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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)

|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended March 31, 2004

OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________


Commission file number: 1-16739

VECTREN UTILITY HOLDINGS, INC.

- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)


INDIANA 35-2104850
- --------------------------------------------- --------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)



20 N.W. 4th Street, Evansville, Indiana, 47708
------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)

812-491-4000
-------------------------------------------------------
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No __

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes __ No |X|

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


Common Stock - Without Par Value 10 April 30, 2004
------------------------------- -- --------------
Class Number of Shares Date




Table of Contents

Item Page
Number Number
PART I. FINANCIAL INFORMATION
1 Financial Statements (Unaudited)

Vectren Utility Holdings, Inc. and Subsidiary Companies

Consolidated Condensed Balance Sheets 1-2
Consolidated Condensed Statements of Income 3
Consolidated Condensed Statements of Cash Flows 4
Notes to Unaudited Consolidated Condensed Financial Statements 5
2 Management's Discussion and Analysis of Results of Operations 15
and Financial Condition

3 Quantitative and Qualitative Disclosures About Market Risk 24
4 Controls and Procedures 24

PART II. OTHER INFORMATION

1 Legal Proceedings 25
6 Exhibits and Reports on Form 8-K 25
Signatures 26

Access to Information
Vectren Corporation makes available all SEC filings and recent annual reports
free of charge, including those of its wholly owned subsidiaries, through its
website at www.vectren.com, or by request, directed to Investor Relations at the
mailing address, phone number, or email address that follows:

Mailing Address: Phone Number: Investor Relations Contact:
P.O. Box 209 (812) 491-4000 Steven M. Schein
Evansville, Indiana Vice President, Investor Relations
47702-0209 sschein@vectren.com


Definitions

AFUDC: allowance for funds used during MMBTU: millions of British thermal
construction units
APB: Accounting Principles Board MW: megawatts

EITF: Emerging Issues Task Force MWh/GWh: megawatt hours/millions of
megawatt hours (gigawatt hours)
FASB: Financial Accounting Standards NOx: nitrogen oxide
Board
FERC: Federal Energy Regulatory OUCC: Indiana Office of the Utility
Commission Consumer Counselor
IDEM: Indiana Department of PUCO: Public Utilities Commission of
Environmental Management Ohio
IURC: Indiana Utility Regulatory SFAS: Statement of Financial
Commission Accounting Standards
MCF/BCF: millions/billions of USEPA: United States Environmental
cubic feet Protection Agency
MDth/MMDth: thousands/millions Throughput: combined gas sales and
of dekatherms gas transportation volumes





PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited - In millions)

March 31, December 31,
- -------------------------------------------------------------------------------
2004 2003
- -------------------------------------------------------------------------------
ASSETS

Current Assets
Cash & cash equivalents $ 12.5 $ 8.1
Accounts receivable - less reserves
of $2.3 & $3.1, respectively 153.0 114.0
Receivables due from other Vectren companies 7.5 1.7
Accrued unbilled revenues 96.1 128.7
Inventories 39.2 55.1
Recoverable fuel & natural gas costs 8.9 20.3
Prepayments & other current assets 21.0 131.3
- -------------------------------------------------------------------------------
Total current assets 338.2 459.2
- -------------------------------------------------------------------------------

Utility Plant
Original cost 3,280.9 3,250.7
Less: accumulated depreciation & amortization 1,258.2 1,247.0
- -------------------------------------------------------------------------------
Net utility plant 2,022.7 2,003.7
- -------------------------------------------------------------------------------

Investments in unconsolidated affiliates 2.0 1.8
Other investments 20.8 20.6
Non-utility property - net 141.2 141.3
Goodwill - net 205.0 205.0
Regulatory assets 84.8 89.6
Other assets 3.9 3.9
- -------------------------------------------------------------------------------
TOTAL ASSETS $ 2,818.6 $ 2,925.1
===============================================================================


The accompanying notes are an integral part of these consolidated condensed
financial statements.






VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited - In millions)


March 31, December 31,
- ------------------------------------------------------------------------------
2004 2003
- ------------------------------------------------------------------------------
LIABILITIES & SHAREHOLDER'S EQUITY

Current Liabilities
Accounts payable $ 43.4 $ 63.0
Accounts payable to affiliated companies 48.4 80.3
Payables to other Vectren companies 8.5 13.3
Accrued liabilities 160.5 93.9
Short-term borrowings 40.0 185.2
Current maturities of long-term debt 15.0 15.0
Long-term debt subject to tender 13.5 13.5
- ------------------------------------------------------------------------------
Total current liabilities 329.3 464.2
- ------------------------------------------------------------------------------

Long-Term Debt - Net of Current Maturities &
Debt Subject to Tender 960.5 960.5

Deferred Income Taxes & Other Liabilities
Deferred income taxes 200.8 201.5
Regulatory liabilities & other removal costs 239.0 235.0
Deferred credits & other liabilities 83.0 83.9
- ------------------------------------------------------------------------------
Total deferred credits & other liabilities 522.8 520.4
- ------------------------------------------------------------------------------

Commitments & Contingencies (Notes 6 - 8)

Cumulative, Redeemable Preferred Stock
of a Subsidiary 0.1 0.2

Common Shareholder's Equity
Common stock (no par value) 591.2 589.8
Retained earnings 414.7 390.0
- ------------------------------------------------------------------------------
Total common shareholder's equity 1,005.9 979.8
- ------------------------------------------------------------------------------

TOTAL LIABILITIES & SHAREHOLDER'S EQUITY $ 2,818.6 $ 2,925.1
==============================================================================


The accompanying notes are an integral part of these consolidated condensed
financial statements.






VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited - In millions)

Three Months Ended March 31,
- ----------------------------------------------------------------------------
2004 2003
- ----------------------------------------------------------------------------
OPERATING REVENUES
Gas utility $ 505.1 $ 509.2
Electric utility 88.8 83.5
Other 0.3 0.2
- ----------------------------------------------------------------------------
Total operating revenues 594.2 592.9
- ----------------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas sold 365.6 364.8
Fuel for electric generation 22.9 20.8
Purchased electric energy 4.4 4.5
Other operating 60.1 56.6
Depreciation & amortization 29.6 28.8
Taxes other than income taxes 22.3 21.7
- ----------------------------------------------------------------------------
Total operating expenses 504.9 497.2
- ----------------------------------------------------------------------------
OPERATING INCOME 89.3 95.7

OTHER EXPENSE
Other income (expense) - net (0.1) (1.5)
Equity in earnings (losses) of
unconsolidated affiliates 0.2 (0.5)
- ----------------------------------------------------------------------------
Total other income (expense) 0.1 (2.0)
- ----------------------------------------------------------------------------
Interest expense 17.0 16.5
- ----------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 72.4 77.2
- ----------------------------------------------------------------------------
Income taxes 27.7 29.9
- ----------------------------------------------------------------------------
NET INCOME $ 44.7 $ 47.3
============================================================================



The accompanying notes are an integral part of these consolidated condensed
financial statements.






VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited - In millions)


Three Months Ended March 31,
- -------------------------------------------------------------------------------
2004 2003
- -------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 44.7 $ 47.3
Adjustments to reconcile net income to cash from
operating activities:
Depreciation & amortization 29.6 28.8
Deferred income taxes & investment tax credits (0.7) 5.1
Pension & postretirement periodic benefit cost 1.5 1.5
Equity in (earnings) losses of unconsolidated
affiliates (0.2) 0.5
Net unrealized gain on derivative instruments (2.8) (0.9)
Other non-cash charges - net 3.6 5.7
Changes in working capital accounts:
Accounts receivable, including to Vectren
companies & accrued unbilled revenue (16.1) 9.8
Inventories 15.9 17.8
Recoverable fuel & natural gas costs 11.4 10.2
Prepayments & other current assets 116.8 68.2
Accounts payable, including to Vectren
companies & affiliated companies (56.3) (121.5)
Accrued liabilities 65.5 57.2
Changes in noncurrent assets (0.2) (0.4)
Changes in noncurrent liabilities (1.8) (1.4)
- -------------------------------------------------------------------------------
Net cash flows from operating activities 210.9 127.9
- -------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from additional capital contribution 1.4 -
Requirements for:
Dividends to parent (20.0) (18.0)
Redemption of preferred stock of subsidiary (0.1) (0.1)
Retirement of long-term debt, including
premiums paid - (39.9)
Net change in short-term borrowings (145.2) (10.2)
- -------------------------------------------------------------------------------
Net cash flows from financing activities (163.9) (68.2)
- -------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from other investing activities - 0.1
Requirements for capital expenditures,
excluding AFUDC equity (42.6) (49.4)
- -------------------------------------------------------------------------------
Net cash flows from investing activities (42.6) (49.3)
- -------------------------------------------------------------------------------
Net increase in cash & cash equivalents 4.4 10.4
Cash & cash equivalents at beginning of period 8.1 10.5
- -------------------------------------------------------------------------------
Cash & cash equivalents at end of period $ 12.5 $ 20.9
===============================================================================


The accompanying notes are an integral part of these consolidated condensed
financial statements.





VECTREN UTILITY HOLDINGS, INC. AND SUBSIDIARY COMPANIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

1. Organization and Nature of Operations


Vectren Utility Holdings, Inc. (VUHI or the Company), an Indiana corporation,
serves as the intermediate holding company for Vectren Corporation's (Vectren)
three operating public utilities: Indiana Gas Company, Inc. (Indiana Gas or
Vectren North), Southern Indiana Gas and Electric Company (SIGECO or Vectren
South), and the Ohio operations. VUHI also has other assets that provide
information technology and other services to the three utilities. Vectren is an
energy and applied technology holding company headquartered in Evansville,
Indiana. Both Vectren and VUHI are exempt from registration pursuant to Section
3(a)(1) and 3(c) of the Public Utility Holding Company Act of 1935.

