Gov. Mike Braun asked state regulators to reconsider their decision to greenlight a $71 million rate increase for AES Indiana, doubling down on his condemnation of a move that could leave Indianapolis residents with higher electrical bills for years. 

Braun wrote in a June 18 news release that he had asked Indiana Utility Counselor Abby Gray, who heads the office representing ratepayers in proceedings before the Indiana Utility Regulatory Commission, to petition for a rehearing of the AES rate case. 

Gray indicated in the release that her office would submit the petition shortly. No petition had been posted on the IURC’s online docket as of this story’s publication.

The rate increase, which was approved by the IURC on June 17, was substantially less than the $192 million increase that AES initially requested. It was also less than the amount proposed in a settlement last October between AES and major electricity consumers. 

(INDIANA CAPITAL CHRONICLE) – The Indiana Utility Regulatory Commission voted 3-1 Wednesday to approve a $71 million electricity rate increase for AES Indiana customers.

That is about 37% of what the utility initially requested and lower than a settlement agreement proposed in October.

Neither Gov. Mike Braun nor consumer advocates are happy with the outcome.

“My top priority is affordability, which is why I am deeply disappointed by the IURC’s approval of another AES rate increase,” he said. “Hoosiers have spent years tightening their belts and making tough financial decisions. It’s time for utility companies to do the same.”

Members of the commission didn’t explain their votes Wednesday. IURC Chair Andy Zay focused his remarks on the process.

“There’s a lot of eyes on this order and what we’re doing today,” he said. “What is before you on the floor is a nearly a year’s worth of work, evidence, deliberations, and considerations that bring us to this moment in this decision. None of this was taken lightly. I want to thank my colleagues for the patience and working through this amongst the auspice of affordability, which is certainly a hot topic now, as well as the resiliency, reliability that we see in this increased demand in electricity.”

The Office of Utility Consumer Counselor last year recommended that state regulators deny AES Indiana’s request for a $193 million base rate increase — instead proposing a $21 million reduction in current rates.

“The AES rate order issued today is an outrage and Hoosiers deserve better!” Counselor Abby Gray said in a statement Wednesday. “Governor Braun has made it clear that ratepayer affordability is a priority, far more than just a ‘hot topic’ as described by the chairman of the IURC today. This order fails the governor’s call to overhaul how utilities are regulated in order to lower bills for ratepayers.”

Gray’s office represents Hoosier ratepayers in regulatory cases.

“The order approves a substantial profit margin for shareholders in addition to a rate increase for customers,” she continued. “It even requires ratepayers to pay approximately $3 million to AES lawyers and experts.”

AES Indiana provides electricity service to about 490,000 homes and businesses in Indianapolis and some nearby areas.

The utility originally sought $193 million in rate increases. The previously proposed settlement agreement dropped that to $91 million, while the final, approved settlement agreement lands at $71 million.

Three IURC members supported the increase: Zay, David Veleta and David Ziegner.

Commissioner Bob Deig voted no. A fifth member, Anthony Swinger, recused himself because he worked on the case previously when he was on the consumer counselor’s office staff.

Ben Inskeep, program director for ratepayer advocacy group Citizens Action Coalition, said utilities across the country often ask for a larger increase than they need, knowing that regulators will disallow “roughly half” of it.

“The latest AES Indiana fuel adjustment clause proceeding shows AES Indiana is actually not only earning all of their allowed profit but over-earning by $19 million their return amount,” he said. “They’re already extremely financially successful at this moment in time, so it’s rather bizarre to even get an extra $71 million dollars approved here.”

Inskeep also noted that the increases will fall disproportionately on residential customers over commercial and industrial users.

Brandi Davis-Handy, president of AES Indiana, said the company has maintained some of the lowest rates in the state for more than a decade “through disciplined planning and a focus on efficiency. We applied the same approach here by working closely with stakeholders to make balanced decisions that keep the system reliable, limit customer impact, and align with the state’s energy pillars.”

AES said for a typical residential customer using 1,000 kilowatt-hours per month, the increase will be less than $5 per month per phase. Phase one rates will be implemented in July 2026 and phase two rates will be implemented in January 2027.

The final order says the utility “will not seek to implement a change in basic rates and charges as a result of its next base rate case before January 1, 2030.”

A new law, however, requires all utilities to file a multi-year rate case in 2029, though implementation wouldn’t happen until 2030.