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A company to watch
A Star editorial
April 16, 2000
The key to winning in chess is to have your pieces correctly positioned when the decisive
moment comes. That also is the strategy being employed by more and more of Indiana's
regulated utility companies.
They are trying to place themselves in positions to best take advantage of the dramatic changes coming with the deregulation of utility services, from telephone and cable television to electricity and natural gas.
That is what's behind the just-completed merger of the Indiana Gas Co. with the
Evansville-based Southern Indiana Gas and Electric Co., commonly known as SIGECO. The new company, known as Vectren Corp., bears watching. It plans to do a lot more than pump gas.
The merger combines the gas company's central Indiana service area with SIGECO's
territory in the southwest corner of the state, giving it access to 660,000 Hoosier customers or about one-third of Indiana.
Niel Ellerbrook, who headed Indiana Gas, is chairman and chief executive officer of
Vectren, and Andrew Goebel, CEO of SIGECO, will be president and chief operating officer.
SIGECO not only provides electricity and gas to customers in its service area, but it is
also nearing completion on an $80 million digital fiber optic network in Evansville.
This new system is able to serve 80,000 customers with bundled digital services,
including local and long-distance telephone, truly high-speed Internet and up to 250
channels of cable television, all through one wire. And it comes at a combined price
significantly discounted over buying the services separately.
Over 10,000 subscribers have already been hooked up and 2,000 more are added each
month. Even families without a home computer are signing up to get the cable TV
and telephone service.
The significance of this is that Vectren is proving it can provide viable competition and
choice for cable and phone service as well as gas and electricity. This may be the wave of the future for all of Indiana's major investor-owned utilities.
Even a cursory reading of the tea leaves suggests Vectren will be looking to expand
these services into the much larger Indianapolis area at some point.
At least three other companies -- Ameritech, Comcast and Digital Access -- are in the
beginning stages of providing packages of bundled digital services in the Indianapolis
market. So the race to serve Indianapolis could become very competitive, indeed.
Just as the Internet is converging with traditional telephone and cable television
services, so too will the energy market converge in the future. Natural gas could well
become the fuel of the future for decentralized electricity production. With Vectren having
control of the gas pipelines in one-third of the state, it will be a major player no matter what direction this market takes.
No one knows where all this is going in the long term. Some companies joining this fray
may succeed spectacularly, while others will fail. It's clear that Hoosiers stand to benefit
from the increased choice and competition.
© 2000 Indiana Newspapers Inc. AP materials © 2000 Associated Press. All rights reserved.
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