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

                                    Form 10-Q



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

For quarterly period ended March 31, 2002

                                       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 1-3553


                    SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
             (Exact name of registrant as specified in its charter)

                 INDIANA                              35-0672570
     -------------------------------        -----------------------------
     (State or other jurisdiction of              (I.R.S. Employer
     incorporation or organization)                Identification No.)

                20 N.W. Fourth Street, Evansville, Indiana 47708
      ---------------------------------------------------------------------
              (Address of principal executive offices and 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) have been subject to such filing
requirements for the past 90 days: Yes [X] No [ ]

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

  Common Stock- Without Par Value     15,754,826             May 1, 2002
  -------------------------------     ----------             -----------
               Class               Number of Shares              Date

As of May 1, 2002, all shares outstanding of the Registrant's classes of common
stock were held by Vectren Corporation through its wholly owned subsidiary,
Vectren Utility Holdings, Inc.



<PAGE>






                                Table of Contents
Item                                                                     Page
Number                                                                   Number
                   Part I. Financial Information

  1   Financial Statements (Unaudited) ...........................
      Southern Indiana Gas and Electric Company
        Condensed Balance Sheets..................................        1-2
        Condensed Statements of Income............................         3
        Condensed Statements of Cash Flows........................         4
        Notes to Condensed Unaudited Financial Statements.........        5-10
  2   Management's Discussion and Analysis
        Of Results of Operations and Financial Condition..........       11-18
  3   Qualitative and Quantitative Disclosures
         About Market Risk........................................       18-19

                    Part II. Other Information

  1   Legal Proceedings...........................................        20
  6   Exhibits and Reports on Form 8-K............................        20
      Signatures..................................................        21

                                   Definitions
As discussed in this Form 10-Q, the abbreviations MMDth means millions of
dekatherms, MMBTU means millions of British thermal units, and throughput means
combined gas sales and gas transportation volumes.

<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

                    SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
                            CONDENSED BALANCE SHEETS
                            (Unaudited- In thousands)




                                                         March 31,  December 31,
                                                            2002         2001
                                                        ----------   ----------
                               ASSETS

Utility Plant
  Original cost                                        $1,468,050   $1,455,826
  Less:  Accumulated depreciation & amortization          697,919      690,344
                                                       ----------   ----------
       Net utility plant                                  770,131      765,482
                                                       ----------   ----------

Current Assets
   Cash & cash equivalents                                  2,733        2,451
   Accounts receivable-less reserves of $3,453 &
       $3,241, respectively                                48,989       41,227
   Receivables from other Vectren companies                10,662       10,065
   Accrued unbilled revenues                               16,390       17,013
   Inventories                                             33,400       38,322
   Recoverable fuel & natural gas costs                    13,935       22,132
   Prepayments & other current assets                      20,659       14,053
                                                       ----------   ----------
       Total current assets                               146,768      145,263
                                                       ----------   ----------

Investments in unconsolidated affiliates                      160          160
Other investments                                           9,409        9,254
Non-utility property-net                                    3,789        4,386
Goodwill-net                                                5,557        5,557
Regulatory assets                                          41,546       41,525
Other assets                                                2,382        1,595
                                                       ----------   ----------
TOTAL ASSETS                                           $  979,742   $  973,222
                                                       ==========   ==========




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


<PAGE>




                    SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
                            CONDENSED BALANCE SHEETS
                           (Unaudited - In thousands)

                                                         March 31, December 31,
                                                           2002       2001
                                                         --------   --------
          LIABILITIES & SHAREHOLDER'S EQUITY

Capitalization
   Common shareholder's equity
      Common stock (no par value)                       $ 78,258    $ 78,258
      Retained earnings                                  256,292     255,464
      Accumulated other comprehensive income                  81          94
                                                        --------    --------
         Total common shareholder's equity               334,631     333,816
                                                        --------    --------

   Cumulative redeemable preferred stock of subsidiary       344         460

   Long-term debt-net of debt subject to tender          291,752     291,702
   Long-term debt to VUHI                                 49,460      49,460
                                                        --------    --------
         Total capitalization                            676,187     675,438
                                                        --------    --------

Commitments & Contingencies (Notes 4-6)

Current Liabilities
   Accounts payable                                       24,507      27,135
   Payables to other Vectren companies                     1,245       3,390
   Accrued liabilities                                    52,272      33,545
   Short-term borrowings                                     801         874
   Short-term borrowings to VUHI                          71,009      80,664
                                                        --------    --------
     Total current liabilities                           149,834     145,608
                                                        --------    --------

Deferred Income Taxes & Other Liabilities
   Deferred income taxes                                 113,140     112,746
   Deferred credits & other liabilities                   40,581      39,430
                                                        --------    --------
     Total deferred income taxes &
       other liabilities                                 153,721     152,176
                                                        --------    --------
TOTAL LIABILITIES &
SHAREHOLDER'S EQUITY                                    $979,742    $973,222
                                                        ========    ========


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

<PAGE>


                    SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
                         CONDENSED STATEMENTS OF INCOME
                           (Unaudited - In thousands)

                                                          Three Months Ended
                                                               March 31,
                                                        ----------------------
                                                          2002          2001
                                                        --------      --------
OPERATING REVENUES
    Electric revenues                                   $126,801      $ 88,209
    Gas revenues                                          29,606        51,950
                                                        --------      --------
        Total operating revenues                         156,407       140,159
                                                        --------      --------
COST OF OPERATING REVENUES
    Fuel for electric generation                          17,791        17,984
    Purchased electric energy                             59,823        13,153
    Cost of gas sold                                      17,544        41,458
                                                        --------      --------
        Total cost of operating revenues                  95,158        72,595
                                                        --------      --------

