State’s ratepayer advocate recommends denial of AES $200M increase request

The Indiana Office of Utility Consumer Counselor on Wednesday recommended that state regulators deny AES Indiana’s request for a $193 million base rate increase — instead proposing a $21 million reduction in current rates.

The agency’s conclusions come after a three-month legal and technical review of testimony and exhibits in the pending case, which is before the powerful Indiana Utility Regulatory Commission.

Freshly appointed Counselor Abby Gray said AES “has not demonstrated sufficient evidence” for a hike, noting that the utility filed its ask less than 14 months after nabbing approval in a previous rate case.

“My team is recommending additional reductions that would reduce the utility’s current rates and help lessen the burden on ratepayers,” Gray continued, in a news release.

The OUCC on Tuesday filed testimony from 11 agency experts. The agency recommends that:

• AES’s monthly customer service charge be cut from $17 to $11.25. The utility wants to raise it to $20.
• The authorized return on equity be reduced from 9.9% to 8.5%. AES has asked for an increase to 10.7%.
• More than 100 “phantom hires” in the utility’s budget be eliminated. AES wants to charge ratepayers to fill 105 open roles that one filing described as “continually vacant” with “costs that are consistently not incurred.”
• Proposed expenses for depreciation, operations and maintenance be decreased and vegetation control costs be kept flat.

Electric Division Director Brian Latham — the lead witness — said AES’ case-in-chief “appears to simply give lip service to affordability while focusing on shareholder returns.” He noted that residential customers pay 25% more this year than in 2023.

AES’ rebuttal testimony is due Oct. 7.

Also included in the OUCC’s filings were more than 6,800 written comments from AES customers and other stakeholders.

The agency has gotten “significant” numbers of written comments in recent rate cases for other investor-owned utilities, but “no recent individual rate case has produced as many as the OUCC has received in this docket,” External Affairs Specialist Ashley Bishop testified.

Another 89 AES customers spoke — all in opposition — of about 500 attendees to four public hearings held around Marion County, according to her filing. The OUCC also received about 870 complaints about AES.

“We received thousands of consumer comments in this case, highlighting serious hardships many customers are facing,” Gray said, “and I want to thank the individuals who took time to submit comments either in writing or at the IURC’s public hearings.”

Citizens Action Coalition, a nonprofit that advocates for ratepayers, also filed testimony urging denial and calling for greater affordability.

“The Commission should take strong action to protect residential ratepayers experiencing inexcusably poor service at increasingly unaffordable rates,” Program Director Ben Inskeep said in a separate news release. They have “grown beyond exasperated with AES Indiana’s persistent billing and autopay issues, the woefully inadequate customer service, and overall response to AES Indiana’s mismanaged billing and autopay systems.”

After AES files its rebuttals, an IURC evidentiary hearing is scheduled to begin Nov. 3. A final order is expected in the spring.