Why Implement a Program? Indiana, unlike other states, is without a safety net program Indiana relies solely on Federal LIHEAP funding which has not responded to rising prices, and extreme temperature changes According to census information more Indiana low- income customers are struggling with “ability to pay” –Last year Indiana had the 3 rd highest poverty increase nationally (14% increase) This program is a proactive solution when customers are struggling at conclusion of winter moratorium

Program Objectives Further assist existing low income customers Easy to administer with EAP application process Address affordability by lowering monthly bills based upon income Increase weatherization funding Encourages conservation Program Partners Vectren Energy Delivery Citizens Gas FSSA Office of Utility Consumer Counselor Manufacturing and Health Providing Customers Citizens Action Coalition

Program Details 2 year pilot beginning January ‘05 Benefits EAP approved customers at or below 125% of poverty 9%, 18% or 24% discount for Citizens Gas customers based on EAP benefit matrix 15%, 26% or 32% discount for Vectren Energy customers based on EAP benefit matrix Crisis and other assistance applied in addition to the discount

Universal Service Program Benefit Chart Matrix Points Citizens Gas Discount Vectren Discount %15% %26% %32%

Estimated Households to be Assisted by USP Citizens Avg Bill Reduction Households Tier #1 9% 3,682 Tier #2 18% 9,555 Tier #3 24% 2,765 Vectren Avg Bill Reduction Households Tier #1 15% 4,606 Tier #2 26% 15,549 Tier #3 32% 3,319

Citizens Gas Calculation of Customer Benefits Example of Less EAPLess USP % Total USP Average Annual Bill Benefit Discount Benefit Annual Bill Tier #1 $1,000 $171 $ 90 (9%) $261 $739 Tier #2 $1,000 $210 $ 180 (18%) $390 $610 Tier #3 $1,000 $245 $ 240 (24%) $485 $515  Average Annual bill is only an example  Other assistance is applied in addition to EAP and USP benefits

Vectren Calculation of Customer Benefits Example of Less EAP Less USP % Total USP Average Annual Bill Benefit Discount Benefit Annual Bill Tier #1 $1,000 $171 $ 150 (15%) $321 $679 Tier #2 $1,000 $210 $ 260 (26%) $470 $530 Tier #3 $1,000 $245 $ 320 (32%) $565 $435  Average Annual bill is only an example.  Other assistance is applied in addition to EAP and USP benefits

Citizens Gas USP/EAP Program Year 1 $ 4.5 million in EAP and USP assistance provided from 11/04 through 09/28/ LIHEAP program enrollment comparable to prior year –14,456 customers approved for EAP USP provided benefits in the amount of $1.3 million YTD (projected year end benefit of $2.1 million)

Citizens Gas – USP Funded Weatherization $500,000 for each program year Low-income customers - LIHEAP guidelines –Both home owners and rental properties –Households with gas consumption greater than 120% average annual gas usage Community Action of Greater Indianapolis (CAGI) contracts the weatherization work Targeting 175 Homes –100 homes currently in all stages of the process (i.e. identification; audit; in progress; or completed) Conservation and weatherization education session conducted by Indiana Community Action Association (INCAA)

Citizens Gas Early Results 100 homes in various stages of weatherization work 71% of EAP customers still on service with an average bill of $52, comparable to non USP customers. Comparative data for heating season is not available

Vectren USP/EAP Program Year 1 $ 10,059,019 in EAP and USP assistance provided from 11/04 through 9/ LIHEAP program enrollment has increased to prior year –24,200 customers approved for EAP USP provided benefits in the amount of $3.5 million YTD (projected year end benefit of $5.3 million)

Vectren – USP Funded Weatherization Approximately 1,395 Vectren customers were weatherized using federal and state funding last year. $200,000 from the USP fund will aid approximately 75 homes identified as candidates for weatherization in INCAA coordinates program funding and data collection for participating community action agencies throughout the state. Criteria used to identify weatherization candidates Consumed 30% more energy than the average customer Customer owns and resides in the dwelling Received LIHEAP assistance in the previous year Income within 125% of federal poverty guidelines

Vectren’s Early Results 25 homes in various stages of weatherization work 81% of EAP customers still on service Comparative data for heating season is not available

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