TOTAL OPERATING MARGIN                                    61,249        67,564

OPERATING EXPENSES
    Other operating                                       24,693        23,441
    Merger & integration costs                                 -           388
    Depreciation & amortization                           10,983        11,084
    Income taxes                                           6,325         9,041
    Taxes other than income taxes                          3,418         3,626
                                                        --------      --------
        Total operating expenses                          45,419        47,580
                                                        --------      --------

OPERATING INCOME                                          15,830        19,984

Other income - net                                         1,070           859
Interest expense                                           5,756         5,256
                                                        --------      --------
INCOME BEFORE CUMULATIVE EFFECT OF
  CHANGE IN ACCOUNTING PRINCIPLE                          11,144        15,587
                                                        --------      --------
Cumulative effect of change in accounting
    principle-net of tax                                       -         3,938

                                                        --------      --------
NET INCOME                                                11,144        19,525

Preferred stock dividends                                      7           238

                                                        --------      --------
NET INCOME APPLICABLE TO COMMON SHAREHOLDER             $ 11,137      $ 19,287
                                                        ========      ========


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

<PAGE>


                    SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
                       CONDENSED STATEMENTS OF CASH FLOWS
                           (Unaudited - In thousands)

                                                                    Three Months
                                                                 Ended March 31,
                                                       ----------------------
                                                         2002          2001
                                                       --------      --------

NET CASH FLOWS FROM OPERATING ACTIVITIES               $ 34,737      $ 20,990
                                                       --------      --------
CASH FLOWS (REQUIRED FOR) FINANCING ACTIVITIES
    Requirements for:
       Dividends on common stock                        (10,309)       (8,601)
       Redemption of preferred stock                       (116)         (148)
       Dividends on preferred stock                          (7)         (241)
    Net change in short-term borrowings,
     including to VUHI                                   (9,728)         (280)
                                                       --------      --------
         Net cash flows (required for)
              financing activities                      (20,160)       (9,270)
                                                       --------      --------
CASH FLOWS (REQUIRED FOR) INVESTING
     ACTIVITIES
    Requirements for:
       Capital expenditures                             (14,295)       (8,595)
       Other investments                                      -        (1,051)
                                                       --------      --------
         Net cash flows (required for)
               investing activities                     (14,295)       (9,646)
                                                       --------      --------
Net increase in cash & cash equivalents                     282         2,074
Cash & cash equivalents at beginning of period            2,451         1,613
                                                       --------      --------
Cash & cash equivalents at end of period               $  2,733      $  3,687
                                                       ========      ========



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

<PAGE>



                    SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   Organization and Nature of Operations

Southern Indiana Gas and Electric Company (the Company or SIGECO), an Indiana
corporation, provides electric generation, transmission, and distribution
services to Evansville, Indiana, and 74 other communities in 8 counties in
southwestern Indiana and participates in the wholesale power market. The Company
also provides natural gas distribution and transportation services to
Evansville, Indiana, and 64 other communities in 10 counties in southwestern
Indiana. SIGECO is a direct, wholly owned subsidiary of Vectren Utility
Holdings, Inc. (VUHI). VUHI is a direct, wholly owned subsidiary of Vectren
Corporation (Vectren).

Vectren, an Indiana corporation, is an energy and applied technology holding
company headquartered in Evansville, Indiana. Vectren was organized on June 10,
1999 solely for the purpose of effecting the merger of Indiana Energy, Inc.
(Indiana Energy) and SIGCORP, Inc. (SIGCORP). On March 31, 2000, the merger of
Indiana Energy with SIGCORP and into Vectren was consummated with a tax-free
exchange of shares and has been accounted for as a pooling-of-interests in
accordance with Accounting Principles Board (APB) Opinion No. 16 "Business
Combinations."

Vectren's wholly owned subsidiary, VUHI, serves as the intermediate holding
company for its three operating public utilities: Indiana Gas Company, Inc.
(Indiana Gas), formerly a wholly owned subsidiary of Indiana Energy, SIGECO,
formerly a wholly owned subsidiary of SIGCORP, and the Ohio operations, a
utility jointly owned by Indiana Gas and Vectren Energy Delivery of Ohio, Inc.
(VEDO). 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.

2.   Basis of Presentation

The interim 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 footnote
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 condensed financial
statements and related notes should be read in conjunction with the Company's
audited annual financial statements for the year ended December 31, 2001, 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.

Certain reclassifications have been made to prior period financial statements to
conform with the current year classification. These reclassifications have no
impact on previously reported net income.

3.   Impact of Recently Issued Accounting Guidance

SFAS 142
In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets" (SFAS 142). The Company adopted the provisions of SFAS 142 as required,
on January 1, 2002. SFAS 142 changed the accounting for goodwill from an
amortization approach to an impairment-only approach. Thus, amortization of
goodwill that is not included as an allowable cost for rate-making purposes
ceased upon adoption of the statement. This includes goodwill recorded in past
business combinations. Goodwill is to be tested for impairment at a reporting
unit level at least annually.

SFAS 142 also requires the initial impairment review of all goodwill and other
intangible assets within six months of the adoption date. The impairment review
consists of a comparison of the fair value of a reporting unit to its carrying
amount. If the fair value of a reporting unit is less than its carrying amount,
an impairment loss will be recognized. Results of the initial impairment review
are to be treated as a change in accounting principle in accordance with APB
Opinion No. 20 "Accounting Changes." An impairment loss recognized as a result
of an impairment test occurring after the initial impairment review is to be
reported as a part of operations. SFAS 142 also changed certain aspects of
accounting for intangible assets; however, the Company does not have any
significant intangible assets.

Initial impairment reviews to be performed within six months of adoption of SFAS
142 have not been completed, but no impairment is expected.

SFAS 144
In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" (SFAS 144). SFAS 144 develops one accounting
model for all impaired long-lived assets and long-lived assets to be disposed
of. SFAS 144 replaces the existing authoritative guidance in FASB Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" and certain aspects of APB Opinion No. 30, "Reporting
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business."

