Matt Parr: AES acquisition plan could force utility bills higher

Over the past year, Hoosiers have watched their utility bills climb. In February, the Indiana Utility Regulatory Commission took the unusual step of launching an affordability investigation into the state’s “big five” investor-owned utilities, citing an influx of complaints and concerns that the balance between utilities and customers feels “dramatically out of whack.” Those five companies include AES Indiana and the Northern Indiana Public Service Co., or NIPSCO.

In 2024, private equity giant Blackstone acquired a roughly 20% ownership stake in NIPSCO and has a senior executive sitting on the utility’s board. Since then, NIPSCO customers have experienced some of the steepest rate increases in Indiana.

Now, a consortium led by private equity firms BlackRock and EQT has announced a $10.7 billion bid to acquire AES Corp., which operates utilities in Indiana and Ohio. If completed, the deal would significantly expand private equity’s influence over Indiana-serving utilities — at a moment when regulators are already questioning whether rates have become unsustainable for many families.

Supporters argue the acquisition would provide capital as electricity demand rises, particularly from data centers and artificial intelligence. But Indiana does not have to speculate about how this model works. Minnesota regulators recently reviewed a similar BlackRock-led acquisition of a public utility, ALLETE, and what they found should give Hoosiers pause.

In that case, an administrative law judge warned that the deal’s targeted returns increased the risk of unsustainable rate hikes. At issue was a private equity fund targeting annual returns of 15% to 20% — significantly higher than the roughly 10% average return that publicly traded U.S. utilities have generated over the past decade.

That math raises a simple question: If a fund is aiming for substantially higher returns than utilities have historically produced, how is the gap closed?

Indiana policymakers have already acknowledged that rate pressure is a serious concern. Last year, Gov. Mike Braun stated, “Hoosiers have been burdened with utility rate increase after increase. We can’t take it anymore,” and directed the Office of the Utility Consumer Counselor to evaluate utilities’ profits and consider ways investors could bear more of the cost of doing business rather than ratepayers.

Earlier this legislative session, state Rep. Cherrish Pryor proposed requiring additional regulatory approval before a public utility could be sold or reorganized. The amendment did not advance, but the issue behind it remains relevant: Should Indiana strengthen oversight before allowing greater private equity influence over regulated utility monopolies?

When regulators say affordability is out of balance, it raises the question of whether ownership structures focused on outsized returns could intensify that pressure.

The Indiana Utility Regulatory Commission last week pressed the “big five” utilities to defend rising rates in public questioning. As that review moves forward, commissioners can examine how financial structures and return expectations affect long-term rate stability.

Lawmakers could revisit oversight tools in an interim study committee before the next legislative session, including proposals similar to Pryor’s amendment. And if needed, the governor has the authority to call lawmakers back into session to address urgent ratepayer concerns.

Indiana does not have to guess what could happen. Another state has already examined a similar BlackRock deal and raised red flags. Before Indiana becomes the next chapter in Wall Street’s takeover of our public utilities, state leaders should ensure that Hoosier ratepayers — and not an out-of-state, multitrillion-dollar private equity firm — come first.•

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Parr is communications director at the Private Equity Stakeholder Project.