IPL parent eyes Indy for corporate services hub

The parent company of Indianapolis Power & Light Co. has been considering Indianapolis as the hub for a new shared-services center, and is planning a major economic development announcement in the city on Friday.

AES Corp., a multinational energy provider based in Arlington, Va., revealed its intentions in correspondence with the Indiana Utility Regulatory Commission, which would have to review any service-center agreement.

Many utility holding companies have used service companies to more efficiently provide back-office support to their subsidiaries, AES General Counsel Vincent Mathis said in a March 7 letter to IURC General Counsel Doug Webber.

"In fact, AES is considering making Indianapolis the main hub for the AES service company, which would bring new, high-quality jobs to Indianapolis," Mathis wrote.

Indianapolis Power & Light and Dayton Power & Light are AES's two North American subsidiaries.

IPL and city of Indianapolis officials declined to comment Thursday about a pending economic-development announcement. Gov. Mike Pence will join IPL executives at 9 a.m. Friday at the company's Monument Circle headquarters for the announcement.

AES is looking to cut costs throughout the corporation, and it makes sense that it would choose Indianapolis as the North American hub, said Charles Fishman, who covers AES stock for Morningstar. IPL is bigger and more profitable than Dayton Power & Light, and AES is planning to invest more than $1 billion in its Indiana power plants, he said.

"Indianapolis Power and Light has a reputation as being a very well-run utility," Fishman said.

IPL's chief executive, Ken Zagzebski, is also president of AES' North American strategic business unit, which covers Dayton Power & Light.