This new accounting model retains the framework of SFAS 121 and requires that
those impaired long-lived assets and long-lived assets to be disposed of be
measured at the lower of carrying amount or fair value (less cost to sell for
assets to be disposed of), whether reported in continuing operations or in
discontinued operations. Therefore, discontinued operations will no longer be
measured at net realizable value or include amounts for operating losses that
have not yet occurred.

SFAS 144 also broadens the reporting of discontinued operations to include all
components of an entity with operations that can be distinguished from the rest
of the entity and that will be eliminated from the ongoing operations of the
entity in a disposal transaction.

The adoption of SFAS 144 on January 1, 2002, did not have a material impact on
operations.

SFAS 143
In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" (SFAS 143). SFAS 143 requires entities to record the fair value of
a liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value, and the capitalized cost
is depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity either settles the obligation for its recorded amount or
incurs a gain or loss upon settlement. SFAS 143 is effective for fiscal years
beginning after June 15, 2002, with earlier application encouraged. The Company
is currently evaluating the impact that SFAS 143 will have on its operations.

4.   Transactions With Other Vectren Companies

Support Services & Purchases
Vectren and certain subsidiaries of Vectren have provided corporate, general and
administrative services to the Company including legal, finance, tax, risk
management and human resources. The costs have been allocated to the Company
using various allocators, primarily number of employees, number of customers
and/or revenues. Management believes that the allocation methodology is
reasonable and approximates the costs that would have been incurred had the
Company secured those services on a stand-alone basis. For the three months
ended March 31, 2002 and 2001, amounts billed by other wholly owned subsidiaries
of Vectren to the Company were $12.6 million and $11.1 million, respectively.

Vectren Fuels, Inc., a wholly owned subsidiary of Vectren, owns and operates
coal mines from which the Company purchases fuel used for electric generation.
Amounts paid for such purchases for the three months ended March 31, 2002 and
2001 were $13.2 million and $10.4 million, respectively.

Cash Management and Borrowing Arrangements
The Company participates in a centralized cash management program with Vectren,
other wholly owned subsidiaries, and banks which permits funding of checks as
they are presented.

Guarantees of Parent Company Debt
Vectren's three operating utility companies, SIGECO, VEDO, and Indiana Gas are
guarantors of VUHI's $350.0 million commercial paper program, of which
approximately $140.0 million is outstanding at March 31, 2002 and VUHI's $350.0
million unsecured senior notes outstanding at March 31, 2002. These guarantees
are full and unconditional and joint and several. VUHI has no significant
independent assets or operations other than the assets and operations of these
operating utility companies.

5.   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 6 regarding
environmental matters.

6.   Environmental Matters

Clean Air Act
NOx SIP Call Matter
The Clean Air Act (the Act) requires each state to adopt a State Implementation
Plan (SIP) to attain and maintain National Ambient Air Quality Standards (NAAQS)
for a number of pollutants, including ozone. If the United States Environmental
Protection Agency (USEPA) finds a state's SIP inadequate to achieve the NAAQS,
the USEPA can call upon the state to revise its SIP (a SIP Call).

In October 1998, the USEPA issued a final rule "Finding of Significant
Contribution and Rulemaking for Certain States in the Ozone Transport Assessment
Group Region for Purposes of Reducing Regional Transport of Ozone," (63 Fed.
Reg. 57355). This ruling found that the SIP's of certain states, including
Indiana, were substantially inadequate since they allowed for nitrogen oxide
(NOx) emissions in amounts that contributed to non-attainment with the ozone
NAAQS in downwind states. The USEPA required each state to revise its SIP to
provide for further NOx emission reductions. The NOx emissions budget, as
stipulated in the USEPA's final ruling, requires a 31% reduction in total NOx
emissions from Indiana.

In June 2001, the Indiana Air Pollution Control Board adopted final rules to
achieve the NOx emission reductions required by the NOx SIP Call. Indiana's SIP
requires the Company to lower its system-wide NOx emissions to .14 lbs/mmbtu by
May 31, 2004 (the compliance date). This is a 65% reduction from emission levels
existing in 1998 and 1999.

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

The IURC issued an order that (1) approves the Company's proposed project to
achieve environmental compliance by investing in clean coal technology, (2)
approves the Company's cost estimate for the construction, subject to periodic
review of the actual costs incurred, and (3) approves a mechanism whereby, prior
to an electric base rate case, the Company may recover a return on its capital
costs for the project, at its overall cost of capital, including a return on
equity.

Based on the level of system-wide emissions reductions required and the control
technology utilized to achieve the reductions, the current estimated
construction cost ranges from $175.0 million to $195.0 million and is expected
to be expended during the 2001-2004 period. Through March 31, 2002, $30.1
million has been expended. After the equipment is installed and operational,
related additional annual operation and maintenance expenses are estimated to be
between $8.0 million and $10.0 million.

The Company expects the Culley, Warrick and A.B. Brown SCR systems to be
operational by the compliance date. Installation of SCR technology at these
stations 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.

Culley Generating Station Litigation
In the late 1990's, the USEPA initiated an investigation under Section 114 of
the Act of SIGECO's coal-fired electric generating units in commercial operation
by 1977 to determine compliance with environmental permitting requirements
related to repairs, maintenance, modifications, and operations changes. The
focus of the investigation was to determine whether new source review permitting
requirements were triggered by such plant modifications, and whether the best
available control technology was, or should have been used. Numerous electric
utilities were, and are currently, being investigated by the USEPA under an
industry-wide review for compliance. In July 1999, SIGECO received a letter from
the Office of Enforcement and Compliance Assurance of the USEPA discussing the
industry-wide investigation, vaguely referring to an investigation of SIGECO and
inviting SIGECO to participate in a discussion of the issues. No specifics were
noted; furthermore, the letter stated that the communication was not intended to
serve as a notice of violation. Subsequent meetings were conducted in September
and October 1999 with the USEPA and targeted utilities, including SIGECO,
regarding potential remedies to the USEPA's general allegations.

