AES rate hike case heats up as opposition builds

Catch up quick: AES filed its latest regulatory rate review with the Indiana Utility Regulatory Commission (IURC) in June. If approved, it would roll out in two phases, with the first being a 7.5% increase in April and the second a 6% increase in January 2027.

Driving the news: The Indianapolis City-County Council has joined the chorus of entities stating their formal opposition to AES' request.

• Councilors Michael-Paul Hart and Joshua Bain introduced a proposal this month that calls for a withdrawal or rejection of the increase. The council's Administration and Finance Committee will discuss it next week.
• That proposal — which has earned bipartisan support — joins frustrated customers, ratepayer advocacy group Citizens Action Coalition (CAC), the Indiana Office of Utility Consumer Counselor (OUCC) and Gov. Mike Braun in saying that what AES is asking for is too much.

Reality check: The opposing parties scoring an outright victory in the form of a Google Data Center-esque withdrawal is unlikely.

• Council resolutions and reduction recommendations have no formal authority over the case, which will ultimately be decided by the IURC if AES doesn't pull it.

Yes, but: CAC executive director Kerwin Olson says the inevitability of an increase is all the more reason to keep speaking up.

What he's saying: "This is a prime example of why you've got to keep fighting until the bell rings," Olson told Axios. "The OUCC testimony, I think absolutely, is a reflection of the outcry from the public. But that's not the end-all, be-all."

Adding to the anti-AES momentum is ongoing anger over issues unrelated to the rate hike.

• Billing problems tied to a 2023 system upgrade, slow reconnection times in the wake of service interruptions, and inconsistent month-to-month kilowatt usage generating bills sometimes twice as high as usual continue to be sore spots for customers.
• "That's why this rate case was so dumbfounding to us … if there was ever a rate case to withdraw, this would be it," Olson said. "You want to win favor with the public and the Statehouse? Go back to the drawing board, AES."

State of play: The most likely relief would come in the form of a settlement, which has happened before.

Flashback: A settlement filed in November 2023 and approved by the IURC in April 2024 reduced AES Indiana's annual revenue increase from $134 million to $71 million.

• That increased the average bill by about $9 a month instead of the $23 AES was originally seeking.
• Olson said that settlement — which the CAC joined — also included agreements to not disconnect households on Fridays, weekends and major holidays; waiving late fees for all customers at least once in a rolling 12-month period; lower deposit charges for low-income households; eliminating charges for remote disconnections while reducing the charge for remote reconnections and more.

The other side: Settlements don't guarantee consumers will get what they want. Southern Indiana utility CenterPoint received strong pushback last year from Evansville residents, which resulted in a smaller rate increase but continued frustration.

• Initially filed in December 2023, it ended with CenterPoint getting $38 million less than it was originally seeking and customer bills climbing by $35 a month instead of $47 a month.

• The city of Evansville, OUCC and CAC all opposed the settlement filed in July 2024 and approved by the IURC in February 2025, saying it was an unbalanced result that still put too much strain on customers.

Between the lines: The IURC's 206-page final order in the CenterPoint case acknowledged that the reduction was the product of the people.

• "The high volume of consumer comments received in this case, in addition to the nine-hour field hearing held in Evansville on Feb. 29, 2024, indicates how significant of a concern affordability is to CEI South's residential customers, a concern we take very seriously," the order says.

The latest: After the Sept. 9 deadline for intervenors to file testimony, AES released a statement saying the rate case was filed alongside evidence to demonstrate the need for "continued prudent investments."

• "These investments allow us to build a reliable and resilient electric system that delivers long-term value to more than 530,000 customers while preserving our position as one of the lowest rates of any investor-owned utility in Indiana."
• The same statement was provided to Axios Indianapolis when seeking additional comment on the growing opposition Tuesday.

What's next: Full insight into how AES feels about the rising opposition will arrive by Oct. 7.

• That is the deadline for the company to file rebuttal testimony.
• If a settlement were to come, it must be submitted to the IURC by Oct. 14.
• Without a settlement, an evidentiary hearing for the case would begin on Nov. 3.
• The commission is expected to deliver a final ruling by spring 2026.

The bottom line: The rate hike fight is far from over, but what "winning" looks like is still up for consideration.