Indiana Gas provides natural gas distribution and transportation services to a
diversified customer base in 49 of Indiana's 92 counties. SIGECO provides
electric generation, transmission, and distribution services to 8 counties in
southwestern Indiana, including counties surrounding Evansville, and
participates in the wholesale power market. SIGECO also provides natural gas
distribution and transportation services to 10 counties in southwestern Indiana,
including counties surrounding Evansville. Indiana Gas and SIGECO generally do
business as Vectren Energy Delivery of Indiana, Inc. The Ohio operations, owned
as a tenancy in common by Vectren Energy Delivery of Ohio, Inc. (VEDO), a wholly
owned subsidiary, (53% ownership) and Indiana Gas (47% ownership), provide
natural gas distribution and transportation services to 17 counties in west
central Ohio, including counties surrounding Dayton.

2. Basis of Presentation

The interim consolidated condensed financial statements included in this report
have been prepared by the Company, without audit, as provided in the rules and
regulations of the Securities and Exchange Commission. Certain information and
note disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States
have been omitted as provided in such rules and regulations. The Company
believes that the information in this report reflects all adjustments necessary
to fairly state the results of the interim periods reported. These consolidated
condensed financial statements and related notes should be read in conjunction
with the Company's audited annual consolidated financial statements for the year
ended December 31, 2003, filed on Form 10-K. Because of the seasonal nature of
the Company's utility operations, the results shown on a quarterly basis are not
necessarily indicative of annual results.

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the statements
and the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.


3. Subsidiary Guarantor and Consolidating Information

The Company's three operating utility companies, SIGECO, Indiana Gas, and VEDO
are guarantors of VUHI's $351.0 million in short-term credit facilities, of
which $40.0 million is outstanding at March 31, 2004, and VUHI's $550.0 million
unsecured senior notes outstanding at March 31, 2004. The guarantees are full
and unconditional and joint and several, and VUHI has no subsidiaries other than
the subsidiary guarantors. However, VUHI does have operations other than those
of the subsidiary guarantors. Pursuant to Article 3-10 of Regulation S-X,
disclosure of the results of operations and balance sheets of the subsidiary
guarantors separate from the parent company's operations is required. Following
are consolidating financial statements including information on the combined
operations of the subsidiary guarantors separate from the other operations of
the parent company.

Consolidating Statement of Income for the three months ended March 31, 2004 (in
millions):



Subsidiary Parent
Guarantors Company Eliminations Consolidated
- ----------------------------------- ---------- ------- ------------ ------------

OPERATING REVENUES
Gas utility $ 505.1 $ - $ - $ 505.1
Electric utility 88.8 - - 88.8
Other - 9.4 (9.1) 0.3
- ---------------------------------------------------------------------------------------
Total operating revenues 593.9 9.4 (9.1) 594.2
- ---------------------------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas sold 365.6 - - 365.6
Fuel for electric generation 22.9 - - 22.9
Purchased electric energy 4.4 - - 4.4
Other operating 69.0 0.2 (9.1) 60.1
Depreciation & amortization 25.3 4.3 - 29.6
Taxes other than income taxes 22.0 0.3 - 22.3
- ---------------------------------------------------------------------------------------
Total operating expenses 509.2 4.8 (9.1) 504.9
- ---------------------------------------------------------------------------------------
OPERATING INCOME 84.7 4.6 - 89.3
OTHER INCOME (EXPENSE)
Equity in earnings of
consolidated companies - 43.1 (43.1) -
Equity in earnings of
unconsolidated affiliates - 0.2 - 0.2
Other income (expense) - net (0.6) 8.4 (7.9) (0.1)
- --------------------------------------------------------------------- ----------------
Total other income (expense) (0.6) 51.7 (51.0) 0.1
- ---------------------------------------------------------------------------------------
Interest expense 15.8 9.1 (7.9) 17.0
- --------------------------------------------------------------------- ----------------
INCOME BEFORE INCOME TAXES 68.3 47.2 (43.1) 72.4
- ---------------------------------------------------------------------------------------
Income taxes 25.2 2.5 - 27.7
- ---------------------------------------------------------------------------------------
NET INCOME $ 43.1 $ 44.7 $(43.1) $ 44.7
=======================================================================================




Consolidating Statement of Income for the three months ended March 31, 2003 (in
millions):




Subsidiary Parent
Guarantors Company Eliminations Consolidated
- -------------------------------------- ---------- ------- ------------ ------------

OPERATING REVENUES
Gas utility $ 509.2 $ - $ - $ 509.2
Electric utility 83.5 - - 83.5
Other - 6.6 (6.4) 0.2
- -------------------------------------------------------------------------------------------
Total operating revenues 592.7 6.6 (6.4) 592.9
- -------------------------------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas sold 364.8 - - 364.8
Fuel for electric generation 20.8 - - 20.8
Purchased electric energy 4.5 - - 4.5
Other operating 62.8 0.2 (6.4) 56.6
Depreciation & amortization 25.2 3.6 - 28.8
Taxes other than income taxes 21.4 0.3 - 21.7
- --------------------------------------------------------------------- --------------------
Total operating expenses 499.5 4.1 (6.4) 497.2
- -------------------------------------------------------------------------------------------
OPERATING INCOME 93.2 2.5 - 95.7
OTHER INCOME (EXPENSE)
Equity in earnings of consolidated
companies - 48.5 (48.5) -
Equity in losses of unconsolidated
affiliates - (0.5) - (0.5)
Other income (expense) - net 0.4 4.8 (6.7) (1.5)
- --------------------------------------------------------------------- --------------------
Total other income (expense) - net 0.4 52.8 (55.2) (2.0)
- -------------------------------------------------------------------------------------------
Interest expense 15.5 7.7 (6.7) 16.5
- --------------------------------------------------------------------- --------------------
INCOME BEFORE INCOME TAXES 78.1 47.6 (48.5) 77.2
- -------------------------------------------------------------------------------------------
Income taxes 29.6 0.3 - 29.9
- -------------------------------------------------------------------------------------------
NET INCOME $ 48.5 $ 47.3 $ (48.5) $ 47.3
===========================================================================================




Consolidating Statement of Cash Flows for the three months ended March 31, 2004
(in millions):



Subsidiary Parent
Guarantors Company Eliminations Consolidated
- -------------------------------------------- ---------- ------- ------------ ------------

NET CASH FLOWS FROM OPERATING ACTIVITIES $ 201.6 $ 9.3 $ - $ 210.9
- -------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from additional capital
contribution - 1.4 - 1.4

Requirements for:
Dividends to parent (20.0) (20.0) 20.0 (20.0)
Redemption of preferred stock
of subsidiary (0.1) - - (0.1)
Net change in short-term borrowings,
including to other Vectren companies (81.5) (87.9) 24.2 (145.2)
- -------------------------------------------------------------------------------------------------
Net cash flows from financing activities (101.6) (106.5) 44.2 (163.9)
- -------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from consolidated subsidiary
distributions - 20.0 (20.0) -

Requirements for:
Capital expenditures, excluding
AFUDC equity (39.0) (3.6) - (42.6)
Net change in notes receivable to other
Vectren companies (56.5) 80.7 (24.2) -
- -------------------------------------------------------------------------------------------------
Net cash flows from investing activities (95.5) 97.1 (44.2) (42.6)
- -------------------------------------------------------------------------------------------------
Net increase (decrease) in cash &
cash equivalents 4.5 (0.1) - 4.4
Cash & cash equivalents at beginning
of period 7.4 0.7 - 8.1
- -------------------------------------------------------------------------------------------------
Cash & cash equivalents at end of period $ 11.9 $ 0.6 $ - $ 12.5
=================================================================================================


Consolidating Statement of Cash Flows for the three months ended March 31, 2003
(in millions):



Subsidiary Parent
Guarantors Company Eliminations Consolidated
- ------------------------------------------ ---------- ------- ------------ ------------

NET CASH FLOWS FROM OPERATING ACTIVITIES $ 127.6 $ 0.3 $ - $ 127.9
- ----------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Requirements for:
Retirement of long-term debt,
including premiums paid (39.9) - - (39.9)
Dividends to parent (18.2) (18.0) 18.2 (18.0)
Redemption of preferred stock of
subsidiary (0.1) - - (0.1)
Net change in short-term borrowings,
including to other Vectren companies 9.0 4.8 (24.0) (10.2)
- ----------------------------------------------------------------------------------------------
Net cash flows from financing activities (49.2) (13.2) (5.8) (68.2)
- ----------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from:
Consolidated subsidiary distributions - 18.2 (18.2) -
Unconsolidated affiliate distributions - 0.1 - 0.1
Requirements for:
Capital expenditures, excluding
AFUDC equity (49.3) (0.1) - (49.4)
Net change in notes receivable to other
Vectren companies (18.3) (5.7) 24.0 -
- ----------------------------------------------------------------------------------------------
Net cash flows from investing activities (67.6) 12.5 5.8 (49.3)
- ----------------------------------------------------------------------------------------------
Net increase (decrease) in cash & cash
equivalents 10.8 (0.4) - 10.4
Cash & cash equivalents at beginning
of period 10.2 0.3 - 10.5
- ----------------------------------------------------------------------------------------------
Cash & cash equivalents at end of period $ 21.0 $ (0.1) $ - $ 20.9
==============================================================================================