On November 3, 1999, the USEPA filed a lawsuit against seven utilities,
including SIGECO. The USEPA alleges that, beginning in 1992, SIGECO violated the
Act by: (1) making modifications to its Culley Generating Station in Yankeetown,
Indiana without obtaining required permits; (2) making major modifications to
the Culley Generating Station without installing the best available emission
control technology; and (3) failing to notify the USEPA of the modifications. In
addition, the lawsuit alleges that the modifications to the Culley Generating
Station required SIGECO to begin complying with federal new source performance
standards at its Culley Unit 3.

SIGECO believes it performed only maintenance, repair and replacement activities
at the Culley Generating Station, as allowed under the Act. Because proper
maintenance does not require permits, application of the best available control
technology, notice to the USEPA, or compliance with new source performance
standards, SIGECO believes that the lawsuit is without merit, and intends to
vigorously defend itself. Since the filing of this lawsuit, the USEPA has
voluntarily dismissed nearly half of the claims brought in its original
compliant.

The lawsuit seeks fines against SIGECO in the amount of $27,500 per day per
violation. The lawsuit does not specify the number of days or violations the
USEPA believes occurred. The lawsuit also seeks a court order requiring SIGECO
to install the best available emissions technology at the Culley Generating
Station. If the USEPA were successful in obtaining an order, SIGECO estimates
that it would incur capital costs of approximately $40.0 million to $50.0
million to comply with the order. As a result of the NOx SIP call issue, the
majority of the $40.0 million to $50.0 million for best available emissions
technology at Culley Generating Station is included in the $175.0 million to
$195.0 million cost range previously discussed.

The USEPA has also issued an administrative notice of violation to SIGECO making
the same allegations, but alleging that violations began in 1977.

While it is possible that SIGECO could be subjected to criminal penalties if the
Culley Generating Station continues to operate without complying with the
permitting requirements of new source review and the allegations are determined
by a court to be valid, SIGECO believes such penalties are unlikely as the USEPA
and the electric utility industry have a bonafide dispute over the proper
interpretation of the Act. Accordingly, the Company has recorded no accrual and
the plant continues to operate while the matter is being decided.

Information Request
On January 23, 2001, SIGECO received an information request from the USEPA under
Section 114 of the Act for historical operational information on the Warrick and
A.B. Brown generating stations. SIGECO has provided all information requested,
and no further action has occurred.



<PAGE>


7.   Energy Marketing Activities

The Company began entering into forward and option contracts in order to
maximize short-term movement in electricity prices. These contracts are
generally non-asset backed "buy-sell" transactions that are short-term in nature
and expose the Company to limited market risk. The Company has designated these
activities as "trading" activities. Commodity contracts designated as "trading"
are generally settled net with the counter-party and are accounted for at market
value. As of March 31, 2002, these "trading" contracts had a net liability value
of $1.9 million. The Company also enters into transactions "other-than-trading"
that are primarily asset-backed transactions. The net asset value of these
"other-than-trading" contracts was $2.1 million at March 31, 2002.

Contracts recorded at market value are recorded as current or noncurrent assets
or liabilities in the condensed balance sheets depending on their value and on
when the contracts are expected to be settled. Changes in market value are
recorded in purchased electric energy in the condensed statements of income.
Market value is determined using quoted market prices from independent sources
or other valuation techniques.

Forward sale contracts, premiums received for written options, and proceeds
received from exercised options are recorded when settled as electric revenues
in the condensed statements of income. Forward purchase contracts, premiums paid
for purchased options, and proceeds paid for exercising options are recorded
when settled in purchased electric energy in the condensed statements of income.
Contracts with counter-parties subject to master netting arrangements are
presented net in the condensed balance sheets.

All "trading" and "other-than-trading" contracts at March 31, 2002 totaled $11.8
million of prepayments and other current assets and $11.6 million of accrued
liabilities, compared to $5.1 million of prepayments and other current assets
and $1.9 million of accrued liabilities at December 31, 2001. The change in the
net value of "trading" and "other-than-trading" contracts to $0.2 million from
$3.2 million resulted in an unrealized loss of $3.0 million for the three months
ended March 31, 2002.

8.   Segment Reporting

The Company had two operating segments during 2001: (1) Gas Utility Services and
(2) Electric Utility Services. The Gas Utility Services segment includes the
operations of the Company's natural gas distribution business and provides
natural gas distribution and transportation services in southwest Indiana. The
Electric Utility Services segment includes the operations of the Company's power
generating and marketing operations, and electric transmission and distribution
services, which provides electricity to primarily southwestern Indiana.

The following tables provide information about business segments. The Company
makes decisions on finance and dividends at the corporate level.

                                                             Three Months
                                                            Ended March 31,
                                                        ----------------------
In thousands                                              2002          2001
                                                        --------      --------
Operating Revenues
     Electric Utility Services                          $126,801      $ 88,209
     Gas Utility Services                                 29,606        51,950
                                                        --------      --------
        Total operating revenues                        $156,407      $140,159
                                                        ========      ========

Net Income Applicable to
 Common Shareholder
     Electric Utility Services                          $  7,669      $ 16,869
     Gas Utility Services                                  3,468         2,418
                                                        --------      --------
        Net income applicable to
          common shareholder                            $ 11,137      $ 19,287
                                                        ========      ========


                                                       March 31,    December 31,
In thousands                                             2002           2001
                                                       --------       --------
Identifiable Assets
     Electric Utility Services                         $816,134       $811,248
     Gas Utility Services                               163,608        161,974
                                                       --------       --------
        Total identifiable assets                      $979,742       $973,222
                                                       ========       ========


<PAGE>


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

                           Description of the Business

Southern Indiana Gas and Electric Company (the Company or SIGECO), an Indiana
corporation, provides electric generation, transmission, and distribution
services to Evansville, Indiana, and 74 other communities in 8 counties in
southwestern Indiana and participates in the wholesale power market. The Company
also provides natural gas distribution and transportation services to
Evansville, Indiana, and 64 other communities in 10 counties in southwestern
Indiana. SIGECO is a direct, wholly owned subsidiary of Vectren Utility
Holdings, Inc. (VUHI). VUIHI is a direct, wholly owned subsidiary of Vectren
Corporation (Vectren).

