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The Indiana Office of Utility Consumer Counselor, which acts on behalf of utility customers, on Thursday said it opposed a settlement plan disclosed hours earlier in which utility AES Indiana said it would reduce its proposed electricity rate hike by slightly more than half.
Instead, the OUCC reaffirmed its call for a rate reduction.
“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 an emailed statement. “The OUCC stands by its initial recommendations for a reduction from current rates and will oppose the utility’s settlement agreement.”
The OUCC emphasized that it was not a party to the agreement with the utility and others.
In a press release issued Thursday morning, AES said the settlement—if approved by the Indiana Utility Regulatory Commission, or IURC—would reduce the original rate increase proposed in June from an estimated $21 per month for a typical home to $10 per month.
The IURC, which said it expects to issue a final order on the rate case in spring 2026, will consider the settlement petition when it weighs the case.
In its original proposal, AES Indiana had requested a $192.9 million base rate increase from the IURC—a hike it says it needed to cover rising operational costs, including tree trimming along power lines, and future investments.
The two-phase original proposal called for raising rates an estimated 7.5% for typical residential customers by the second quarter of 2026 and another 6% by January 2027, or about $21 per month in total.
A settlement petition filed Wednesday with the IURC said the agreement would reduce the requested base rate increase by 53%, to $102.3 million.
The Indianapolis Department of Public Works first announced the agreement Wednesday night.
Kyle Bloyd, chief communications officer for the DPW, said in a press release that the “intervention” by the department in the latest AES rate case before the Indiana Utility Regulatory Commission “will save millions of dollars for taxpayers and prevent a new base rate increase from the company until the next decade.”
AES Indiana provides electricity to more than 530,000 residential, commercial and industrial customers in a 528 square-mile area in and around Indianapolis.
The utility filed the agreement Wednesday with the IURC, with settling parties Allison Transmission., Eli Lilly and Co., Indiana University, Ingredion Inc., Marathon Petroleum Co., Messer LLC, Walmart, Rolls-Royce Corp. and the city of Indianapolis.
The Indiana Office of Utility Consumer Counselor—which has filed nearly 7,000 consumer comments for the case record—said settling parties have the burden of proof to show the agreement is in the public interest.
Ratepayer advocacy group Citizen’s Action Coalition also opposed the settlement.
“Hoosiers have had enough with AES Indiana’s poor service, soaring bills, and backroom deals. It’s time for the IURC to send a message and restore affordability and accountability at our out-of-control monopoly utilities,” Citizen Action Coalition Executive Director Kerwin Olson said in written remarks.
The group said the settlement would result in residential customers receiving a 6.51% base rate increase, whereas customer classes serving large commercial and industrial customers would only receive a 3.19% and 4.12% increase, respectively.
The Citizens Action Coalition also said the settlement fails to adequately address the billing problems AES Indiana customers have experienced since the utility rolled out a new system in November 2023, including receiving incorrect or no bills for months.
Under the proposed settlement, AES Indiana said it agreed not to implement new base rates until January 1, 2030, after this current rate request is implemented.
“We have a deep commitment to operating efficiently and keeping rates as low as possible,” Brandi Davis-Handy, president of AES Indiana, said in written comment. “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.”
The original proposed rate hike by AES Indiana drew heavy criticism from City-County Council members, as did concern over reports that private equity firm BlackRock Inc. was in advanced talks to purchase parent AES Corp. for an estimated $38 billion. Consumer advocates said such a purchase was likely to drive up rates and reduce local control.
The council unanimously approved a mostly symbolic proposal asking AES Indiana to withdraw its proposed rate hike, or for the IURC to reject the hike request. Following the vote, three Democratic councilors said Indianapolis needs to keep the local utility out of private equity’s hands, possibly by buying it.
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