Consolidating Balance Sheet as of March 31, 2004 (in millions):




ASSETS Subsidiary Parent
------ Guarantors Company Eliminations Consolidated
---------- ------- ------------ ------------

Current Assets
Cash & cash equivalents $ 11.9 $ 0.6 $ - $ 12.5
Accounts receivable - less reserves 152.9 0.1 - 153.0
Receivables due from other Vectren
companies 6.6 11.2 (10.3) 7.5
Accrued unbilled revenues 96.1 - - 96.1
Inventories 39.2 - - 39.2
Recoverable fuel & natural gas costs 8.9 - - 8.9
Prepayments & other current assets 22.7 (1.7) - 21.0
- ---------------------------------------------------------------------------------------------
Total current assets 338.3 10.2 (10.3) 338.2
- ---------------------------------------------------------------------------------------------
Utility Plant
Original cost 3,280.9 - - 3,280.9
Less: accumulated depreciation &
amortization 1,258.2 - - 1,258.2
- ---------------------------------------------------------------------------------------------
Net utility plant 2,022.7 - - 2,022.7
- ---------------------------------------------------------------------------------------------
Investments in consolidated subsidiaries - 979.3 (979.3) -
Notes receivable from consolidated
subsidiaries 56.5 542.7 (599.2) -
Investments in unconsolidated affiliates 0.2 1.8 - 2.0
Other investments 14.4 6.4 - 20.8
Non-utility property - net 5.5 135.7 - 141.2
Goodwill - net 205.0 - - 205.0
Regulatory assets 78.8 6.0 - 84.8
Other assets 3.9 - - 3.9
- ---------------------------------------------------------------------------------------------
TOTAL ASSETS $ 2,725.3 $ 1,682.1 $ (1,588.8) $ 2,818.6
=============================================================================================





LIABILITIES & SHAREHOLDER'S EQUITY Subsidiary Parent
---------------------------------- Guarantors Company Eliminations Consolidated
---------- ------- ------------ ------------

Current Liabilities
Accounts payable $ 41.0 $ 2.4 $ - $ 43.4
Accounts payable to affiliated companies 48.3 0.1 - 48.4
Payables to other Vectren companies 18.8 - (10.3) 8.5
Accrued liabilities 151.8 11.3 (2.6) 160.5
Short-term borrowings - 40.0 - 40.0
Short-term borrowings from
other Vectren companies 97.0 56.5 (153.5) -
Current maturities of long-term debt 15.0 - - 15.0
Long-term debt subject to tender 13.5 - - 13.5
- ---------------------------------------------------------------------------------------------
Total current liabilities 385.4 110.3 (166.4) 329.3
- ---------------------------------------------------------------------------------------------
Long-Term Debt
Long-term debt - net of current
maturities & debt subject to tender 412.9 547.6 - 960.5
Long-term debt due to VUHI 443.1 - (443.1) -
- ---------------------------------------------------------------------------------------------
Total long-term debt - net 856.0 547.6 (443.1) 960.5
- ---------------------------------------------------------------------------------------------
Deferred Income Taxes & Other Liabilities
Deferred income taxes 191.7 9.1 - 200.8
Regulatory liabilities & other removal
costs 233.0 6.0 - 239.0
Deferred credits & other liabilities 79.8 3.2 - 83.0
- ---------------------------------------------------------------------------------------------
Total deferred credits & other
liabilities 504.5 18.3 - 522.8
- ---------------------------------------------------------------------------------------------
Cumulative, Redeemable Preferred Stock of
a Subsidiary 0.1 - - 0.1
Common Shareholder's Equity
Common stock (no par value) 611.3 591.2 (611.3) 591.2
Retained earnings 368.0 414.7 (368.0) 414.7
- ---------------------------------------------------------------------------------------------
Total common shareholder's equity 979.3 1,005.9 (979.3) 1,005.9
- ---------------------------------------------------------------------------------------------

TOTAL LIABILITIES & SHAREHOLDER'S EQUITY $ 2,725.3 $ 1,682.1 $ (1,588.8) $ 2,818.6
=============================================================================================


Consolidating Balance Sheet as of December 31, 2003 (in millions):





ASSETS Subsidiary Parent
------ Guarantors Company Eliminations Consolidated
---------- ------- ------------ ------------

Current Assets
Cash & cash equivalents $ 7.4 $ 0.7 $ - $ 8.1
Accounts receivable - less reserves 113.6 0.4 - 114.0
Receivables due from other Vectren
companies 0.2 10.5 (9.0) 1.7
Accrued unbilled revenues 128.7 - - 128.7
Inventories 55.1 - - 55.1
Recoverable fuel & natural gas costs 20.3 - - 20.3
Prepayments & other current assets 138.2 0.9 (7.8) 131.3
- ---------------------------------------------------------------------------------------------
Total current assets 463.5 12.5 (16.8) 459.2
- ---------------------------------------------------------------------------------------------
Utility Plant
Original cost 3,250.7 - - 3,250.7
Less: accumulated depreciation
& amortization 1,247.0 - - 1,247.0
- ---------------------------------------------------------------------------------------------
Net utility plant 2,003.7 - - 2,003.7
- ---------------------------------------------------------------------------------------------
Investments in consolidated subsidiaries - 956.2 (956.2) -
Notes receivable from consolidated
subsidiaries - 623.4 (623.4) -
Investments in unconsolidated affiliates 0.2 1.6 - 1.8
Other investments 14.3 6.3 - 20.6
Non-utility property - net 5.6 135.7 - 141.3
Goodwill - net 205.0 - - 205.0
Regulatory assets 83.4 6.2 - 89.6
Other assets 3.9 - - 3.9
- ---------------------------------------------------------------------------------------------
TOTAL ASSETS $ 2,779.6 $ 1,741.9 $ (1,596.4) $ 2,925.1
=============================================================================================






LIABILITIES & SHAREHOLDER'S EQUITY Subsidiary Parent
---------------------------------- Guarantors Company Eliminations Consolidated
---------- ------- ------------ ------------

Current Liabilities
Accounts payable $ 57.5 $ 5.5 $ - $ 63.0
Accounts payable to affiliated companies 80.2 0.1 - 80.3
Payables to other Vectren companies 22.3 - (9.0) 13.3
Accrued liabilities 95.7 8.8 (10.6) 93.9
Short-term borrowings 0.8 184.4 - 185.2
Short-term borrowings from
other Vectren companies 177.6 - (177.6) -
Current maturities of long-term debt 15.0 - - 15.0
Long-term debt subject to tender 13.5 - - 13.5
- ---------------------------------------------------------------------------------------------
Total current liabilities 462.6 198.8 (197.2) 464.2
- ---------------------------------------------------------------------------------------------
Long-Term Debt
Long-term debt - net of current
maturities & debt subject to tender 412.9 547.6 - 960.5
Long-term debt due to VUHI 443.0 - (443.0) -
- ---------------------------------------------------------------------------------------------
Total long-term debt - net 855.9 547.6 (443.0) 960.5
- ---------------------------------------------------------------------------------------------
Deferred Income Taxes & Other Liabilities
Deferred income taxes 194.8 6.7 - 201.5
Regulatory liabilities & other removal
costs 228.8 6.2 - 235.0
Deferred credits & other liabilities 81.1 2.8 - 83.9
- ---------------------------------------------------------------------------------------------
Total deferred credits & other
liabilities 504.7 15.7 - 520.4
- ---------------------------------------------------------------------------------------------
Cumulative, Redeemable Preferred Stock of
a Subsidiary 0.2 - - 0.2
Common Shareholder's Equity
Common stock (no par value) 611.3 589.8 (611.3) 589.8
Retained earnings 344.9 390.0 (344.9) 390.0
- ---------------------------------------------------------------------------------------------
Total common shareholder's equity 956.2 979.8 (956.2) 979.8
- ---------------------------------------------------------------------------------------------

TOTAL LIABILITIES & SHAREHOLDER'S EQUITY $ 2,779.6 $ 1,741.9 $ (1,596.4) $ 2,925.1
=============================================================================================



4. Transactions with Other Vectren Companies

Support Services and Purchases
Vectren and certain subsidiaries of Vectren provide corporate and general and
administrative services to the Company including legal, finance, tax, risk
management, human resources, which includes charges for restricted stock
compensation and for pension and other postretirement benefits not directly
charged to subsidiaries. These costs have been allocated using various
allocation techniques, primarily number of employees, number of customers and/or
revenues. Allocations are based on cost. VUHI received corporate allocations
totaling $21.8 million and $17.7 million for the three months ended March 31,
2004 and 2003, respectively.

Vectren Fuels, Inc., a wholly owned subsidiary of Vectren, owns and operates
coal mines from which SIGECO purchases fuel used for electric generation.
Amounts paid for such purchases for the three months ended March 31, 2004 and
2003, totaled $18.8 million and $19.2 million, respectively.

Share-Based Incentive Plans
VUHI does not have share-based compensation plans separate from Vectren. An
insignificant number of VUHI's employees participate in Vectren's share-based
compensation plans.

5. Transactions with ProLiance Energy, LLC


ProLiance Energy, LLC (ProLiance), a nonregulated energy marketing affiliate of
Vectren and Citizens Gas and Coke Utility, provides natural gas and related
services to the Company. ProLiance's primary businesses include gas marketing,
gas portfolio optimization, and other portfolio and energy management services.
ProLiance's primary customers are utilities and other large end use customers.

