AES faces minor setback in ongoing quest for profits despite public outcry

Editorial note: We encourage everyone to get involved with and follow Citizens Action Coalition in their fight against AES’ exploitation of our people.

AES Indiana is the only utility provider in Indianapolis. This corporation controls the entirety of the electric grid of Indianapolis, which is good for safety and reliability of energy distribution but bad for ratepayers. On June 28, 2023, AES Indiana filed a petition with the Indiana Utility Regulatory Commission (IURC) requesting to raise annual revenues by $134 million. This request would raise monthly service charges for most residential customers from $16.75 to $25.00.

This regulatory rate review involves several parties: the IURC, who held the hearing and was in charge of making the final decision, the office of Utility Consumer Counselor (OUCC) who represents the public in IURC cases, and AES Indiana who filed the petition. As of January 5th, 2024, all parties have reached a settlement agreement. The Settling Parties worked together to submit an unopposed, jointly proposed order and they believed that no additional post-hearing briefing on the Settlement Agreement needed to take place.

The IRUC held two public hearings concerning the AES Indiana Rate Case during the fall of 2023; around 100 people attended each hearing and over 1,500 submitted written statements pertaining to the case—every individual who spoke at both hearings argued that the IURC should deny AES this petition.

Among those who spoke at the second hearing held on October 2 last year was House Representative Cherrish Pryor, who pushed for the public hearings to take place. Pryor stated that the increase “is not something that is just going to affect homeowners, it’s also going to affect businesses, small businesses, and all those costs are going to be passed on to their customers.”

The people of Indianapolis have been facing rising costs of living and increased prices of essential items, and the proposed rate increase would be yet another challenge to residents. The Citizens Action Coalition has been at the forefront of organizing to protect Hoosiers from predatory utility corporations since 1947 and remains significantly involved in this instance as well. CAC Program Director Ben Inskeep testified that “AES has already raised our bills multiple times in the last few years. People are fed up and are asking the commission to reject this increase.”

As of January 5, 2024, AES and the OUCC have reached an agreement which is to be finalized this spring and is pending approval by the state’s utility regulator. Under the agreement, utility rates will increase, just not as much as AES had initially requested. A residential customer using 1,000 kilowatt hours will see a monthly increase of roughly $9.50. AES initially requested to raise fixed charges—those not dependent on energy use—from $16.75 to $25, which would have made AES Indiana’s fixed charge one of the highest of any investor-owned utility in the nation. Other agreements included in the settlement include: AES will not disconnect households on Fridays, weekends and major holidays, AES will waive late fees for all customers once in a rolling 12-month period, and AES will eliminate any charge for remote disconnections and will reduce the proposed charge for remote reconnections from $8 to $3.

While this is technically a win for the people—in the sense that AES was not given total freedom to increase profits as much as they so please—the decision allowing AES to increase profits by such a large margin perpetuates a harmful system. AES proposed to increase its profit margin by roughly 0.6 percentage points. This is approximately tens of millions of additional profit for shareholders (money directly from the pockets of the people into the hands of several already rich individuals).

In the city of Indianapolis, AES Indiana is the only utility provider. In other words, it holds monopoly power over our access to utilities. Unfortunately, this is a consistent trend throughout the U.S. despite the proposed rhetoric of the “free market” and “competition.” AES’ monopoly status is the only reason why it increases its profits without increasing its performance.

For example, an Indiana Office of Utility Consumer Counselor analysis of utility disconnection data found that AES Indiana already has the highest disconnection rate at nearly 13 percent.

At the same October 2 meeting, Denise Abdul-Rahman, a staff member of the National NAACP Environmental Climate Justice Program (ECJP) who serves as the Environmental Climate Justice Chair on behalf of the NAACP Indiana, expressed the basic demand shared by the majority of people in the U.S.: “We think that there should be a lot of transparency in all of the federal funds AES and other utility companies are receiving and to show where that money is flowing.”

Abdul-Rahman’s sentiment is a reminder that public knowledge of infrastructure information allows cities and societies to make more informed and communally beneficial decisions. At the same time, the lack of public knowledge allows monopoly corporations to operate as AES does.

As Indianapolis residents, we must keep demanding publicly available and easily accessible data about the quality and cost of the city’s infrastructure. The AES rate case will come to a close sometime in spring of 2024 when AES begins billing higher rates, but the fight for fair infrastructure will continue until we have reliable and logistically sound utilities for all.

Featured photo: Citizens Action Coalition members Bryce Gustafson and Lindsay Haake protesting a bill that would deregulate Indiana’s wetlands. Source: Citizens Action Coalition.