There are two key parts to the Ohio customer bill:

1)	The cost to deliver the natural gas to the customer's home or business, which is listed as "Distribution and Service Charges."
2)	The cost of the natural gas commodity, which is the standard sales offer price (this charge not only includes the market-price of the gas but also includes pipeline transportation fees and other costs to bring the gas into Vectren's system).

How does this relate to the market price?
Natural gas, the commodity, is traded on the open market: the New York Mercantile Exchange (NYMEX), in which the gas price fluctuates, like stock prices fluctuate on the stock market.

As of October 1, 2008, customer gas costs are based on the monthly NYMEX market price plus a retail price adjustment, or what is called an "adder," that includes gas suppliers' costs to transport the gas into Vectren's system.

If I choose a gas supplier, what will Vectren continue to do?

• Vectren will continue to distribute gas supply to customers
• Vectren will continue to charge the approved rates for distribution service
• Only the commodity portion of customers' bills are impacted (only if they are currently not participating in the Choice Program)
• The bill line item that represents the monthly gas costs will change to "Gas Cost Charge"
• Vectren will still read meters and send bills
• You can still contact Vectren if:
• You have questions about your service
• Emergencies arise
• Vectren will continue to coordinate and to oversee the responsibility of ensuring reliable gas supply delivery from qualified gas suppliers to our service territory.
• Vectren will continue to provide safe and reliable gas distribution service.