Although the winter heating season is more than four months away, Vectren Energy Delivery of Ohio (Vectren) is already undertaking proactive steps to encourage customers to prepare now given the natural gas commodities market for the 2008-2009 winter heating season is pointing to much higher prices than last winter.

Year-round demand on natural gas, spurred from an increase in the use of natural gas to produce electricity, continues to force prices higher. In fact, the prior winter heating season saw market commodity prices that averaged about $8 per dekatherm, and the forecasted 2008-2009 heating season has prices hovering well above $12, according to the New York Mercantile Exchange monthly settlement futures prices. Because the cost of natural gas is passed on to the customer on a dollar-for-dollar basis, customers will be faced with these increased costs in the coming months.

Vectren will issue its winter bill projections, likely in early fall, to help customers better understand what financial impact these higher prices will have on their total bills given gas costs make up around 75 to 80 percent of the bill during the heating season.

“We’re urging customers to be proactive and prepare now for what will likely be higher than normal bills later this year given rising gas costs,” said Doug Petitt, vice president of marketing and conservation. “There are ways to lessen the impact of these costs, and we want to ensure customers take advantage of Vectren payment options and conservation resources to do so. In addition, we are advising customers to compare prices and consider selecting a natural gas supplier.”

To help manage and potentially reduce bills, Vectren is encouraging customers to consider the following solutions:

Enroll in Budget Bill: Under this billing plan, a customer’s estimated costs for a year of gas service are spread out in equal monthly bill amounts for the year to help budget accordingly. Typically, amounts are adjusted annually or bi-annually for actual costs and the customer’s credit or debit amount due rolls into the next calculation. Customers may enroll for free at www.vectren.com or by calling 1-800-227-1376. Furthermore, customers who remain on the payment plan or enroll by Nov. 1, 2008, will be entered to win a home energy efficiency makeover — up to a $5,000 value.

Take steps to improve the energy efficiency of your home or business: Vectren offers a number of free and low-cost energy efficiency tips and access to an online energy audit to help customers finds ways to conserve. Visit www.vectren.com or call 1-800-227-1376 to learn more.

Consider choosing a natural gas supplier: Through Vectren’s natural gas Choice program, customers can choose a natural gas supplier that’s right for them. Competing suppliers offer more pricing options for consumers allowing them to comparison shop for energy the way they do for other products and services. Visit the Public Utilities Commission of Ohio Web (PUCO) site, www.puco.ohio.gov, for up-to-date prices or call 1-800-686-7826.

Sign up for the Home Energy Assistance Program (HEAP): State and federal utility assistance dollars are available for income-eligible customers. Those that fall within 175 percent of federal poverty guidelines should visit their local community action agency to sign up for HEAP or contact the Ohio Department of Development at 1-800-282-0880.

See if you qualify for the Percentage of Income Payment Plan (PIPP): PIPP calls for a qualified household to pay 10 percent of its monthly income for gas service throughout the year. To be eligible for the PIPP program, a customer must receive his or her primary or secondary heat source from a company regulated by the PUCO, must have a total household income which is at or below 150 percent of the federal poverty level, and must apply for all energy assistance programs for which he or she is eligible. Contact the Ohio Department of Development at 1-800-282-0880 for more information.

Contact your legislators to call for national relief: Governmental action is need at the national level to encourage a sound energy policy that helps address our country’s energy crisis. Relief to sustained high gas costs can be achieved if more access is given to domestic reserves and less dependence is placed on natural gas to meet electric generation needs. Visit www.senate.gov to locate your legislators and voice your opinion.

“Unfortunately, natural gas is seen as the only short-term solution to meet our country’s growing energy crisis,” added Petitt. “In fact, we’ve reached a point where more gas is used to produce electricity than to heat residential customers’ homes. Although it’s still too early to tell exactly how high prices may be later this year, forecasted prices continue to creep higher, and a hot summer or hurricane activity could lead to even more upward pressure.”

Natural gas is a commodity bought and sold in a national deregulated market and prices fluctuate daily due to supply and demand pressures. Vectren purchases natural gas on behalf of its customers who have not already chosen a third-party natural gas supplier and then passes those costs on to customers through the gas cost recovery process, which is listed on the Vectren bill as “Gas Cost Recovery Charges.” Vectren is not allowed to profit from the purchase and sale of natural gas. Only gas costs approved by the Public Utilities Commission of Ohio are recovered from customers on a dollar-for-dollar basis.

Vectren Corporation (NYSE: VVC) 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 www.vectren.com.