EVANSVILLE -- A sale process involving Vectren would likely have no effect on your electric and gas bills, but potential impact on the company's employment and local presence is less clear, experts said.
Bloomberg in August cited anonymous sources in reporting the Evansville-based utility was considering options, including a potential sale.
The report said Vectren had been approached by “at least one potential buyer,” but the company had not formally put itself up for sale and could decide to remain independent.
Another financial industry publication, S&P Global, reported Feb. 20 that Vectren has “launched a sale process following months of reported takeover interest.”
The item stated 11 power-generation facilities Vectren exclusively owns have a value of $523 million, based on S&P Global analysis. That excludes four other plants Vectren has a stake in, such as one in Warrick County that is co-owned by Alcoa.
Reports of Vectren’s sale process first surfaced Feb. 6, according to S&P Global. Since then, the company’s stock has traded just above $60, off a 52 week high of $69.50. Vectren officials have declined to comment on the marketplace speculation, citing corporate policy.
Vectren provides electric service to about 144,000 customers in Southwest Indiana and gas service to just over 1 million customers in Indiana and Ohio.
Vectren employs about 1,800 people, and more than 5,600 when including its nonutility companies, which provide various infrastructure and energy services.
The company supports numerous nonprofit agencies and community events throughout its footprint.
John Rupp, an adjunct professor in the Indiana University School of Public and Environmental Affairs, noted Vectren last year started a major upgrade to its electrical grid – about $12 million worth of customer-financed improvements.
“That would certainly add value to the company, looking to the future,” Rupp said, but he added that such upgrades often are the cost of doing business for utilities and do not necessarily signal a sale.
Rupp said a sale or a merger with another nearby utility might be a way for the company to eliminate some duplication, but if the partner entity is not local, duplication is less likely.
Nationally, the future demand for electricity and gas is expected to be flat, and more diversification in energy sources is expected, according to the Energy Information Administration, part of the U.S. Department of Energy.
Vectren’s recent actions have reflected those trends.
Vectren in recent days released plans to build a $900 million, 800-900 megawatt natural gas plant in Posey County, along with a 50-megawatt solar field at an undetermined location. Some of the company’s coal-fired facilities are to be retired by 2023.
Any merger or sale involving a utility company is unique, and “you have to look at them on a case-by-case basis. We can’t make any blanket statements on whether they are good, bad or both,” said Anthony Swinger, Indiana Office of Utility Consumer Counselor director of external affairs.
If a utility holding company in Indiana buys another or if they decided to merge, no approval by the Indiana Utility Regulatory Commission is needed, but if assets are transferred among utilities, the IURC does become involved, Swinger said.
“Obviously if there is a merger taking place we would want the acquiring entity to be financially stable, and we would hope consumers would not see any deterioration in quality or reliability,” Swinger said. “If that happened, the IURC would have authority to fully investigate that.”
He added, “It’s important to keep in mind that if you have a sale or merger, it does not automatically impact rates and charges. Those that were in effect before the merger would remain in effect after, and any changes would need IURC approval.”
John Blair, with of the local environmental group Valley Watch, closely monitors Vectren’s activities. He and other environmental advocates have criticized the size and scope of the natural gas plant Vectren is seeking IURC approval to build.
“Their electric side is so profitable that I can’t imagine it’s not viable for sale,” Blair said of Vectren. “They keep investing untold money into everything, and they have the IURC completely on their side. Anything they ask for, they get, practically. It’s as if the ratepayers are all rich.”