Updates

APRIL 2024 UPDATE: The IURC approved the settlement agreement with no modifications.

NOVEMBER 2023 UPDATE: CAC joined the settlement reached in this rate case.  We believe the proposed settlement reflects a positive outcome for customers that may not have been achieved through litigation. CAC recommends that the IURC approve the settlement as filed.

The settlement agreement does the following:

• Reduces AES Indiana's annual revenue increase from $134 million to $71 million.
• Raises the monthly residential customer charge for most customers from $16.75 to $17.00, instead of the $25.00 charge AES Indiana requested.
• Increases monthly bills by $9.36/month (a 7.2% increase) instead of the $23/month AES requested.
• Establishes an authorized return on equity (profit) of 9.90% instead of the 10.6% AES requested.

Among the terms benefiting all customers are:

• AES agrees to NOT disconnect households on Fridays, weekends, and major Holidays.
• The waiving of late fees for all customers once in a rolling 12-month period.
• A reduction in the amount collected from customers for rate case expenses and membership dues in trade associations.
• Eliminating any charge for remote disconnections and reducing the proposed charge for remote reconnections from $8 to $3.

Among the terms that will benefit low-income and vulnerable households are:

• A reduction to any deposit charged to a LIHEAP qualified household to $50.
• A waiver of any reconnection fees charged to LIHEAP households once in a rolling 12-month period.
• Increasing the current 20-day protection from disconnection for low-income medical alert customers to 40 days.

OCTOBER 2023 UPDATE: CAC filed written testimony in this case. Our recommendations for the IURC include that they:

• Reject AES Indiana’s proposed rate increase.
• Lower AES’s residential monthly fixed charge.
• Reduce AES's profit (ROE, return on equity).
• Reject AES Indiana’s request to increase its disconnection and reconnection charges and instead eliminate or reduce these burdensome charges that further hurt struggling households.
• Reduce or eliminate AES Indiana’s late payment charge.
• Reject AES Indiana’s request to force customers to pay for the Company’s expenses related to filing for a rate increase, like experts and lawyers; membership dues in trade associations and chambers of commerce; charitable and civic contributions; and coal ash disposal at coal mines.
• Establish a new Residential Economic Development Rider designed to encourage local economic development by promoting economic stability through bill discounts applied to qualifying residential customer bills.
• Direct AES Indiana to treat residential multi-family customers as a separate customer class with a lower customer charge given it likely costs the utility a lower amount to serve multi-family customers, and multi-family customers should see that reflected in their rates and bills.
• Direct AES Indiana to work with stakeholders to develop better programs and policies addressing the needs of customers who have a member of their household with a medical condition during power outages. 

In March 2020, the Indiana Utility Regulatory Commission approved AES's request to hike customer bills by $1.2 billion to upgrade its transmission and distribution grid, setting the stage for seven straight years of rate increases to pay for the improvements. Those increases are in addition to this new request. And now, there are concerns and questions about AES's quality of service when in late June and early July 2023, power to 80,000 AES customers was knocked out, and nearly 4,000 of those customers were without power for 5 whole days.

If AES has been using that money to improve the grid, why were so many customers without power for so long?

What are they doing with the $1.2 billion? AES does NOT deserve another massive rate increase.

In Cause Number 45911, AES is asking the IURC for permission to hike rates by over $23 per month so they can raise their annual operating revenues by $134.2 million, and significantly increase their profit margin.

In this case, AES wants to:

• Increase their authorized return on equity (profit) from 9.99% to 10.6%
• Increase the monthly fixed charge for most customers to $25 per month, a 49% increase. This would give AES the highest monthly fixed charge of any investor-owned monopoly utility in Indiana, by far.
• Increase the fixed charge for low usage customers (those using 325 kilowatt hours or less per month) by 34% to $16.50.
• Use their newly installed smart meters to remotely disconnect residential customers.
• Increase household reconnection fees from $44 to $51 ($64 to $80 for Sunday reconnections).
• Force Hoosier households to pay higher rates to subsidize lower rates for large commercial and industrial customers.
• Force customers to pay for the $5 million they're planning to spend on consultants and lawyers to help them argue for this rate increase.

AES wants to hike your monthly fixed charge by almost 50%.

As part of this rate hike, AES wants to hike your monthly fixed charge from $16.75 to $25. The monthly fixed charge is the amount you pay regardless of how much energy you use. 

AES also wants to continue using declining block rates, which reward customers using more energy with lower rates.

High fixed charges  and declining block rates disproportionately impact low- and fixed-income households (seniors, people with disabilities and other vulnerable populations). They also penalize households that conserve energy and make their homes more energy efficient.

AES Base Rates Comparison

for a customer using 1,000 kilowatt hours of electricity per month 

This is the core of your electric bill - what you are charged for fixed costs and usage fees. This part of your electric bill makes up about 90% of your current total AES bill. 

Trackers: the other 10% of your AES bill not included in "base rates."

These trackers, also called “riders,” are currently included in your AES bill, added to the average bill you see above. AES wants to include most of the amounts they’re currently collecting through trackers into “base rates” going forward. Then they want to file for new amounts to be collected through these trackers shortly after the IURC approves the new base rates. Except for the DSM tracker, how much the trackers will be on your monthly bill is unknown to everyone but AES.

Total AES Bill Comparison, Including Trackers: