Customers of AES Indiana could see their monthly electricity bills climb an average of 13%, or $17, if state regulators approve the utility’s newest request for a rate increase.
The company formerly known as Indianapolis Power & Light filed a petition on Wednesday to seek a rate increase to cover what it said were its rising operational costs and other needs.
AES said the petition contains its first base rate increase request in five years and comes as a result of “inflationary impacts” on operations and maintenance expenses, investments in reliability and enhancements to customer systems.
Base rates allow utilities to recover the cost of investments in infrastructure and operating expenses. The petition also seeks recovery of increased costs for tree-trimming and removal of overhanging vegetation, which can interfere with overhead lines.
“Through this rate review request, we are making meaningful changes and improvements that will provide significant benefits to our customers, including technology offerings and investments in our infrastructure that will provide a better overall experience for our customers,” Kristina Lund, president and CEO of AES Indiana, said in written comments.
The estimated $17 increase in monthly bills would apply to an average AES Indiana residential customer using about 1,000 kilowatt hours per month.
But some consumer groups said they were shocked by the amount that AES Indiana is seeking, especially coming just two years after the utility got approval to spend $1.2 billion to upgrade its local energy grid. That set the stage for the approval of seven straight years of rate increases to pay for the improvements.
“When is enough, enough?” said Kerwin Olson, executive director of Citizens Action Coalition of Indiana. “We are also very concerned how this will impact vulnerable households in Indianapolis who are already struggling to get by, as is evidenced by AES Indiana disconnecting more households in Indiana than any of its peer utilities.”
A new utility disconnections dashboard posted this summer by Indiana University showed that AES had the highest disconnection rate in Indiana last year; the next highest was Duke Energy Indiana.
The Indiana Utility Consumer Counselor’s Office, which acts as an advocate for utility consumers, said it will review the request and expects to file testimony by mid-October. “In the meantime, our lawyers and technical experts will thoroughly review the details in the utility’s testimony and exhibits,” spokeswoman Olivia Rivera said.
AES Indiana has lowered certain rates in recent years, mostly due to adjustments in the cost of fuel. In March, it filed a fuel adjustment charge that resulted in a bill decrease of about 16.5% or nearly $23 for the months of June, July and August. And this month, it filed its latest quarterly fuel adjustment charge that it said will result in customers seeing a decrease of about 5% or nearly $6 for the months of September, October and November. Base rates and rate changes are not affected by or related to the fuel adjustment charge.
The Indiana Utility Regulatory Commission will review the utility’s latest request and solicit feedback from the public. If approved, the new rates would go into effect next summer.
AES serves about 500,000 customers in central Indiana. It is a unit of Arlington, Virginia-based AES Corp.