Vectren Joins National Effort in Renewed Commitment to Energy Efficiency

EVANSVILLE, Ind., Aug. 1, 2006 -- In an effort to address rising energy costs, Vectren joined more than 50 leading organizations across the country yesterday in adopting a new National Action Plan for Energy Efficiency to meet the nation's growing demand for energy in our homes, buildings and industries. This comprehensive plan, delivered through electric and gas utilities, could help defer the need for 40 new 500 Megawatt-power plants, avoid the greenhouse gas emissions equivalent to those of over 35 million vehicles, lower the costs of air pollution controls and reduce prices for natural gas.

Including utilities, their regulators, and energy users, the consortium has outlined recommendations including:

  *  making energy efficiency a high priority resource;
  *  treating energy efficiency like coal, natural gas, nuclear and other
     energy resources in energy plans;
  *  promoting long-term, stable program funding to deliver cost-effective
     efficiency to consumers;
  *  broadly communicating the benefits of efficiency; and
  *  aligning utility incentives and ratemaking processes to promote
     investments in efficiency.

These recommendations build upon best practices from successful efficiency programs, already operating in many areas, to remove barriers that have limited utilities and customers from pursuing cost-effective energy efficiency resources. The National Action Plan for Energy Efficiency can be viewed at http://www.epa.gov/cleanenergy/eeactionplan.htm .

"While Vectren has been very proactive in helping address these critical needs on a regional basis, it's very positive news to see commitment to energy efficiency launched on a national level," said Vectren Chairman, President and CEO Niel Ellerbrook. "Having witnessed a record high in national electric demand in July and record high natural gas prices last October, the need for a national approach to solving our energy crisis is long overdue. The solution will be twofold; it will require increasing access to known supply and significantly increasing the efficient usage of energy, as this task force is recommending."

The U.S. Environmental Protection Agency and the Department of Energy designated a national Leadership Group, which then developed the recommendations outlined in the National Action Plan for Energy Efficiency. The Plan was released yesterday at the NARUC Summer Meeting in San Francisco, California. The Plan was developed by a Leadership Group that includes 23 electric and gas utilities, seven state utility regulators and more than 30 other organizations.

U.S. consumers could save hundreds of billions of dollars on their utility bills over the next 10 to 15 years through greater energy efficiency. Methods to enhance energy efficiency continue to be available at lower costs than new supply for the foreseeable future. Savings in direct use of electricity and natural gas will help control load growth and offer substantial economic and environmental benefits.

"This national effort is the only way to help ease the pressures on energy supplies and prices," Ellerbrook added. "With energy providers now spearheading this initiative as a national group, I'm optimistic we can better address and hopefully overcome this growing crisis."

The National Action Plan brings together leading energy sector organizations representing different stakeholder perspectives to determine how best to promote greater investment in energy efficiency by the customers of electric and gas utilities -- covering most of the energy used in American homes, buildings and industries or about 60 percent of the natural gas and electricity used nation-wide. This collaborative approach is essential as greater investment in energy efficiency requires a concerted effort by customers, utilities, regulators, states and other stakeholders. The recommendations appear in full in the Action Plan Executive Summary which is available at http://www.epa.gov/cleanenergy .

About Vectren

Vectren Corporation is an energy holding company headquartered in Evansville, Ind. Vectren's energy delivery subsidiaries provide gas and/or electricity to more than one million customers in adjoining service territories that cover nearly two-thirds of Indiana and west central Ohio. Vectren's nonutility subsidiaries and affiliates currently offer energy- related products and services to customers throughout the Midwest and Southeast. These include gas marketing and related services; coal production and sales; and energy infrastructure services. To learn more about Vectren, visit http://www.vectren.com/ .