AES Indiana wanted a big rate hike. A new settlement could spare Hoosiers' monthly bills.
AES Indiana customers may be spared significantly higher bills, after all. The utility serving Indianapolis customers announced Monday morning that it had reached a settlement in its ongoing rate case that cuts the potential increase to bills essentially in half.
Earlier this year — and just one day before a storm outage left thousands of customers without power for days — AES Indiana asked to increase its residential customers' bills by at least $17 each month, on average. Some consumer advocates said the true number was likely double that.
Hoosiers have said that's too much. Advocates have cried foul. And even the state's consumer protection agency said no way.
Now, after weeks of negotiation, the utility has reached an agreement with the Office of Utility Consumer Counselor and six other groups intervening on behalf of customers, businesses and more. Under the settlement, if approved by the the state's utility regulator, a residential customer using 1,000 kilowatt hours will see a monthly increase of roughly $9.50 ― or about 7%.
"We believe the proposed settlement reflects a positive outcome for customers," said the Citizens Action Coalition, a consumer advocacy group, in a news release. "The settlement will reduce AES Indiana's rate of return on equity, or profit, and will allow a much smaller increase to the monthly fixed customer charge than what was proposed by the company."
The utility had previously said that its rate request demonstrated the "cost of providing efficient, reliable electricity today."
AES Indiana now says that the settlement "sets the foundation that will enable AES Indiana's ability to execute on its investments focused on reliability, resiliency and customer experience."
Rate increase: AES Indiana has most disconnections in Indiana. Advocates say rate hike proposal won't help
One of the biggest parts of of AES Indiana's original request was to increase its fixed charge — or those costs that are not dependent on energy usage — from $16.75 to $25. Such an increase would have made AES Indiana's fixed charge one of the highest of any investor-owned utility in the nation, according to Ben Inskeep with the Citizens Action Coalition.
That fixed charge is drastically lowered in the settlement. Other terms in the settlement that benefit customers include:
AES Indiana has agreed to not disconnect households on Fridays, weekends and major holidays.
The utility is waiving late fees for all customers once in a rolling 12-month period.
It is reducing the amount collected from customers for expenses associated with the rate case or membership dues for trade associations.
And AES Indiana is eliminating any charge for remote disconnections and reducing the proposed charge for remote reconnections from $8 to $3.
Analysis by CAC of utility disconnection data found that AES Indiana already has the highest number of disconnections — more than 53,000 over nine months between 2022 and 2023 — of Indiana's five investor-owned utilities. It also has the highest disconnection rate at nearly 13%.
AES Indiana said that throughout the process, "all parties involved were committed to keeping the customers’ interests as a top priority."
The settlement has to be approved by the Indiana Utility Regulatory Commission to go into effect. An evidentiary hearing for IURC review is currently scheduled for the week of Dec. 19. There was unanimous agreement on the settlement by the OUCC, CAC and other intervening parties.
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This article originally appeared on Indianapolis Star: AES Indiana customers may be spared big rate hike under new agreement
