Cinergy/PSI, Vectren Move Forward With Engineering of Cleaner Coal Power Plant.

CINCINNATI -- Cinergy/PSI (NYSE:CIN) announced today that it has decided to begin the preliminary engineering and design of a commercial, integrated gasification combined cycle (IGCC) generating station in partnership with Vectren Corporation (NYSE:VVC). This decision follows an extensive feasibility study recently completed that examined the potential benefits of such a project.

The companies will now negotiate a contract with General Electric Company and Bechtel Corporation for a preliminary engineering study. Cinergy/PSI and Vectren are considering several sites, including the site of Cinergy/PSI's coal-fired station in Edwardsport, Ind., for the facility which would produce approximately 600 megawatts of electricity to help meet increased electrical demand over the next decade.

"This is a major step in meeting the future need for additional generation in Indiana," said James E. Rogers, chairman and chief executive of Cinergy Corp. "With the dramatic increase in price and limited supplies of natural gas and oil, we must maintain coal as a significant option for our electric supply in the Midwest. Coal gasification is a premier clean coal technology that we believe provides environmental benefits now and in the future as we move toward a carbon constrained world."

The full preliminary engineering and design study is expected to take about a year and will result in site-specific data for construction of the plant. A final decision on construction will be made after the engineering study is complete and regulatory approvals have been received.

Integrated gasification combined cycle plants turn coal to gas, removing most of the sulfur dioxide and other emissions before the gas is used to fuel a combustion turbine generator. The hot exhaust gases are then used to heat steam, driving a steam turbine generator. The technology uses less water and has fewer emissions than a conventional coal-fired plant with currently required pollution control equipment. Another benefit is the potential to remove mercury and carbon dioxide upstream of the combustion process at a lower cost than conventional plants.

"The use of Indiana-based coal to produce environmentally friendly power is important to deliver affordable energy for our customers," said Vectren Chairman, President and CEO Niel C. Ellerbrook. "Like Cinergy/PSI, we too have identified future generation needs to meet our Southwestern Indiana customer demand. This project could help meet those needs and be a significant contributor to the Indiana economy."

About Cinergy

Cinergy Corp. (NYSE:CIN) has a balanced, integrated portfolio consisting of two core businesses: regulated operations and commercial businesses. Cinergy's regulated public utilities in Ohio, Indiana, and Kentucky serve 1.5 million electric customers and about 500,000 gas customers. In addition, its Indiana regulated company owns 7,000 megawatts of generation. Cinergy's competitive commercial businesses have 6,300 megawatts of generating capacity with a profitable balance of stable existing customer portfolios, new customer origination, marketing and trading, and industrial-site cogeneration. Cinergy's integrated businesses make it a Midwest leader in providing both low-cost generation and reliable electric and gas service. For more information, visit www.cinergy.com.

About Vectren

Vectren Corporation is an energy and applied technology holding company headquartered in Evansville, Indiana. Vectren's energy delivery subsidiaries provide gas and/or electricity to over one million customers in adjoining service territories that cover nearly two-thirds of Indiana and west central Ohio. Vectren's non-regulated subsidiaries and affiliates currently offer energy-related products and services to customers throughout the Midwest and Southeast. These include gas marketing and related services; coal production and sales; and utility infrastructure services. To learn more about Vectren, visit www.vectren.com.

This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management's beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as "anticipate", "believe", "intend", "estimate", "expect", "continue", "should", "could", "may", "plan", "project", "predict", "will", and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to, unanticipated weather conditions; unscheduled generation outages; unusual maintenance or repairs; unanticipated changes in costs; environmental incidents, including costs of compliance with existing and future environmental requirements; electric transmission or gas pipeline system constraints; legislative and regulatory initiatives; additional competition in electric or gas markets and continued industry consolidation; financial or regulatory accounting principles; political, legal, and economic conditions and developments in the countries in which we have a presence; changing market conditions and other factors related to physical energy and financial trading activities; the performance of projects undertaken by our non-regulated businesses and the success of efforts to invest in and develop new opportunities; availability of, or cost of, capital; employee workforce factors; delays and other obstacles associated with mergers, acquisitions, and investments in joint ventures; and costs and effects of legal and administrative proceedings, settlements, investigations, and claims. Please refer to the company's SEC filings for additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to update the information contained herein.