Transactions with ProLiance
Purchases from ProLiance for resale and for injections into storage for the
three months ended March 31, 2004 and 2003, totaled $219.1 million and $261.4
million, respectively. Amounts owed to ProLiance at March 31, 2004, and December
31, 2003, for those purchases were $47.8 million and $79.9 million,
respectively, and are included in Accounts payable to affiliated companies.
Amounts charged by ProLiance for gas supply services are established by supply
agreements with each utility.


6. Commitments & Contingencies

The Company is party to various legal proceedings arising in the normal course
of business. In the opinion of management, there are no legal proceedings
pending against the Company that are likely to have a material adverse effect on
its financial position or results of operations. See Note 7 regarding
environmental matters.


7. Environmental Matters

NOx SIP Call Matter
The Company has initiated steps toward compliance with Indiana's State
Implementation Plan (SIP) of the Clean Air Act (the Act). These steps include
installing Selective Catalytic Reduction (SCR) systems at Culley Generating
Station Unit 3 (Culley), Warrick Generating Station Unit 4, and A.B. Brown
Generating Station Units 1 and 2. SCR systems reduce flue gas NOx emissions to
atmospheric nitrogen and water using ammonia in a chemical reaction. This
technology is known to currently be the most effective method of reducing
nitrogen oxide (NOx) emissions where high removal efficiencies are required.

The IURC has issued orders that approve:
>> the Company's project to achieve environmental compliance by investing
in clean coal technology;
>> a total capital cost investment for this project up to $244 million
(excluding AFUDC), subject to periodic review of the actual costs
incurred;
>> a mechanism whereby, prior to an electric base rate case, the Company
may recover through a rider that is updated every six months, an eight
percent return on its weighted capital costs for the project; and
>> ongoing recovery of operating costs, including depreciation and
purchased emission allowances through a rider mechanism, related to the
clean coal technology once the facility is placed into service.

Based on the level of system-wide emissions reductions required and the control
technology utilized to achieve the reductions, the current estimated clean coal
technology construction cost is consistent with amounts approved in the IURC's
orders and is expected to be expended through 2006. Through March 31, 2004,
$158.5 million has been expended. After the equipment is installed and
operational, related annual operating expenses, including depreciation expense,
are estimated to be between $24 million and $27 million. A portion of those
expenses began in October 2003 when the Culley SCR became operational. The 8
percent return on capital investment approximates the return authorized in the
Company's last electric rate case in 1995 and includes a return on equity.

The Company expects to achieve timely compliance as a result of the project.
Construction of the first SCR at Culley was placed into service in October 2003,
and construction of the Warrick 4 and Brown SCR's is proceeding on schedule to
achieve full compliance with the requirements of the NOx SIP Call. Installation
of SCR technology as planned is expected to reduce the Company's overall NOx
emissions to levels compliant with Indiana's NOx emissions budget allotted by
the USEPA. Therefore, the Company has recorded no accrual for potential
penalties that may result from noncompliance.

Manufactured Gas Plants
In the past, Indiana Gas, SIGECO, and others operated facilities for the
manufacture of gas. Given the availability of natural gas transported by
pipelines, these facilities have not been operated for many years. Under
currently applicable environmental laws and regulations, Indiana Gas and others
may now be required to take remedial action if certain byproducts are found
above the regulatory thresholds at these sites.

Indiana Gas has identified the existence, location, and certain general
characteristics of 26 gas manufacturing and storage sites for which it may have
some remedial responsibility. Indiana Gas has completed a remedial
investigation/feasibility study (RI/FS) at one of the sites under an agreed
order between Indiana Gas and the IDEM, and a Record of Decision was issued by
the IDEM in January 2000. Although Indiana Gas has not begun an RI/FS at
additional sites, Indiana Gas has submitted several of the sites to the IDEM's
Voluntary Remediation Program (VRP) and is currently conducting some level of
remedial activities, including groundwater monitoring at certain sites, where
deemed appropriate, and will continue remedial activities at the sites as
appropriate and necessary.

In conjunction with data compiled by environmental consultants, Indiana Gas has
accrued the estimated costs for further investigation, remediation, groundwater
monitoring, and related costs for the sites. While the total costs that may be
incurred in connection with addressing these sites cannot be determined at this
time, Indiana Gas has recorded costs that it reasonably expects to incur
totaling approximately $20.4 million.

The estimated accrued costs are limited to Indiana Gas' proportionate share of
the remediation efforts. Indiana Gas has arrangements in place for 19 of the 26
sites with other potentially responsible parties (PRP), which serve to limit
Indiana Gas' share of response costs at these 19 sites to between 20% and 50%.

With respect to insurance coverage, Indiana Gas has received and recorded
settlements from all known insurance carriers in an aggregate amount
approximating $20.4 million.

Environmental matters related to manufactured gas plants have had no material
impact on earnings since costs recorded to date approximate PRP and insurance
settlement recoveries. While Indiana Gas has recorded all costs which it
presently expects to incur in connection with activities at these sites, it is
possible that future events may require some level of additional remedial
activities which are not presently foreseen.

In October 2002, the Company received a formal information request letter from
the IDEM regarding five manufactured gas plants owned and/or operated by SIGECO
and not currently enrolled in the IDEM's VRP. In response, SIGECO submitted to
the IDEM the results of preliminary site investigations conducted in the
mid-1990's. These site investigations confirmed that based upon the conditions
known at the time, the sites posed no risk to human health or the environment.
Follow up reviews have been initiated by the Company to confirm that the sites
continue to pose no such risk.

On October 6, 2003, SIGECO filed applications to enter four of the manufactured
gas plant sites in IDEM's VRP. The remaining site is currently being addressed
in the VRP by another Indiana utility. SIGECO added those four sites into the
renewal of the global Voluntary Remediation Agreement that Indiana Gas has in
place with IDEM for its manufactured gas plant sites. That renewal was approved
by the IDEM on February 24, 2004. The total costs, including PRP involvement and
insurance recoveries, and if necessary, remedial work at the four SIGECO sites,
cannot be determined at this time.

8. Rate & Regulatory Matters

Vectren South (SIGECO) Gas Base Rate Settlement
On March 12, 2004, Vectren South filed a petition with the IURC to adjust its
base rates and charges for its gas distribution business in southwestern Indiana
to recover the ongoing cost of operating and maintaining the approximately
3,000-mile distribution and storage system used to serve more than 110,000
customers. On March 26, 2004, SIGECO reached a definitive agreement with the
OUCC regarding the proposed changes to the base rates and charges for its gas
distribution business in southwestern Indiana. The settlement agreement was
filed with the IURC and completes a collaborative effort between Vectren South
and the OUCC to streamline the formal regulatory review process. On June 2,
2004, the IURC will conduct a public hearing to consider approval of the filed
settlement.

The settlement agreement provides for: 1) a rate increase of $5.7 million, 2) a
rate design for the revenue increase, including a larger monthly customer
charge, intended to address earnings volatility related to weather, and 3)
recovery of the on-going costs associated with the federal Pipeline Safety
Improvement Act of 2002. Under the settlement, a Pipeline Safety Improvement
Tracker provides for the recovery of incremental non-capital dollars, capped at
$750,000 the first year and $500,000 thereafter. Costs in excess of the annual
cap amounts are deferred for future recovery.

The proposed rate settlement only addresses "non-gas" costs, including the costs
of constructing, operating and maintaining the Company's natural gas system.
While the timing of an order on the settlement is uncertain, the Company
believes than an order will be issued in the third quarter of 2004.

Vectren North (Indiana Gas) Base Rate Filing
On March 19, 2004, Vectren North filed a petition with the IURC to adjust its
base rates and charges for its gas distribution business in a 49 county region
covering central and southeastern Indiana. If the filing is approved, Indiana
Gas expects to increase its base rates by approximately $47 million to recover
the ongoing cost of operating, maintaining and expanding the approximately
12,000-mile distribution and storage system used to serve more than 525,000
customers. The petition only addresses Indiana Gas' "non-gas" costs which are
incurred to build, operate and maintain the pipes, other equipment and systems
that are used to deliver gas. The filing also includes a normal temperature
adjustment (NTA) mechanism to reduce the impact on customer bills caused by
variations in weather and to address earnings volatility related to weather.
With the NTA, historic average temperatures serve as the basis for computing
customers' bills, thereby smoothing out the effects of significant temperature
fluctuations. The timing and ultimate outcome of this regulatory initiative is
uncertain.

VEDO Gas Base Rate Pre-filing Notice
On April 16, 2004, VEDO issued a pre-filing notice to the PUCO of a request to
adjust base rates and charges for VEDO's gas distribution business in a
17-county region covering west central Ohio. If the filing is approved, VEDO
expects to increase base rates up to $25 million to recover the ongoing cost of
operating, maintaining and expanding the approximately 5,200-mile distribution
system used to serve more than 310,000 customers. The official application is
expected to be filed in late May. VEDO's request is subject to review and
approval by the PUCO. The petition only addresses VEDO's "non-gas costs," which
are incurred to build, operate and maintain pipelines, other equipment and
systems that are used to deliver gas across VEDO's system to its customers. The
filing also includes a proposed conservation tariff that will expand and provide
incentives for the Company to promote home weatherization and energy
conservation programs. The proposed tariff provides resources for consumers to
decrease natural gas usage through energy efficiency measures, and it allows the
company to proactively sponsor conservation without negatively impacting
earnings. The timing and ultimate outcome of this regulatory initiative is
uncertain.