Vectren, an Indiana corporation, is an energy and applied technology holding
company headquartered in Evansville, Indiana. Vectren was organized on June 10,
1999 solely for the purpose of effecting the merger of Indiana Energy, Inc.
(Indiana Energy) and SIGCORP, Inc. (SIGCORP). On March 31, 2000, the merger of
Indiana Energy with SIGCORP and into Vectren was consummated with a tax-free
exchange of shares and has been accounted for as a pooling-of-interests in
accordance with Accounting Principles Board (APB) Opinion No. 16 "Business
Combinations."

Vectren's wholly owned subsidiary, VUHI, serves as the intermediate holding
company for its three operating public utilities: Indiana Gas Company, Inc.
(Indiana Gas), formerly a wholly owned subsidiary of Indiana Energy, SIGECO,
formerly a wholly owned subsidiary of SIGCORP, and the Ohio operations, a
utility jointly owned by Indiana Gas and Vectren Energy Delivery of Ohio, Inc.
(VEDO). 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.

                              Results of Operations

The Company's operations are comprised of its Electric Utility Services and Gas
Utility Services segments. The Electric Utility Services segment includes the
Company's power supply operations, power marketing operations, and electric
transmission and distribution services, which operate and maintain six
coal-fired electric power plants and five gas-fired peaking units with a total
of 1,271 megawatts of generating capacity to provide electricity to primarily
southwestern Indiana. The Gas Utility Services segment includes the operations
of the Company's natural gas distribution business and provides natural gas
distribution and transportation services in southwestern Indiana. The results of
operations for the three months ended March 31, 2002 and 2001 are as follows:

In thousands                                                2002        2001
                                                          --------    --------
Net income applicable to common shareholder,
       as reported                                        $ 11,137    $ 19,287
     Merger and integration costs-net of tax                     -         241
     Cumulative effect of change in accounting
            principle-net of tax                                 -      (3,938)
                                                          --------    --------
Net income applicable to common shareholder
     before nonrecurring items                            $ 11,137    $ 15,590
                                                          ========    ========


Net Income Applicable to Common Shareholder

For the three months ended March 31, 2002, net income applicable to common
shareholder decreased $8.1 million primarily due to fluctuations in fair value
of certain power marketing contracts and the effects of weather 10% warmer than
the prior year offset somewhat by increased retail electric margin and the
effects of lower gas costs.

Impact of SFAS 133 on Power Marketing Operations
For the three months ended March 31, 2002, net income has decreased $9.2 million
when compared to the prior year due to the adoption and continued application of
Statement of Financial Accounting Standard No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS 133) which was adopted on January 1,
2001. The total impact of SFAS 133 for the three months ended March 31, 2002 is
a loss of $3.0 million ($1.9 million after tax), which is included in purchased
electric energy. This compares to a gain of $11.8 million ($7.3 million after
tax) for the three months ended March 31, 2001. This total includes the
cumulative effect of change in accounting principle of $6.6 million ($3.9
million after tax) and unrealized gains totaling $5.5 million ($3.4 million
after tax) arising from the change in market value from the date of adoption
through March 31, 2001, which is included in purchased electric energy.

New Accounting Principles

SFAS 142

In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets" (SFAS 142). The Company adopted the provisions of SFAS 142, as required
on January 1, 2002. SFAS 142 changed the accounting for goodwill from an
amortization approach to an impairment-only approach. Thus, amortization of
goodwill that is not included as an allowable cost for rate-making purposes
ceased upon adoption of the statement. This includes goodwill recorded in past
business combinations. Goodwill is to be tested for impairment at a reporting
unit level at least annually.

SFAS 142 also requires the initial impairment review of all goodwill and other
intangible assets within six months of the adoption date. The impairment review
consists of a comparison of the fair value of a reporting unit to its carrying
amount. If the fair value of a reporting unit is less than its carrying amount,
an impairment loss will be recognized. Results of the initial impairment review
are to be treated as a change in accounting principle in accordance with APB
Opinion No. 20 "Accounting Changes." An impairment loss recognized as a result
of an impairment test occurring after the initial impairment review is to be
reported as a part of operations. SFAS 142 also changed certain aspects of
accounting for intangible assets; however, the Company does not have any
significant intangible assets.

Initial impairment reviews to be performed within six months of adoption of SFAS
142 have not been completed, but no impairment is expected.

SFAS 143

In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" (SFAS 143). SFAS 143 requires entities to record the fair value of
a liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value, and the capitalized cost
is depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity either settles the obligation for its recorded amount or
incurs a gain or loss upon settlement. SFAS 143 is effective for fiscal years
beginning after June 15, 2002, with earlier application encouraged. The Company
is currently evaluating the impact that SFAS 143 will have on its operations.

SFAS 144

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" (SFAS 144). SFAS 144 develops one accounting
model for all impaired long-lived assets and long-lived assets to be disposed
of. SFAS 144 replaces the existing authoritative guidance in FASB Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" and certain aspects of APB Opinion No. 30, "Reporting
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business."

This new accounting model retains the framework of SFAS 121 and requires that
those impaired long-lived assets and long-lived assets to be disposed of be
measured at the lower of carrying amount or fair value (less cost to sell for
assets to be disposed of), whether reported in continuing operations or in
discontinued operations. Therefore, discontinued operations are no longer
measured at net realizable value or include amounts for operating losses that
have not yet occurred.

SFAS 144 also broadens the reporting of discontinued operations to include all
components of an entity with operations that can be distinguished from the rest
of the entity and that will be eliminated from the ongoing operations of the
entity in a disposal transaction.

