IPL announced the rate hike request Thursday. If the Indiana Utility Regulatory Commission approves it, the rate increase would take effect by the end of 2017.
IPL's request would raise the monthly bill of a typical house that uses 1,000 killowatt hours from $109 per month to $119 per month, according to an IPL spokeswoman.
The company said it intends to use the money to "cover the cost of replacing older and outdated generation with one of the cleanest, most efficient natural gas plants ever to be built in Indiana."
“We are moving in a direction that allows us to build a diverse, reliable and cleaner portfolio of generation while keeping costs affordable for our customers,” said Rafael Sanchez, IPL President and CEO, in a prepared statement.
“We understand the impact a monthly electric bill has for our customers and we are approaching the future with investments, which benefit our customers including a balanced mix of natural gas, coal, solar and wind, as well as energy storage to support the addition of alternative power sources," Sanchez said.
IPL said customers can project changes in their bills by using a rate calculator on IPLpower.com/answers. The proposed rate increase will vary among business customers depending on rate class and usage, the company said.
IPL, which serves about 480,000 customers in Indianapolis, is a subsidiary of AES Corp. of Arlington, Virginia.
This story will be updated.