Gas Cost Recovery (GCR) Audit Proceedings
There is an Ohio requirement that Ohio gas utilities undergo a biannual audit of
their gas acquisition practices in connection with the gas cost recovery (GCR)
mechanism. In the case of VEDO, the two-year period began in November 2000,
coincident with the acquisition of the Ohio operations and commencement of
service in Ohio. The audit provides the initial review of the portfolio
administration arrangement between VEDO and ProLiance. The external auditor
retained by the PUCO staff recently submitted an audit report wherein it
recommended a disallowance of approximately $7 million of previously recovered
gas costs. The Company believes a large portion of the third party auditor
recommendations is without merit. There are two elements of the recommendations
relating to the treatment of a pipeline refund and a penalty collectively
totaling $1.2 million, which VEDO does not oppose. A hearing has been held, and
the PUCO staff has recommended a $6.1 million disallowance. The Ohio Consumer
Counselor has recommended an $11.5 million disallowance. For this PUCO audit
period, any disallowance relating to the Company's ProLiance arrangement will be
shared by Vectren's joint venture partner. Based on a review of the matters, the
Company has reserved $1.1 million for its estimated share of a potential
disallowance. The Company believes that these proceedings will not likely have a
material effect on its operating results or financial condition. However, the
Company can provide no assurance as to the ultimate outcome of this proceeding.
The Company anticipates the PUCO's decision will be issued later this year.

9. Impact of Recently Issued Accounting Guidance

FIN 46/46R (Revised in December 2003)
In January 2003, the FASB issued Interpretation 46, "Consolidation of Variable
Interest Entities" (FIN 46). FIN 46 addresses consolidation by business
enterprises of variable interest entities (VIE) and significantly changes the
consolidation requirements for those entities. FIN 46 is intended to achieve
more consistent application of consolidation policies related to VIE's and thus
improves comparability between enterprises engaged in similar activities when
those activities are conducted through VIE's. In December 2003, the FASB
completed its deliberations of proposed modifications to FIN 46 and decided to
codify both the proposed modifications and other decisions previously issued
through certain FASB Staff Positions into one document that was issued as a
revision to the original Interpretation (FIN 46R). FIN 46R currently applies to
VIE's created after January 31, 2003, and to VIE's in which an enterprise
obtains an interest after that date. For entities created prior to January 31,
2003, FIN 46R is to be adopted no later than the end of the first interim or
annual reporting period ending after March 15, 2004. The Company has neither
created nor obtained an interest in a VIE since January 31, 2003. Adoption of
FIN 46R did not have a material impact on the Company's results of operations or
financial position.

10. Segment Reporting

VUHI's operations consist of its regulated operations (the Gas Utility Services
and Electric Utility Services operating segments), and other operations that
provide information technology and other support services to those regulated
operations. In total, there are three operating segments as defined by SFAS 131
"Disclosure About Segments of an Enterprise and Related Information" (SFAS 131).
Gas Utility Services provides natural gas distribution and transportation
services in nearly two-thirds of Indiana and to west central Ohio. Electric
Utility Services provides electricity primarily to southwestern Indiana, and
includes the Company's power generating and marketing operations. For these
regulated operations, the Company uses after tax operating income as a measure
of profitability, consistent with regulatory reporting requirements. The Company
cross manages its regulated operations as separated between Energy Delivery,
which includes the gas and electric transmission and distribution functions, and
Power Supply, which includes the power generating and marketing operations.

The Other Operations segment also contains other assets and operations that were
previously allocated to the Gas Utility and Electric Utility Segments. The
Company uses net income as the measure of profitability for this segment.
Information related to the Company's business segments is summarized below:

Three Months Ended March 31,
- ------------------------------------------------------------------------------
(In millions) 2004 2003
- ------------------------------------------------------------------------------
Revenues
Gas Utility Services $ 505.1 $ 509.2
Electric Utility Services 88.8 83.5
Other Operations 9.4 6.6
Eliminations (9.1) (6.4)
- ------------------------------------------------------------------------------
Consolidated Revenues $ 594.2 $ 592.9
==============================================================================

Profitability Measure
Regulated Operating Income
(Operating Income Less Applicable Income Taxes)
Gas Utility Services $ 46.1 $ 47.3
Electric Utility Services 13.4 16.3
- ------------------------------------------------------------------------------
Total Regulated Operating Income 59.5 63.6
- ------------------------------------------------------------------------------
Regulated other income (expense) - net (0.6) 0.4
Regulated interest expense & preferred dividends (15.8) (15.5)
- ------------------------------------------------------------------------------
Regulated Net Income 43.1 48.5
- ------------------------------------------------------------------------------
Other Operations Net Income (Loss) 1.6 (1.2)
- ------------------------------------------------------------------------------
Consolidated Net Income $ 44.7 $ 47.3
==============================================================================





ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

Description of the Business

Vectren Utility Holdings, Inc. (VUHI or the Company), an Indiana corporation,
serves as the intermediate holding company for Vectren Corporation's (Vectren)
three operating public utilities: Indiana Gas Company, Inc. (Indiana Gas or
Vectren North), Southern Indiana Gas and Electric Company (SIGECO or Vectren
South), and the Ohio operations. VUHI also has other assets that provide
information technology and other services to the three utilities. Vectren is an
energy and applied technology holding company headquartered in Evansville,
Indiana. Both Vectren and VUHI are exempt from registration pursuant to Section
3(a)(1) and 3(c) of the Public Utility Holding Company Act of 1935.

Indiana Gas provides natural gas distribution and transportation services to a
diversified customer base in 49 of Indiana's 92 counties. SIGECO provides
electric generation, transmission, and distribution services to 8 counties in
southwestern Indiana, including counties surrounding Evansville, and
participates in the wholesale power market. SIGECO also provides natural gas
distribution and transportation services to 10 counties in southwestern Indiana,
including counties surrounding Evansville. Indiana Gas and SIGECO generally do
business as Vectren Energy Delivery of Indiana, Inc. The Ohio operations, owned
as a tenancy in common by Vectren Energy Delivery of Ohio, Inc. (VEDO), a wholly
owned subsidiary, (53% ownership) and Indiana Gas (47% ownership), provide
natural gas distribution and transportation services to 17 counties in west
central Ohio, including counties surrounding Dayton.

Executive Summary of Consolidated Results of Operations

The following discussion and analysis should be read in conjunction with the
unaudited condensed consolidated financial statements and notes thereto.

Earnings were $44.7 million for the three months ended March 31, 2004, compared
to $47.3 million in the prior year. The $2.6 million decrease in earnings
resulted primarily from the effects of weather 10% warmer in 2004 compared to
2003, which decreased results approximately $5.0 million after tax. The decrease
was partially offset by the recovery of NOx expenditures and related operating
expenses which increased earnings $0.8 million after tax, and the $1.2 million
after tax charge in 2003 resulting from the Company's investment in BABB
International (BABB).

The Company generates revenue primarily from the delivery of natural gas and
electric service to its customers. The primary source of cash flow results from
the collection of customer bills and the payment for goods and services procured
for the delivery of gas and electric services. The results are impacted by
weather patterns in its service territory and general economic conditions both
in its service territory as well as nationally.

The Company has in place a disclosure committee that consists of senior
management as well as financial management. The committee is actively involved
in the preparation and review of the Company's SEC filings.

Significant Fluctuations

Throughout this discussion, the terms Gas Utility margin and Electric Utility
margin are used. Gas Utility margin and Electric Utility margin could be
considered non-GAAP measures of income. Gas Utility margin is calculated as Gas
utility revenues less the Cost of gas sold. Electric Utility margin is
calculated as Electric utility revenues less Fuel for electric generation and
Purchased electric energy. These measures exclude Other operating expenses,
Depreciation and amortization, and Taxes other than income taxes, which are
included in the calculation of operating income. The Company believes Gas
Utility and Electric Utility margins are better indicators of relative
contribution than revenues since gas prices and fuel costs can be volatile and
are generally collected on a dollar for dollar basis from customers. Margins
should not be considered an alternative to, or a more meaningful indicator of
operating performance than, operating income or net income as determined in
accordance with accounting principles generally accepted in the United States.

Margin

Margin generated from the sale of natural gas and electricity to residential and
commercial customers is seasonal and impacted by weather patterns in its service
territory. Margin generated from sales to industrial and other contract
customers is impacted by overall economic conditions. In general, margin is not
sensitive to variations in gas or fuel costs. It is, however, impacted by the
collection of state mandated taxes which fluctuate with gas costs and also some
level of price sensitive fluctuation in volumes sold. Electric generating asset
optimization activities are primarily affected by market conditions, the level
of excess generating capacity, and electric transmission availability. Following
is a discussion and analysis of margin generated from regulated utility
operations.

Gas Utility Margin (Gas Utility Revenues less Cost of Gas Sold) Gas Utility
margin and throughput by customer type follows:

Three Months Ended March 31,
- -----------------------------------------------------------------------------
(In millions) 2004 2003
- -----------------------------------------------------------------------------
Residential $ 90.4 $ 94.7
Commercial 28.1 29.7
Contract 18.0 18.5
Other 3.0 1.5
- -----------------------------------------------------------------------------
Total gas utility margin $ 139.5 $ 144.4
=============================================================================
Sold & transported volumes in MMDth:
To residential & commercial customers 57.3 61.8
To contract customers 29.2 30.3
- -----------------------------------------------------------------------------
Total throughput 86.5 92.1
=============================================================================

Gas Utility margins for the three months ended March 31, 2004, were $139.5
million, a decrease of $4.9 million, or 3%, compared to the prior year period.
It is estimated that weather 10% warmer than the prior year and 3% warmer than
normal decreased margins $7.7 million and was the primary contributor to the
decreased throughput. The decrease was partially offset by increased customers,
consumption, and higher utility receipts and excise taxes. The average cost per
dekatherm of gas purchased for the three months ended March 31, 2004, was $6.60
compared to $6.53 in 2003.