The adoption of SFAS 144 on January 1, 2002 did not materially impact
operations.

Significant Fluctuations

Utility Margin (Operating Revenues Less Cost of Gas Sold, Fuel for Electric
Generation, & Purchased Electric Energy)
---------------------------------------------------------------------------

Electric Utility Margin
Electric Utility margin for the three months ended March 31, 2002 of $49.2
million decreased $7.8 million, or 14%, from 2001 primarily due to reductions in
margin to reflect wholesale power marketing purchase and sale contracts at
current market values. The decrease in margin from quarter to quarter was $8.5
million. This decrease was offset by increased margins from retail sales. Margin
from retail sales increased $3.3 million, or 8%, over the previous year. The
increase in retail margin is attributable to a 2% increase in megawatt hours
sold, consistent costs for fuel and purchased power used for generation, and a
cash return on NOx compliance expenditures.

The Company enters into forward and option contracts in order to maximize
short-term movement in electricity prices. These contracts are generally
non-asset backed "buy-sell" transactions that are short-term in nature and
expose the Company to limited market risk. The Company has designated these
activities as "trading" activities. The Company also enters into asset-backed
transactions that are generally longer term in nature. As a result of increased
"trading" and "other-than-trading" activity, purchased electric energy has
increased $46.6 million during the three months ended March 31, 2002 compared to
2001. These activities increased wholesale revenues from $30.0 million to $64.9
million and megawatt hours sold into the wholesale market from 0.9 million to
2.6 million.

Gas Utility Margin
Gas Utility margin for the three months ended March 31, 2002 of $12.1 million
increased $1.6 million, or 15%, compared to 2001. The increase is primarily due
to the return of volumes lost in the prior year due to the effects of the higher
gas costs and the decreased cost of unaccounted for gas. These favorable impacts
were offset somewhat by weather 10% warmer than the prior year and 12% warmer
than normal. The increased volumes attributed to lower gas costs and the effects
of warmer weather resulted in an overall 9% decrease in total throughput from
11.9 MMDth to 10.8 MMDth.

Cost of gas sold was $17.5 million for the three months ended March 31, 2002 and
$41.5 million in 2001. Cost of gas sold decreased $23.9 million, or 58%, in
2002. The changes are primarily due to fluctuations in average per unit
purchased gas costs and the volume of dekatherms sold. The total average cost
per dekatherm of gas purchased by the Company was $4.62 and $6.55 for the three
months ended March 31, 2002 and 2001, respectively.

Operating Expenses (excluding Cost of Gas Sold, Fuel for Electric Generation, &
Purchased Electric Energy)
-------------------------------------------------------------------------------

Other Operating
Other operating expenses for the three months ended March 31, 2002 increased
$1.3 million, or 5%, compared to 2001. The 2002 increase results, primarily,
from charges for the use of corporate assets.

Income Tax Expense
Federal and state income taxes decreased $2.7 million for the three months ended
March 31, 2002. The decrease results from lower pretax earnings and a lower
effective rate, which decreased from 37% to 36%.

Interest Expense

Interest expense increased $0.5 million for the three months ended March 31,
2002. The increase was due primarily to increased borrowings resulting from NOx
compliance capital expenditures.


Environmental Matters

Clean Air Act

NOx SIP Call Matter
The Clean Air Act (the Act) requires each state to adopt a State Implementation
Plan (SIP) to attain and maintain National Ambient Air Quality Standards (NAAQS)
for a number of pollutants, including ozone. If the United States Environmental
Protection Agency (USEPA) finds a state's SIP inadequate to achieve the NAAQS,
the USEPA can call upon the state to revise its SIP (a SIP Call).

In October 1998, the USEPA issued a final rule "Finding of Significant
Contribution and Rulemaking for Certain States in the Ozone Transport Assessment
Group Region for Purposes of Reducing Regional Transport of Ozone," (63 Fed.
Reg. 57355). This ruling found that the SIP's of certain states, including
Indiana, were substantially inadequate since they allowed for NOx emissions in
amounts that contributed to non-attainment with the ozone NAAQS in downwind
states. The USEPA required each state to revise its SIP to provide for further
NOx emission reductions. The NOx emissions budget, as stipulated in the USEPA's
final ruling, requires a 31% reduction in total NOx emissions from Indiana.

In June 2001, the Indiana Air Pollution Control Board adopted final rules to
achieve the NOx emission reductions required by the NOx SIP Call. Indiana's SIP
requires the Company to lower its system-wide NOx emissions to .14 lbs./mmbtu by
May 31, 2004 (the compliance date). This is a 65% reduction from emission levels
existing in 1998 and 1999.

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

The IURC issued an order that (1) approves the Company's proposed project to
achieve environmental compliance by investing in clean coal technology, (2)
approves the Company's cost estimate for the construction, subject to periodic
review of the actual costs incurred, and (3) approves a mechanism whereby, prior
to an electric base rate case, the Company may recover a return on its capital
costs for the project, at its overall cost of capital, including a return on
equity.

Based on the level of system-wide emissions reductions required and the control
technology utilized to achieve the reductions, the current estimated
construction cost ranges from $175.0 million to $195.0 million and is expected
to be expended during the 2001-2004 period. Through March 31, 2002,
approximately $30.1 million has been expended. After the equipment is installed
and operational, related additional annual operation and maintenance expenses
are estimated to be between $8.0 million and $10.0 million.

The Company expects the Culley, Warrick and A.B. Brown SCR systems to be
operational by the compliance date. Installation of SCR technology at these
stations 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.

