Gov. Mike Braun wants energy affordability to be a public priority. Yet the AES Indiana rate case shows how hard it is to see that priority at work. AES Indiana is part of the Virginia-based AES Corporation, and according to its website, is one of the world’s largest global power companies.
On Wednesday, the Indiana Utility Regulatory Commission voted 3-1 to approve a $71 million electricity rate increase. Former state Sen. Andy Zay of Huntington, the commission’s chairman and a Braun appointee, was one of the three members to approve the hike.
The utility — formerly Indianapolis Power & Light Co. — asked state regulators for nearly $193 million in additional annual revenue. The Office of Utility Consumer Counselor, which represents ratepayers, argued AES customers should not pay more at all. It said current rates should fall by about $21 million.
AES can call the order a win for consumers because the final increase is only about 37% of what the utility initially sought. But that framing deserves skepticism. Asking high and settling lower is an old negotiating tactic. It should not become the public’s measure of consumer protection.
The question is not whether AES got less than it wanted. The question is whether customers received the protection they were promised.
AES says the increase will amount to less than $5 a month in each phase for a typical residential customer. But that increase does not land on a blank bill. Citizens Action Coalition has estimated the average AES residential electric bill at about $146 a month, meaning one phase could push the average bill toward $151 and a second toward $156.
To his credit, Braun objected to the decision.
“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.”
The AES decision also is not inevitable.
Indiana Michigan Power says its Indiana customers will see bills fall by about $6 a month beginning with the June billing cycle. It shows that affordability cannot mean every major rate case ends with customers paying more.
Indiana needs utilities capable of delivering power safely and consistently. But monopoly utilities are not ordinary businesses. Customers cannot shop around for another electric company if they dislike the bill.
That is why the burden of proof should be unmistakably high. Regulators should not merely split the difference between a utility’s request and the consumer advocate’s objection. They should explain, in plain language, why each major cost is necessary, what was rejected and how affordability shaped the final order.
This matters even more as Indiana courts large energy users such as data centers. AES says this case does not include costs for such projects, and future proposals may require separate review. But Hoosiers have reason to ask whether economic development will eventually show up in household utility bills.
The governor says affordability matters. His appointees need to get on the same page.