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A utility rate hike proposed by AES Indiana that could increase electricity bills by about $21 per month for the average household in central Indiana has raised widespread ire and prompted members of the Indianapolis City-County Council to seek a voice in the matter.
Republicans on the council have introduced a resolution that urges the utility to withdraw the proposed hike, which would lift residential rates by more than 13.5% by early 2027. The proposal also asks the state’s regulatory panel to reject the rate-hike request if it isn’t withdrawn.
The proposal appears to have bipartisan support. But it’s unclear how much the council, which has no actual authority over the utility, can truly influence the process.
The goal of the resolution is to “send a statement,” said Councilor Michael-Paul Hart, the measure’s author. “We represent a lot of people, and I think folks forget that,” he said.
AES Indiana provides electricity to more than 532,000 residential, commercial and industrial customers in a 528-square-mile area in and around Indianapolis. Combined with an already-approved rate increase, those customers could pay about $30 more per month after the proposed hike.
The council Administration and Finance Committee will hear the proposal Sept. 30 at 5:30 p.m. Democrat Frank Mascari, the chair of the committee, told IBJ he’ll support the proposal—but he’s “not sure what it will actually do.” Fellow Democratic Councilor Dan Boots told IBJ he also plans to support the measure.
Other Democratic councilors—Andy Nielsen, Jared Evans, Nick Roberts and Jesse Brown, for example—have publicly expressed opposition to the AES rate hike.
Mostly, the resolution would add Indianapolis councilors to the list of those objecting to the rate increase. The state’s Office of Utility Consumer Counselor, which acts on behalf of utility consumers, has already done the same. It recommended reducing the monthly customer service charges for most customers from $17 to $11.25—rather than increasing it to $20.
Councilor Joshua Bain, a Republican co-author of the council measure, said that opinion just “strengthens the stance,” from he and his colleagues.
“Local government really does not have any say over energy prices, but that doesn’t mean we can’t use our voice to put whatever additional pressure we can onto these utility companies. That’s the main goal here,” he said.
Utility companies are difficult to sway. Ben Inskeep, an organizer with consumer advocacy group Citizens Action Coalition, told IBJ that utilities have extraordinary power and influence. He said it would be a rare move if AES Indiana decided to withdraw its request for a rate change solely due to political pressure.
“They rarely face the type of political headwinds that we’re now starting to see a rise of in Indiana, where there’s widespread backlash as a result of the back-to-back and extreme nature of the rate increases over the past few years,” Inskeep said.
AES Indiana bills have increased 42% in the last five years, according to an annual IURC bill survey.
Inskeep said there are instances in which significant blowback to an increase can help shape the outcome of a regulatory body’s decision. For that reason, the council measure will be sent to the Indiana Utility Regulatory Commission, or IURC, for consideration with other submitted evidence.
That will include AES Indiana’s reasoning for the rate change.
In a statement, AES Indiana spokeswoman Mallory Duncan told IBJ that the utility company needs “continued prudent investments” necessary to build “a reliable and resilient electric system that delivers long-term value.” Duncan added that the Indianapolis-based electric company has one of the lowest rates of any investor-owned utility in Indiana.
It won’t be the first time in recent years that local officials mobilized around utility costs.
Councilors organized in an even stronger fashion against a 2018 rate increase. The utility company, then known as Indianapolis Power & Light, ultimately agreed not to raise the fixed monthly rate under a rate-case settlement with the state’s Office of Utility Consumer Counselor and other stakeholders.
The IURC is expected to reach a decision on the rate change next spring.
The council will also send copies of the resolution to the Indiana Governor’s Office and leadership of AES Indiana.
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For clarity, AES took over IPL in 2001, and kept the name IPL until this decade to pacify the public perception. The irony is that AES was never a power company with experience, just an investment firm that acquired power companies. Thus their need for more and more money instead of responsible management of providing power to the Indy area.
This move by the CCCouncil is valid and needed, even if no gains are made, but at least the CCC is making their concerns heard.
The AES team let the vegetation along the lines grow for years without any real mitigation efforts. Now they claim it’s global warming or climate change and more money is needed to provide more tree and vegetation removals.
Seems to me, negligence and irresponsibility is their largest failure, and that fix should
Come from their earnings and not increased rates by the customers.
AES wasn’t a utility but was/is a developer of generation projects across the world. At one point, their business model was considered the best and other companies were modeled after it.
The rate request before the IURC is a legal case. If the ICC wants to get involved, then hire an attorney, consultants and submit testimony. Anyone can say “I don’t like it” but that doesn’t provide justification (legal means) for the IURC to not side with AES.
How much money has AES drained from IP&L customers since 2001 when then CEO Mitch Daniels sold IP&L to AES ? IP&L had a preventive maintenance action stance which AES changed to fix when it breaks attitude .