Electric Utility Margin (Electric Utility Revenues less Fuel for Electric
Generation and Purchased Electric Energy) Electric Utility margin by revenue
type follows:

Three Months Ended March 31,
- ------------------------------------------------------------------------------
(In millions) 2004 2003
- ------------------------------------------------------------------------------
Residential & commercial $ 35.5 $ 33.3
Industrial 14.4 12.3
Municipalities & other 4.6 4.5
- ------------------------------------------------------------------------------
Total retail & firm wholesale 54.5 50.1
Asset optimization 7.0 8.1
- ------------------------------------------------------------------------------
Total electric utility margin $ 61.5 $ 58.2
==============================================================================





Retail & Firm Wholesale Margin
For the three months ended March 31, 2004, margin from serving native load and
firm wholesale customers was $54.5 million, an increase of $4.4 million when
compared to 2003. Margin increased $3.6 million over 2003 due to the increase in
retail electric rates related to recovery of NOx compliance expenditures and
related operating expenses. Margins from industrial customers increased $2.1
million over 2003 reflecting some economic recovery. The effects of weather
partially offset these increases by approximately $0.7 million. Total retail and
firm wholesale volumes sold increased 6% to 1.50 GWh in 2004 compared to 1.42
GWh in 2003.

Margin from Asset Optimization Activities
Periodically, generation capacity is in excess of that needed to serve native
load and firm wholesale customers. The Company markets this unutilized capacity
to optimize the return on its owned generation assets. Substantially all of
these contracts are integrated with portfolio requirements around power supply
and delivery and are short-term purchase and sale transactions that expose the
Company to limited market risk.

Following is a reconciliation of asset optimization activity:

Three Months Ended March 31,
- ------------------------------------------------------------------------------
(In millions) 2004 2003
- ------------------------------------------------------------------------------
Beginning of Period Net Asset Optimization Position $ (0.4) $ (0.7)

Statement of Income Activity
Net mark-to-market gains 2.8 0.9
Net realized gains recognized 4.2 7.2
- ------------------------------------------------------------------------------
Net activity in electric utility margin 7.0 8.1
- ------------------------------------------------------------------------------
Net cash received & other adjustments (3.2) (7.8)
- ------------------------------------------------------------------------------
End of Period Net Asset Optimization Position $ 3.4 $ (0.4)
==============================================================================

For the three months ended March 31, 2004 and 2003, volumes sold into the
wholesale market were 0.51 GWh compared to 1.45 GWh in 2003, while volumes
purchased were 0.47 GWh in 2004 compared to 1.26 GWh in 2003. A portion of
volumes purchased in the wholesale market is used to serve native load and firm
wholesale customers, and in 2004 compared to 2003, greater amounts of purchased
power have been required for native load due to scheduled and unscheduled
outages of owned generation, which has reduced capacity available for
optimization. The decrease in margin is due largely to market conditions and
price volatility this quarter, compared to the same quarter last year.

Following is information regarding asset optimization activities included in
Electric utility revenues and Fuel for electric generation in the Statements of
Income:
Three Months Ended March 31,
- ------------------------------------------------------------------------------
(In millions) 2004 2003
- ------------------------------------------------------------------------------
Activity related to:
Sales contracts $ 11.9 $ 47.2
Purchase contracts (6.0) (36.7)
Net mark-to-market gains realized 2.8 0.9
- ------------------------------------------------------------------------------
Net asset optimization revenue 8.7 11.4
- ------------------------------------------------------------------------------
Fuel for electric generation 1.7 3.3
- ------------------------------------------------------------------------------
Asset optimization margin $ 7.0 $ 8.1
==============================================================================





Operating Expenses

For the three months ended March 31, 2004, other operating and depreciation &
amortization expenses increased $3.5 million and $0.8 million, respectively,
compared to 2003. The increases resulted from $1.5 million of additional
operating expenses and $0.8 million of additional depreciation expense
associated with NOx compliance. The remaining increase in other operating
expenses is primarily due to higher labor and benefit costs.

Total Other Income (Expense)

For the three months ended March 31, 2004, total other income (expense)
increased $2.1 million compared to 2003. The increase was primarily attributable
to $2.5 million in charges taken against the Company's equity method investment
in BABB. In the first quarter of 2003, the Company recorded a $2.0 million write
down of its investment in BABB as well as $0.5 million of equity method losses
and other activity.

Interest Expense

For the three months ended March 31, 2004, interest expense increased $0.5
million compared to 2003. The increase reflects the impact of permanent
financing completed in 2003 whereby short-term variable rate debt was converted
to fixed rate debt at a higher interest rate.

Income Taxes

For the three months ended March 31, 2004, Federal and state income taxes
decreased $2.2 million primarily due to fluctuations in pre-tax income.

Environmental Matters

NOx SIP Call Matter

The Company has initiated steps toward compliance with Indiana's State
Implementation Plan (SIP) of the Clean Air Act (the Act). These steps include
installing Selective Catalytic Reduction (SCR) systems at Culley Generating
Station Unit 3 (Culley), Warrick Generating Station Unit 4, and A.B. Brown
Generating Station Units 1 and 2. SCR systems reduce flue gas NOx emissions to
atmospheric nitrogen and water using ammonia in a chemical reaction. This
technology is known to currently be the most effective method of reducing
nitrogen oxide (NOx) emissions where high removal efficiencies are required.

The IURC has issued orders that approve:
>> the Company's project to achieve environmental compliance by investing
in clean coal technology;
>> a total capital cost investment for this project up to $244 million
(excluding AFUDC), subject to periodic review of the actual costs
incurred;
>> a mechanism whereby, prior to an electric base rate case, the Company
may recover through a rider that is updated every six months, an eight
percent return on its weighted capital costs for the project; and
>> ongoing recovery of operating costs, including depreciation and
purchased emission allowances through a rider mechanism, related to the
clean coal technology once the facility is placed into service.

Based on the level of system-wide emissions reductions required and the control
technology utilized to achieve the reductions, the current estimated clean coal
technology construction cost is consistent with amounts approved in the IURC's
orders and is expected to be expended through 2006. Through March 31, 2004,
$158.5 million has been expended. After the equipment is installed and
operational, related annual operating expenses, including depreciation expense,
are estimated to be between $24 million and $27 million. A portion of those
expenses began in October 2003 when the Culley SCR became operational. The 8
percent return on capital investment approximates the return authorized in the
Company's last electric rate case in 1995 and includes a return on equity.

The Company expects to achieve timely compliance as a result of the project.
Construction of the first SCR at Culley was placed into service in October 2003,
and construction of the Warrick 4 and Brown SCR's is proceeding on schedule to
achieve full compliance with the requirements of the NOx SIP Call. Installation
of SCR technology as planned is expected to reduce the Company's overall NOx
emissions to levels compliant with Indiana's NOx emissions budget allotted by
the USEPA. Therefore, the Company has recorded no accrual for potential
penalties that may result from noncompliance.

Manufactured Gas Plants

In the past, Indiana Gas, SIGECO, and others operated facilities for the
manufacture of gas. Given the availability of natural gas transported by
pipelines, these facilities have not been operated for many years. Under
currently applicable environmental laws and regulations, Indiana Gas and others
may now be required to take remedial action if certain byproducts are found
above the regulatory thresholds at these sites.

Indiana Gas has identified the existence, location, and certain general
characteristics of 26 gas manufacturing and storage sites for which it may have
some remedial responsibility. Indiana Gas has completed a remedial
investigation/feasibility study (RI/FS) at one of the sites under an agreed
order between Indiana Gas and the IDEM, and a Record of Decision was issued by
the IDEM in January 2000. Although Indiana Gas has not begun an RI/FS at
additional sites, Indiana Gas has submitted several of the sites to the IDEM's
Voluntary Remediation Program (VRP) and is currently conducting some level of
remedial activities, including groundwater monitoring at certain sites, where
deemed appropriate, and will continue remedial activities at the sites as
appropriate and necessary.

In conjunction with data compiled by environmental consultants, Indiana Gas has
accrued the estimated costs for further investigation, remediation, groundwater
monitoring, and related costs for the sites. While the total costs that may be
incurred in connection with addressing these sites cannot be determined at this
time, Indiana Gas has recorded costs that it reasonably expects to incur
totaling approximately $20.4 million.

The estimated accrued costs are limited to Indiana Gas' proportionate share of
the remediation efforts. Indiana Gas has arrangements in place for 19 of the 26
sites with other potentially responsible parties (PRP), which serve to limit
Indiana Gas' share of response costs at these 19 sites to between 20% and 50%.

With respect to insurance coverage, Indiana Gas has received and recorded
settlements from all known insurance carriers in an aggregate amount
approximating $20.4 million.

Environmental matters related to manufactured gas plants have had no material
impact on earnings since costs recorded to date approximate PRP and insurance
settlement recoveries. While Indiana Gas has recorded all costs which it
presently expects to incur in connection with activities at these sites, it is
possible that future events may require some level of additional remedial
activities which are not presently foreseen.

In October 2002, the Company received a formal information request letter from
the IDEM regarding five manufactured gas plants owned and/or operated by SIGECO
and not currently enrolled in the IDEM's VRP. In response, SIGECO submitted to
the IDEM the results of preliminary site investigations conducted in the
mid-1990's. These site investigations confirmed that based upon the conditions
known at the time, the sites posed no risk to human health or the environment.
Follow up reviews have been initiated by the Company to confirm that the sites
continue to pose no such risk.