Culley Generating Station Litigation
In the late 1990's, the USEPA initiated an investigation under Section 114 of
the Act of SIGECO's coal-fired electric generating units in commercial operation
by 1977 to determine compliance with environmental permitting requirements
related to repairs, maintenance, modifications, and operations changes. The
focus of the investigation was to determine whether new source review permitting
requirements were triggered by such plant modifications, and whether best
available control technology was, or should have been, used. Numerous electric
utilities were, and are currently, being investigated by the USEPA under an
industry-wide review for compliance. In July 1999, SIGECO received a letter from
the Office of Enforcement and Compliance Assurance of the USEPA discussing the
industry-wide investigation, vaguely referring to an investigation of SIGECO and
inviting SIGECO to participate in a discussion of the issues. No specifics were
noted; furthermore, the letter stated that the communication was not intended to
serve as a notice of violation. Subsequent meetings were conducted in September
and October 1999 with the USEPA and targeted utilities, including SIGECO,
regarding potential remedies to the USEPA's general allegations.

On November 3, 1999, the USEPA filed a lawsuit against seven utilities,
including SIGECO. The USEPA alleges that, beginning in 1992, SIGECO violated the
Act by: (1) making modifications to its Culley Generating Station in Yankeetown,
Indiana, without obtaining required permits; (2) making major modifications to
the Culley Generating Station without installing the best available emission
control technology; and (3) failing to notify the USEPA of the modifications. In
addition, the lawsuit alleges that the modifications to the Culley Generating
Station required SIGECO to begin complying with federal new source performance
standards at its Culley Unit 3.

SIGECO believes it performed only maintenance, repair, and replacement
activities at the Culley Generating Station, as allowed under the Act. Because
proper maintenance does not require permits, application of the best available
emission control technology, notice to the USEPA, or compliance with new source
review standards, SIGECO believes that the lawsuit is without merit and intends
to vigorously defend itself. Since the filing of this lawsuit, the USEPA has
voluntarily dismissed nearly half of the claims brought in its original
compliant.

The lawsuit seeks fines against SIGECO in the amount of $27,500 per day per
violation. The lawsuit does not specify the number of days or violations the
USEPA believes occurred. The lawsuit also seeks a court order requiring SIGECO
to install the best available control technology at the Culley Generating
Station. If the USEPA were successful in obtaining an order, SIGECO estimates
that it would incur capital costs of approximately $40.0 million to $50.0
million to comply with the order. As a result of the NOx SIP call issue, the
majority of the $40.0 million to $50.0 million for best available emissions
technology at Culley Generating Station is included in the $175.0 million to
$195.0 million cost range previously discussed.

The USEPA has also issued an administrative notice of violation to SIGECO making
the same allegations, but alleging that violations began in 1977.

While it is possible that SIGECO could be subjected to criminal penalties if the
Culley Generating Station continues to operate without complying with the
permitting requirements of new source review and the allegations are determined
by a court to be valid, SIGECO believes such penalties are unlikely as the USEPA
and the electric utility industry have a bonafide dispute over the proper
interpretation of the Act. Accordingly, the Company has recorded no accrual, and
the plant continues to operate while the matter is being decided.

Information Request
On January 23, 2001, SIGECO received an information request from the USEPA under
Section 114 of the Act for historical operational information on the Warrick and
A.B. Brown generating stations. SIGECO has provided all information requested,
and no further action has occurred.

                               Financial Condition

The Company's equity capitalization objective is 40-55% of total capitalization.
This objective may have varied, and will vary, depending on particular business
opportunities and seasonal factors that affect the Company's operation. The
Company's equity component was 49% of total capitalization, including long-term
debt subject to tender, at both March 31, 2002 and December 31, 2001.

Short-term cash working capital is required primarily to finance customer
accounts receivable, unbilled utility revenues resulting from cycle billing, gas
in underground storage, and capital expenditures. Short-term borrowings tend to
be greatest during the summer when accounts receivable and unbilled utility
revenues related to electricity are highest and gas storage facilities are being
refilled.

The Company expects the majority of its capital expenditures and debt security
redemptions to be provided by internally generated funds; however, additional
financing may be required due to significant capital expenditures for NOx
compliance equipment.

SIGECO's credit ratings on outstanding secured debt at March 31, 2002 are A-/A1
as rated by Standard and Poor's and Moody's, respectively.

Cash Flow From Operations

The Company's primary source of liquidity to fund working capital requirements
has been cash generated from operations, which totaled approximately $34.7
million and $21.0 million, for the three months ended March 31, 2002 and 2001,
respectively.

Cash flow from operations increased during the three months ended March 31, 2002
compared to 2001 by $13.7 million due primarily to favorable changes in working
capital accounts due to a return to lower gas prices and fluctuations in
non-cash charges related to SFAS 133.

Financing Activities

Sources & Uses of Liquidity

SIGECO mainly relies on the short-term borrowing arrangements of VUHI for its
short-term working capital needs. The intercompany credit line totals $150.0
million, but is limited to VUHI's available capacity ($210.0 million at March
31, 2002) and is subject to the same terms and conditions as VUHI's commercial
paper program. Borrowings outstanding at March 31, 2002 were $71.0 million. At
March 31, 2002, the Company has approximately $10.0 million of short-term
borrowing capacity with third parties to supplement its intercompany borrowing
arrangements, of which $9.2 million is available.

Vectren's three operating utility companies, SIGECO, VEDO, and Indiana Gas are
guarantors of VUHI's $350.0 million commercial paper program, of which
approximately $140.0 million is outstanding at March 31, 2002 and VUHI's $350.0
million unsecured senior notes outstanding at March 31, 2002. VUHI has no
significant independent assets or operations other than the assets and
operations of these operating utility companies. These guarantees are full and
unconditional and joint and several. Under the terms of VUHI's commercial paper
program, it must maintain a rating of better than BB+/Ba1.

Financing Cash Flow
Cash flow required for financing activities of $20.2 million for the three
months ended March 31, 2002 includes $9.7 million of reductions in borrowings,
$10.3 million in common stock dividends and $0.1 million paid for the redemption
of preferred stock. This is an increase in cash requirements of $10.9 million
over the prior year due primarily due to the increased operating cash flows,
which were utilized to pay down short-term borrowings and increased dividends.

