AES and the city of Indianapolis file rate hike settlement with the IURC

Driving the news: The agreement filed with the Indiana Utility Regulatory Commission on Wednesday night modifies the case's procedural schedule, allowing the deal to be submitted beyond the original settlement deadline of Oct. 14.

• The settlement slashes the requested base rate increase, so a customer using 1,000 kWh per month would see their bill jump by about $10, instead of $21.
• According to AES, the rate adjustment averages 3.35% annually over a two-year period.
• The original regulatory rate review filed in June called for a 13.5% increase over the next year and a half.

What they're saying: "Despite rising costs, we have been disciplined in our planning through measures like our operations and maintenance costs holding flat for the past five years," AES Indiana president Brandi Davis-Handy said in a statement.

• "We have a deep commitment to operating efficiently and keeping rates as low as possible. Throughout this process, we've listened to stakeholder feedback and evaluated tradeoffs we will make for future investments while minimizing the financial impact of delivering safe and reliable electric service."

Zoom in: In addition to the city and AES, parties listed as in agreement with the settlement are Walmart, Rolls-Royce Corporation and the AES Indiana Industrial Group, which includes Allison Transmission, Eli Lilly and Company, Indiana University, Ingredion, Marathon Petroleum and Messer LLC.

• Kroger was not a party to the settlement, but participated in negotiations and has voiced no opposition.

Yes, but: Not everyone is on board. The Indiana Office of Utility Consumer Counselor (OUCC) and ratepayer advocacy group Citizens Action Coalition (CAC) declined to take part in settlement negotiations and remain critical of AES' request.

• "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. "The OUCC stands by its initial recommendations for a reduction from current rates and will oppose the utility's settlement agreement."
• The CAC is calling on the IURC to reject the settlement, calling it an unbalanced agreement that "fails to adequately address the egregious and prolonged billing system problems AES Indiana customers have experienced."

• "Hoosiers have had enough with AES Indiana's poor service, soaring bills, and backroom deals," Kerwin Olson, CAC's executive director, said 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."

Zoom out: The settlement and its timing also drew criticism from Indianapolis City-County Councilor Jesse Brown, who was among those urging the city to purchase AES Indiana and operate the electric utility as a nonprofit.

• "Joe Hogsett and The City of Indianapolis IGNORED the unanimous resolution that the City-County Council passed last week asking AES to withdraw from their case," he wrote on Facebook. "Instead of joining with the consumer advocacy groups and the City-County Council, Hogsett decided to instead pursue a separate settlement against the interests of constituents."

What's next: The IURC, which is expected to make a ruling in the spring, will consider the agreement as it reviews the case.

• Testimony supporting the settlement agreement must be filed by Oct. 22, opposing testimony must be filed by Nov. 24, and settling parties' rebuttal testimony is due by Dec. 16.
• An evidentiary hearing for the settlement would begin on Jan. 7.

Editor's note: This story has been updated with a comment from Indiana Utility Consumer Counselor Abby Gray.