On October 6, 2003, SIGECO filed applications to enter four of the manufactured
gas plant sites in IDEM's VRP. The remaining site is currently being addressed
in the VRP by another Indiana utility. SIGECO added those four sites into the
renewal of the global Voluntary Remediation Agreement that Indiana Gas has in
place with IDEM for its manufactured gas plant sites. That renewal was approved
by the IDEM on February 24, 2004. The total costs, including PRP involvement and
insurance recoveries, and if necessary, remedial work at the four SIGECO sites,
cannot be determined at this time.





Rate and Regulatory Matters

Vectren South (SIGECO) Gas Base Rate Settlement

On March 12, 2004, Vectren South filed a petition with the IURC to adjust its
base rates and charges for its gas distribution business in southwestern Indiana
to recover the ongoing cost of operating and maintaining the approximately
3,000-mile distribution and storage system used to serve more than 110,000
customers. On March 26, 2004, SIGECO reached a definitive agreement with the
OUCC regarding the proposed changes to the base rates and charges for its gas
distribution business in southwestern Indiana. The settlement agreement was
filed with the IURC and completes a collaborative effort between Vectren South
and the OUCC to streamline the formal regulatory review process. On June 2,
2004, the IURC will conduct a public hearing to consider approval of the filed
settlement.

The settlement agreement provides for: 1) a rate increase of $5.7 million, 2) a
rate design for the revenue increase, including a larger monthly customer
charge, intended to address earnings volatility related to weather, and 3)
recovery of the on-going costs associated with the federal Pipeline Safety
Improvement Act of 2002. Under the settlement, a Pipeline Safety Improvement
Tracker provides for the recovery of incremental non-capital dollars, capped at
$750,000 the first year and $500,000 thereafter. Costs in excess of the annual
cap amounts are deferred for future recovery.

The proposed rate settlement only addresses "non-gas" costs, including the costs
of constructing, operating and maintaining the Company's natural gas system.
While the timing of an order on the settlement is uncertain, the Company
believes than an order will be issued in the third quarter of 2004.

Vectren North (Indiana Gas) Base Rate Filing

On March 19, 2004, Vectren North filed a petition with the IURC to adjust its
base rates and charges for its gas distribution business in a 49 county region
covering central and southeastern Indiana. If the filing is approved, Indiana
Gas expects to increase its base rates by approximately $47 million to recover
the ongoing cost of operating, maintaining and expanding the approximately
12,000-mile distribution and storage system used to serve more than 525,000
customers. The petition only addresses Indiana Gas' "non-gas" costs which are
incurred to build, operate and maintain the pipes, other equipment and systems
that are used to deliver gas. The filing also includes a normal temperature
adjustment (NTA) mechanism to reduce the impact on customer bills caused by
variations in weather and to address earnings volatility related to weather.
With the NTA, historic average temperatures serve as the basis for computing
customers' bills, thereby smoothing out the effects of significant temperature
fluctuations. The timing and ultimate outcome of this regulatory initiative is
uncertain.

VEDO Gas Base Rate Pre-filing Notice

On April 16, 2004, VEDO issued a pre-filing notice to the PUCO of a request to
adjust base rates and charges for VEDO's gas distribution business in a
17-county region covering west central Ohio. If the filing is approved, VEDO
expects to increase base rates up to $25 million to recover the ongoing cost of
operating, maintaining and expanding the approximately 5,200-mile distribution
system used to serve more than 310,000 customers. The official application is
expected to be filed in late May. VEDO's request is subject to review and
approval by the PUCO. The petition only addresses VEDO's "non-gas costs," which
are incurred to build, operate and maintain pipelines, other equipment and
systems that are used to deliver gas across VEDO's system to its customers. The
filing also includes a proposed conservation tariff that will expand and provide
incentives for the Company to promote home weatherization and energy
conservation programs. The proposed tariff provides resources for consumers to
decrease natural gas usage through energy efficiency measures, and it allows the
company to proactively sponsor conservation without negatively impacting
earnings. The timing and ultimate outcome of this regulatory initiative is
uncertain.

Gas Cost Recovery (GCR) Audit Proceedings

There is an Ohio requirement that Ohio gas utilities undergo a biannual audit of
their gas acquisition practices in connection with the gas cost recovery (GCR)
mechanism. In the case of VEDO, the two-year period began in November 2000,
coincident with the acquisition of the Ohio operations and commencement of
service in Ohio. The audit provides the initial review of the portfolio
administration arrangement between VEDO and ProLiance. The external auditor
retained by the PUCO staff recently submitted an audit report wherein it
recommended a disallowance of approximately $7 million of previously recovered
gas costs. The Company believes a large portion of the third party auditor
recommendations is without merit. There are two elements of the recommendations
relating to the treatment of a pipeline refund and a penalty collectively
totaling $1.2 million, which VEDO does not oppose. A hearing has been held, and
the PUCO staff has recommended a $6.1 million disallowance. The Ohio Consumer
Counselor has recommended an $11.5 million disallowance. For this PUCO audit
period, any disallowance relating to the Company's ProLiance arrangement will be
shared by Vectren's joint venture partner. Based on a review of the matters, the
Company has reserved $1.1 million for its estimated share of a potential
disallowance. The Company believes that these proceedings will not likely have a
material effect on its operating results or financial condition. However, the
Company can provide no assurance as to the ultimate outcome of this proceeding.
The Company anticipates the PUCO's decision will be issued later this year.

Impact of Recently Issued Accounting Guidance

FIN 46/46R (Revised in December 2003)

In January 2003, the FASB issued Interpretation 46, "Consolidation of Variable
Interest Entities" (FIN 46). FIN 46 addresses consolidation by business
enterprises of variable interest entities (VIE) and significantly changes the
consolidation requirements for those entities. FIN 46 is intended to achieve
more consistent application of consolidation policies related to VIE's and thus
improves comparability between enterprises engaged in similar activities when
those activities are conducted through VIE's. In December 2003, the FASB
completed its deliberations of proposed modifications to FIN 46 and decided to
codify both the proposed modifications and other decisions previously issued
through certain FASB Staff Positions into one document that was issued as a
revision to the original Interpretation (FIN 46R). FIN 46R currently applies to
VIE's created after January 31, 2003, and to VIE's in which an enterprise
obtains an interest after that date. For entities created prior to January 31,
2003, FIN 46R is to be adopted no later than the end of the first interim or
annual reporting period ending after March 15, 2004. The Company has neither
created nor obtained an interest in a VIE since January 31, 2003. Adoption of
FIN 46R did not have a material impact on the Company's results of operations or
financial position.

Financial Condition

Within Vectren's consolidated group, VUHI funds the short-term and long-term
financing needs of utility operations. Vectren does not guarantee VUHI's debt.
VUHI's outstanding long-term and short-term borrowing arrangements are jointly
and severally guaranteed by Indiana Gas, SIGECO, and VEDO. The guarantees are
full and unconditional and joint and several, and VUHI has no subsidiaries other
than the subsidiary guarantors. Information about the subsidiary guarantors as a
group is included in Note 3 to the condensed consolidated financial statements.
VUHI's long-term and short-term obligations outstanding at March 31, 2004,
totaled $550.0 million and $40.0 million, respectively. Additionally, prior to
VUHI's formation, Indiana Gas and SIGECO funded their operations separately, and
therefore, have long-term debt outstanding funded solely by their operations.
VUHI's operations have historically funded almost all of Vectren's common stock
dividends.

VUHI's and Indiana Gas' credit ratings on outstanding senior unsecured debt at
March 31, 2004, are A-/Baa1 as rated by Standard and Poor's Ratings Services
(Standard and Poor's) and Moody's Investors Service (Moody's), respectively.
SIGECO's credit ratings on outstanding senior unsecured debt are BBB+/Baa1.
SIGECO's credit ratings on outstanding secured debt are A-/A3. VUHI's commercial
paper has a credit rating of A-2/P-2. Moody's current outlook is stable while
Standard and Poor's current outlook is negative. The ratings of Moody's and
Standard and Poor's are categorized as investment grade and are unchanged from
December 31, 2003. A security rating is not a recommendation to buy, sell, or
hold securities. The rating is subject to revision or withdrawal at any time,
and each rating should be evaluated independently of any other rating. Standard
and Poor's and Moody's lowest level investment grade rating is BBB- and Baa3,
respectively.

The Company's consolidated equity capitalization objective is 45-55% of total
capitalization. This objective may have varied, and will vary, depending on
particular business opportunities, capital spending requirements, and seasonal
factors that affect the Company's operation. The Company's equity component was
50% of total capitalization, including current maturities of long-term debt and
long-term debt subject to tender, at both March 31, 2004, and December 31, 2003,
respectively.

Sources & Uses of Liquidity

Operating Cash Flow

The Company's primary and historical source of liquidity to fund working capital
requirements has been cash generated from operations, which for the three months
ended March 31, 2004 and 2003, was $210.9 million and $127.9 million,
respectively. The increase of $83.0 million is primarily the result of favorable
changes in working capital accounts due in part to greater utilization of
natural gas inventory and prepaid gas delivery services than in the prior year.

Financing Cash Flow

Although working capital requirements are generally funded by cash flow from
operations, the Company uses short-term borrowings to supplement working capital
needs when accounts receivable balances are at their highest and gas storage is
refilled. Additionally, short-term borrowings are required for capital projects
and investments until they are permanently financed.