Other Financing Transactions
In January 2002, the Company redeemed 1,160 shares of SIGECO's 8.5% preferred
stock per its stated terms of $100 per share, plus accrued and unpaid dividends.
Prior to the redemption, there were 4,597 shares outstanding.

Capital Expenditures & Other Investment Activities

Cash required for investing activities of $14.3 million for the three months
ended March 31, 2002 is entirely for capital expenditures. Investing activities
for the three months ended March 31, 2001 were $9.6 million. The increase is
attributable NOx compliance expenditures and expenditures for the construction
of an 80 megawatt peaking unit.

Planned Capital Expenditures

New construction, normal system maintenance and improvements, and information
technology investments needed to provide service to a growing customer base will
continue to require substantial expenditures. Capital expenditures for the
remainder of 2002 are estimated at $75.6 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, including, but
not limited to Vectren's realization of net merger savings, 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 included, among others, the following:

     |X|  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.

     |X|  Increased competition in the energy environment including effects of
          industry restructuring and unbundling.

     |X|  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.

     |X|  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 natural gas
          transmission, gathering and processing, and similar entities with
          regulatory oversight.

     |X|  Economic conditions including the effects of an economic downturn,
          inflation rates, and monetary fluctuations.

     |X|  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.

     |X|  Availability or cost of capital, resulting from changes in the
          Company, including its security ratings, changes in interest rates,
          and/or changes in market perceptions of the utility industry and other
          energy-related industries.

     |X|  Employee workforce factors including changes in key executives,
          collective bargaining agreements with union employees, or work
          stoppages.

     |X|  Legal and regulatory delays and other obstacles associated with
          mergers, acquisitions, and investments in joint ventures.

     |X|  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.

     |X|  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.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market 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.

Commodity Price Risk

The Company's regulated operations have limited exposure to commodity price risk
for purchases and sales of natural gas and electric energy for its retail
customers due to current Indiana regulations, which subject to compliance with
applicable state regulations, allow for recovery of such purchases through
natural gas and fuel cost adjustment mechanisms.

The Company does engage in limited, wholesale power marketing activities that
may expose it to commodity price risk associated with fluctuating electric power
prices. The Company's wholesale power marketing activities manage the
utilization of its available electric generating capacity as well as other
trading activities that maximize short-term movement in electricity prices.
These operations enter into forward and option contracts that commit the Company
to purchase and sell commodities in the future.

Commodity price risk results from forward sale and option contracts that commit
the Company to deliver commodities on specified future dates. Power marketing
uses planned unutilized generation capability and forward purchase contracts to
protect certain sales transactions from unanticipated fluctuations in the price
of electric power, and periodically, will use derivative financial instruments
to protect its interests from unplanned outages and shifts in demand.

Open positions in terms of price, volume and specified delivery points may occur
to a limited extent and are managed using methods described above and frequent
management reporting.

The Company enters into forward and option contracts in order to maximize
short-term movement in electricity prices. These contracts are generally
non-asset backed "buy-sell" transactions that are short-term in nature and
expose the Company to limited market risk. The Company has designated these
activities as "trading" activities.

The net assets from all "trading" and "other-than-trading" contracts decreased
from $3.2 million at December 31, 2001 to $0.2 million at March 31, 2002. For
the three months ended March 31, 2002 the unrealized loss associated with
"trading" and "other-than-trading" contracts was $3.0 million.

Market risk is measured by management as the potential impact on pre-tax
earnings resulting from a 10% adverse change in the forward price of commodity
prices on market sensitive financial instruments (all contracts not expected to
be settled by physical receipt or delivery). For the three months ended March
31, 2002 and 2001, a 10% adverse change in the forward prices of electricity and
natural gas on market sensitive financial instruments would have decreased
pre-tax earnings by approximately $1.6 million and $0.1 million, respectively.

Interest Rate Risk

Interest rate risk is not significantly different from the information as set
forth in Item 7A Quantitative and Qualitative Disclosures About Market Risk
included in the Company's 2001 Form 10-K and is therefore not presented herein.

Other Risks

Counter-party credit and market risks are not significantly different from the
information as set forth in Item 7A Quantitative and Qualitative Disclosures
About Market Risk included in the Company's 2001 Form 10-K and is therefore not
presented herein.




<PAGE>


                           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 6 regarding
environmental matters.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

None.

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

On January 24, 2002, SIGECO filed a Current Report on Form 8-K with respect to
the release of financial information to the investment community regarding
Vectren's results of operations, financial position and cash flows for the three
and twelve month periods ended December 31, 2001. The financial information was
released to the public through this filing.
     Item 5.  Other Events
     Item 7.  Exhibits
               99.1 - Press Release - Fourth Quarter 2001 Vectren Corporation
                      Earnings
               99.2 - Cautionary Statement for Purposes of the "Safe Harbor"
                      Provisions of the Private Securities Litigation Reform Act
                      of 1995

On March 26, 2002, SIGECO filed a Current Report on Form 8-K with respect to its
decision to replace Arthur Andersen LLP as the Company's independent auditors,
effective upon completion of a transition period which is expected to extend
through the conclusion of their review of the financial results of the Company
for the first quarter of 2002.
     Item 4. Changes in Registrant's Certifying Accountant.
     Item 7. Exhibits

               16   - Letter from Arthur Andersen LLP to the Securities and
                    Exchange Commission, dated March 26, 2002.
               99 - Letter to Vectren Corporation Shareholders dated March 22,
                    2002


<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.




                                                SOUTHERN INDIANA GAS
                                                AND ELECTRIC COMPANY
                                                    Registrant



        May 14, 2002                            /s/Jerome A. Benkert, Jr.
                                                -------------------------
                                                Jerome A. Benkert, Jr.
                                                Executive Vice President and
                                                Chief Financial Officer
                                                (Principal Financial Officer)


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