Owner sells Vectren Source

@@facebook=

@@

Vectren Corp.’s sale of its Vectren Source retail natural gas marketing unit, in a $39 million deal, gets the parent company out of a “commodities business” that had contributed little to Vectren’s bottom line, industry analysts said Tuesday.

The buyer was Direct Energy, a competing natural gas marketer in the Dayton region where Vectren Energy Delivery of Ohio Inc., another Vectren Corp. unit, distributes natural gas.

The Public Utilities Commission of Ohio has certified Direct Energy Services LLC, IGS Energy, MxEnergy Inc. and Ohio Natural Gas as marketers authorized to compete for business, supplying natural gas to residential and small-business customers in the Vectren Energy Delivery service area, which includes the Miami Valley.

Vectren said it is using proceeds from the sale to pay down short-term debt. The parent company retains GreenStreet Solutions, which had been a Vectren Source business that provides home energy audits and energy usage expertise.

The sale fits Vectren Corp.’s revised strategy to focus on distribution infrastructure and energy service businesses rather than energy marketing, said Daniel Fidell, an analyst with USCA Securities LLC.

“Vectren Source wasn’t a significant contributor for Vectren to total earnings,” Fidell said.

Analysts said Vectren Corp., the parent company based in Evansville, Ind., may also try to sell ProLiance Energy LLC, a marketing unit which supplies natural gas to industries, utilities and municipalities, because ProLiance has been losing money.

In November, Vectren Corp. reported that ProLiance lost $25.3 million during the first nine months of 2011, compared with the parent company’s overall net income of $95 million for that period.