Cash flow required for financing activities of $163.9 million for the three
months ended March 31, 2004, includes a decrease of short-term borrowings of
approximately $145.2 million and increased dividends to its parent company
compared to 2003. Short-term borrowings were retired with greater operating cash
flow. In 2003, $39.9 million of long-term debt was retired.

Investing Cash Flow

Cash flow required for investing activities was $42.6 million and $49.3 million
for the three months ended March 31, 2004 and 2003, respectively. The decrease
in 2004 resulted from lower capital expenditures for the NOx project,
implementation of choice programs in Ohio, and payments to other Vectren
subsidiaries for transfers of assets occurring in 2003.

Available Sources of Liquidity

At March 31, 2004, the Company has $351 million of short-term borrowing
capacity, of which approximately $311 million is available.

Potential Uses of Liquidity

Planned Capital Expenditures & Investments

Capital expenditures for the remainder of 2004 are estimated to be approximately
$207 million.





Forward-Looking Information

A "safe harbor" for forward-looking statements is provided by the Private
Securities Litigation Reform Act of 1995 (Reform Act of 1995). The Reform Act of
1995 was adopted to encourage such forward-looking statements without the threat
of litigation, provided those statements are identified as forward-looking and
are accompanied by meaningful cautionary statements identifying important
factors that could cause the actual results to differ materially from those
projected in the statement. Certain matters described in Management's Discussion
and Analysis of Results of Operations and Financial Condition are
forward-looking statements. Such statements are based on management's beliefs,
as well as assumptions made by and information currently available to
management. When used in this filing, the words "believe," "anticipate,"
"endeavor," "estimate," "expect," "objective," "projection," "forecast," "goal,"
and similar expressions are intended to identify forward-looking statements. In
addition to any assumptions and other factors referred to specifically in
connection with such forward-looking statements, factors that could cause the
Company's actual results to differ materially from those contemplated in any
forward-looking statements include, among others, the following:

o Factors affecting utility operations such as unusual weather conditions;
catastrophic weather-related damage; unusual maintenance or repairs;
unanticipated changes to fossil fuel costs; unanticipated changes to gas
supply costs, or availability due to higher demand, shortages,
transportation problems or other developments; environmental or pipeline
incidents; transmission or distribution incidents; unanticipated changes to
electric energy supply costs, or availability due to demand, shortages,
transmission problems or other developments; or electric transmission or
gas pipeline system constraints.
o Increased competition in the energy environment including effects of
industry restructuring and unbundling.
o Regulatory factors such as unanticipated changes in rate-setting policies
or procedures, recovery of investments and costs made under traditional
regulation, and the frequency and timing of rate increases.
o Financial or regulatory accounting principles or policies imposed by the
Financial Accounting Standards Board; the Securities and Exchange
Commission; the Federal Energy Regulatory Commission; state public utility
commissions; state entities which regulate electric and natural gas
transmission and distribution, natural gas gathering and processing,
electric power supply; and similar entities with regulatory oversight.
o Economic conditions including the effects of an economic downturn,
inflation rates, and monetary fluctuations.
o Changing market conditions and a variety of other factors associated with
physical energy and financial trading activities including, but not limited
to, price, basis, credit, liquidity, volatility, capacity, interest rate,
and warranty risks.
o Direct or indirect effects on our business, financial condition or
liquidity resulting from a change in our credit rating, changes in interest
rates, and/or changes in market perceptions of the utility industry and
other energy-related industries.
o Employee or contractor workforce factors including changes in key
executives, collective bargaining agreements with union employees, or work
stoppages.
o Legal and regulatory delays and other obstacles associated with mergers,
acquisitions, and investments in joint ventures.
o Costs and other effects of legal and administrative proceedings,
settlements, investigations, claims, and other matters, including, but not
limited to, those described in Management's Discussion and Analysis of
Results of Operations and Financial Condition.
o Changes in Federal, state or local legislature requirements, such as
changes in tax laws or rates, environmental laws and regulations.

The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of changes in actual results,
changes in assumptions, or other factors affecting such statements.





ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to various business risks associated with commodity
prices, interest rates, and counter-party credit. These financial exposures are
monitored and managed by the Company as an integral part of its overall risk
management program. The Company's risk management program includes, among other
things, the use of derivatives to mitigate risk. The Company also executes
derivative contracts in the normal course of operations while buying and selling
commodities to be used in operations and optimizing its generation assets.

These risks are not significantly different from the information set forth in
Item 7A Quantitative and Qualitative Disclosures About Market Risk included in
the VUHI 2003 Form 10-K and is therefore not presented herein.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of March 31, 2004, the Company carried out an evaluation under the
supervision and with the participation of the Chief Executive Officer and Chief
Financial Officer of the effectiveness and the design and operation of the
Company's disclosure controls and procedures. Based on that evaluation, the
Chief Executive Officer and the Chief Financial Officer have concluded that the
Company's disclosure controls and procedures are effective at providing
reasonable assurance that material information relating to the Company required
to be disclosed by the Company in its filings under the Securities Exchange Act
of 1934 (Exchange Act) is brought to their attention on a timely basis.

Disclosure controls and procedures, as defined by the Exchange Act in Rules
13a-15(e) and 15d-15(e), are controls and other procedures of the Company that
are designed to ensure that information required to be disclosed by the Company
in the reports filed or submitted by it under the Exchange Act is recorded,
processed, summarized, and reported within the time periods specified in the
SEC's rules and forms. "Disclosure controls and procedures" include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in its Exchange Act reports is accumulated and
communicated to the Company's management, including its principal executive and
financial officers, as appropriate to allow timely decisions regarding required
disclosure.

Changes in Internal Control Over Financial Reporting

During the quarter ended March 31, 2004, there have been no significant changes
to the Company's internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.

Internal control over financial reporting is defined by the SEC in Final Rule:
Management's Reports on Internal Control Over Financial Reporting and
Certification of Disclosure in Exchange Act Periodic Reports. The final rule
defines internal control over financial reporting as a process designed by, or
under the supervision of, the registrant's principal executive and principal
financial officers, or persons performing similar functions, and effected by the
registrant's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that: (1) Pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and dispositions of the
assets of the registrant; (2) Provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the registrant are being made only in accordance with
authorizations of management and directors of the registrant; and (3) Provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the registrant's assets that could have a
material effect on the financial statements.





PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is party to various legal proceedings arising in the normal course
of business. In the opinion of management, there are no legal proceedings
pending against the Company that are likely to have a material adverse effect on
its financial position or results of operations. See Note 7 of its unaudited
consolidated condensed financial statements included in Part 1 Item 1 Financial
Statements regarding Clean Air Act and related legal proceedings.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Certifications

31.1 Certification Pursuant To Section 302 of The Sarbanes-Oxley Act Of 2002-
Chief Executive Officer

31.2 Certification Pursuant To Section 302 of The Sarbanes-Oxley Act Of 2002-
Chief Financial Officer

32 Certification Pursuant To Section 906 of The Sarbanes-Oxley Act Of 2002

(b) Reports On Form 8-K During The Last Calendar Quarter

On January 30, 2004, the Company filed a Current Report on Form 8-K with respect
to the release of financial information to the investment community regarding
Vectren's and the Company's results of operations for the three and twelve month
periods ended December 30, 2003. The financial information was released to the
public through this filing.
Item 12. Results of Operations and Financial Condition
Index to Exhibits
99-1 - Press Release - Vectren Corporation Reports Fiscal
2003 Results
99-2 - Cautionary Statement for Purposes of the "Safe
Harbor" Provisions of the Private Securities
Litigation Reform Act of 1995

On March 15, 2004, the Company filed a Current Report on Form 8-K with respect
to the announcement of a filing for a general gas rate increase by its wholly
owned subsidiary, Southern Indiana Gas and Electric Company (Vectren South).
Item 9. Regulation FD Disclosure
Index to Exhibits
99-1 - Vectren South seeks approval of new natural gas base
rates
99-2 - Cautionary Statement for Purposes of the "Safe
Harbor" Provisions of the Private Securities
Litigation Reform Act of 1995

On March 22, 2004, the Company filed a Current Report on Form 8-K with respect
to the announcement of a filing for a general gas rate increase by its wholly
owned subsidiary, Indiana Gas Company, Inc. (Vectren North).
Item 9. Regulation FD Disclosure
Index to Exhibits
99-1 - Press Release - Vectren North seeks approval of new
natural gas base.
99-2 - Cautionary Statement for Purposes of the "Safe
Harbor" Provisions of the Private Securities
Litigation Reform Act of 1995

On March 29, 2004, the Company filed a Current Report on Form 8-K with respect
to the announcement of a definitive agreement with the Indiana Office of Utility
Consumer Counselor regarding the proposed changes to the gas distribution base
rates and charges for its wholly owned subsidiary, Southern Indiana Gas and
Electric Company (Vectren South). The settlement agreement was filed with the
Indiana Utility Regulatory Commission.
Item 9. Regulation FD Disclosure
Index to Exhibits
99-1 - Press Release- Vectren South files settlement
agreement in natural gas base rate proceeding
99-2 - Cautionary Statement for Purposes of the "Safe
Harbor" Provisions of the Private Securities
Litigation Reform Act of 1995



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



VECTREN UTILITY HOLDINGS, INC.
-----------------------------------
Registrant





May 14, 2004 /s/Jerome A. Benkert, Jr.
-------------------------
Jerome A. Benkert, Jr.
Executive Vice President &
Chief Financial Officer
(Principal Financial Officer)




/s/M. Susan Hardwick
---------------------------
M. Susan Hardwick
Vice President & Controller
(Principal Accounting Officer)