Greg Lockhart has lived on the southwest side of Indianapolis for nearly 30 years. He’s noticed his electric bill ticking up past $600 and it’s recently skyrocketed.
“Three weeks ago, I paid $990,” Lockhart said. “And then two weeks ago, on Saturday, I got a bill for a disconnect for almost $2,000.”
Now, Lockhart is concerned his bill could get even higher as an investor group finalizes its $33.4 billion purchase of AES Corporation. The team, referred to as The Consortium, includes BlackRock, a global investment firm that’s beefing up its data center portfolio.
If you go
The Indiana Utility Regulatory Commission will hold an investigative inquiry on energy affordability among Indiana’s five largest investor-owned utilities, including AES Indiana.
🗓️ 9:45 a.m. to 4:00 p.m. March 24
📍 PNC Center, 101 W. Washington St., in Room 222 or online
The sale comes at a time when many electrical grids nationwide are struggling to meet demand, making it more difficult for data center companies to power their facilities.
Meanwhile, AES Indiana is considering substantial infrastructure upgrades to accommodate Seattle-based Sabey Data Centers, which is vying to build a 130-acre facility in Decatur Township. Sabey has agreed to commitments the city would use to keep Sabey accountable, including paying for a new substation “and associated electrical infrastructure in coordination with local electric utilities.”
Southsiders have been concerned the promise would disappear once BlackRock’s purchase goes through, but the city’s Department of Metropolitan Development said the commitments have been updated to ensure Sabey would be financially responsible for any electrical changes regardless of the provider’s name.
Still, some residents fear the partnership could be a conflict of interest between Sabey and BlackRock since the investment firm already uses Sabey’s technology. They worry BlackRock will leverage its soon-to-be utility, AES, and jack up prices for consumers to help pay for the company’s data center endeavors.
James Coleman specializes in energy law at the University of Minnesota. He said the impact isn’t always clear. In theory, he said residential customers may end up with smaller utility bills, but it’s not a guarantee.
“Every time the rate is set for data centers, it’s a super high-stakes decision because it’s just so much power,” Coleman said. “It certainly can significantly benefit other electricity users and, in fact, I think that should be the normal expectation … But if it’s done wrong, it might not.”
The backstory
Many residents are wary of data centers due to concerns about increased utility costs, pollution and a lack of transparency. Last year, a company, later revealed to be Google, failed to receive community support for its data center proposal in Franklin Township.
Sabey has tried to implement a different approach as the company is one step away from its final approval, which city zoning officials will decide March 18. With over two decades of experience building and leasing data facilities for other companies, Sabey has worked to have more conversations with residents.
But a key question remains unanswered. Sabey has told residents it hasn’t selected a client for the proposed facility on the southwest side of Indianapolis. It’s unclear if residents will ever know since many of those agreements are often shrouded in non-disclosure agreements.
The secrecy has caused residents to speculate whether the company will expand its previous relationship with BlackRock, which has praised its partnership with Sabey in another project.
“The entire Sabey organization embraced our unique data center architecture and aggressive project schedule, meeting our design objectives on time and under budget,” states Barry Novick, BlackRock’s Global Data Center Manager, in a quote that appears to have been removed recently from Sabey’s website. “This partnership approach provided an outcome that a traditional ’arms-length’ relationship could not have duplicated.”
Now, residents fear BlackRock could abuse its power to give Sabey a good deal with the local utility.
“Indiana residents and small businesses cannot choose another provider if prices rise,” wrote Emma Hart, a Protect Decatur Township organizer, in a press release. “When a massive financial firm like BlackRock gains control over a utility like AES Indiana while also being deeply involved in financing hyperscale data centers through relationships with operators like Sabey, it creates a system where the firm benefits both as utility owner/investor and as a major power customer.”
During a community meeting last year, John Sabey implied the company wouldn’t receive any benefits if the acquisition goes through.
“They’re not gonna do us any favors, I can assure you that,” Sabey said.
A statement on AES’ website tried to quell concerns about growing bills by discussing its commitment to local communities.
“The Consortium has deep experience investing in energy infrastructure businesses and shares AES’ commitment to safety, affordability and customer service,” the statement said.
Who declares a conflict of interest?
Residents want government officials to step in as they point to BlackRock’s previous financial and business history, but it’s unclear if anything can be done.
The Indiana Utility Regulatory Commission exists to be an impartial decision-maker when conflicts arise between utility providers and their customers, but declined to comment on the relationship between BlackRock and Sabey since it’s currently reviewing a case involving AES.
Neither Sabey nor BlackRock responded to Mirror Indy’s interview requests.
Decatur Township resident Kristyn Stoddard said her electricity bill hasn’t fluctuated nearly as much as other neighbors, but she has noticed a roughly $15 uptick every six months. She wants government officials to stop Sabey’s proposal before utility bills get even higher. City-county councilor Josh Bain, who represents the area, has not publicly opposed the project.
“I don’t see how everybody that’s had their hand in it that’s supposed to be one of our representatives can look the other way, constantly, how they are,” Stoddard said.
Daniel Elliot, the Indiana state treasurer, has been determined to stop AES’ acquisition because he believes the company will saddle residents with higher costs. But, whether it’s a conflict of interest for BlackRock and Sabey to work together, isn’t up to him to decide.
Elliot said it isn’t necessarily bad that companies want to expand in Indiana, but it shouldn’t hurt Hoosiers.
“It can’t be on the backs of a single mom who’s just trying to make sure she can pay her electric bill and pay her mortgage,” Elliot said. “And we don’t want her to have to choose between the two.”
The Federal Trade Commission could potentially step in to make a decision, but Elliot said it’s unclear if or when that could happen. The FTC declined to comment on the purchase of AES, as well as BlackRock and Sabey’s previous partnership.
It remains unclear what effect the sale and the data center projects will have on utility bills. That uncertainty has been tough on residents such as Lockhart. He paid off his house two years ago and thought his bills would be easier on his wallet.
“I thought, ‘Man, it’s gonna be easy to survive now,’” Lockhart said. “Nope, I’ve got a new ‘mortgage’ via AES.”
Mirror Indy, a nonprofit newsroom, is funded through grants and donations from individuals, foundations and organizations.
Mirror Indy reporter Elizabeth Gabriel covers the south side of Marion County. Contact her at elizabeth.gabriel@mirrorindy.org. Follow her on X at @_elizabethgabs.
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