AES Indiana has reached an agreement with the city of Indianapolis in the company’s request to raise electric rates.
The proposed settlement — which also includes Walmart, Rolls-Royce and other companies — would result in a monthly bill increase of about $10 for a typical residential customer by 2027, according to AES.
The original request from AES would increase monthly bills by about $21.
But the agreement is not final. The Indiana Utility Regulatory Commission can approve, deny or modify settlements. And other companies or organizations that are part of the case can testify against the agreement.
Some have already criticized the deal.
“The settlement agreement filed by AES and other parties shows the utility’s initial request was inflated and unnecessary,” Indiana Utility Consumer Counselor Abby Gray said in a statement. Gray’s office represents the public in rate cases.
The office has already recommended denying AES’ request, and said that AES should instead reduce rates for customers.
AES Indiana’s president, Brandi Davis-Handy, said in a statement that the company has listened to feedback and tried to minimize the financial impact on customers.
“We have a deep commitment to operating efficiently and keeping rates as low as possible,” the statement said, in part.
Why settle?
The city’s Department of Public Works said in a statement that the settlement would save taxpayers millions of dollars.
“Our team went to bat on behalf of taxpayers,” DPW Director Todd Wilson said, “and the result is a win for the community.”
Get the backstory
As part of the agreement, AES would agree to not collect about $47 million in uncollected expenses and late fees from the company’s botched rollout of a new billing system in 2023.
AES also agreed to reduce its profit margin to 9.75%, as opposed to the 10.7% the company originally asked for. The profit margin is the amount of money shareholders can get based on how much money the company makes.
And AES agreed to not raise base rates again until at least 2030. The base rate makes up most of your electric bill and is determined by how much electricity you use, plus a fixed fee.
Pushback: ‘Hoosiers have had enough’
In addition to the Office of Utility Consumer Counselor, a consumer advocacy group has criticized the proposed settlement.
“Hoosiers have had enough with AES Indiana’s poor service, soaring bills, and backroom deals,” said Kerwin Olson, executive director of the Citizens Action Coalition, in a statement. “It’s time for the IURC to send a message and restore affordability and accountability at our out-of-control monopoly utilities.”
Eastside City-County Councilor Jesse Brown focused on the city’s role in the settlement.
“The City seems to agree with AES that residential customers — that’s you and me — should be even MORE responsible for their profits,” Brown, a Democrat, posted on X.
A City-County Council committee voted in September to oppose a rate increase.
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Mirror Indy reporter Tyler Fenwick covers housing and labor. Contact him at 317-766-1406 or tyler.fenwick@mirrorindy.org. Follow him on X @ty_fenwick and Bluesky @tyfenwick.bsky.social.
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