Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
We are living through a historic period in the energy industry. Indiana stands at the intersection of two powerful forces: an ongoing energy transition and unprecedented economic growth. The decisions we make today will shape our region’s future for generations. It is a moment filled with opportunity, responsibility and optimism.
History shows that every era of growth brings new demands for electricity. From the rise of manufacturing to the widespread adoption of air conditioning, computers and the internet, each generation has faced a new wave of energy demand. And each time, the electric industry has responded through thoughtful planning, innovation and long-term investment.
Today is no different.
This year, AES Indiana completes a seven-year effort to modernize and strengthen central Indiana’s electric grid. The timing could not be more important. Thanks to these investments, our customers are experiencing the shortest duration of outages in the last decade, with outage frequency reaching its lowest level since 2019.
These results matter because reliable energy is the foundation upon which communities grow, businesses invest and families thrive.
At the same time, Indiana is experiencing one of the most significant periods of economic development. At AES Indiana, we view this growth as an opportunity that must be managed responsibly.
Growth for us is about more than megawatts. It is about creating value for communities while protecting the customers who already depend on us every day. That is why our approach to load growth is straightforward. It must be cost-effective, must not adversely affect existing customers and must support the continued reliability of our electric system.
Our responsibility as a utility is not to determine whether growth occurs. Our responsibility is to ensure that when growth happens, our infrastructure is ready, reliability remains strong, customer bills are protected, and communities have a meaningful voice in the process.
On Oct. 7, the Indiana Utility Regulatory Commission unanimously approved AES Indiana’s plan to serve the Google data center project in Morgan County. Under our approved framework, Google’s rates will cover 100% of the energy, generation, transmission and infrastructure costs required to serve its facilities.
From the beginning, we emphasized that the structure of the agreement was designed with existing customers in mind. The arrangement is expected to generate more than $770 million in customer savings over the term of the contract while supporting economic growth in central Indiana.
Recent public conversations have questioned whether existing customers are subsidizing Google’s network upgrade costs, but that does not accurately reflect how the approved agreement works. While the upgrades will become part of AES Indiana’s broader transmission system and provide reliability, resiliency and stability benefits for all customers, Google’s rate was specifically designed to cover 100% of the incremental costs required to serve its facilities, including those transmission upgrades. The IURC recognized that these costs are recovered through Google’s minimum monthly demand obligation and that, at its expected demand, Google will contribute additional revenue toward system-wide fixed costs. The bottom line is that existing customers are not left paying the incremental costs of serving Google.
The agreement demonstrates an important principle: When thoughtfully planned and supported by strong customer protections and regulatory oversight, large-scale economic development can benefit both new investment and existing customers. Growth and affordability don’t have to be competing priorities.
As we prepare for the future, the question before us is not whether Indiana will grow. The opportunities have already arrived. The question is whether we will be ready and manage growth in a way that creates value for the customers and communities we serve.
I am confident the answer is yes.•
__________
Davis-Handy is president of AES Indiana.
Please enable JavaScript to view this content.
Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our comment policy that will govern how comments are moderated.