Settlement Reached in AES Indiana Rate Case

A settlement has been reached in AES Indiana’s request for a $134.2 million rate increase. The agreement between all parties outlines a rate increase that is roughly half what the utility requested in June. If the Commission approves the settlement, AES Indiana will be allowed to increase its operating revenue by $73.1 million (4.6%).

The primary drivers in the reduction include a $31.9 million reduction in the base cost of fuel, a $24.8 million reduction in depreciation expense, and a 9.9% return on equity instead of 10.6% which was proposed by AES Indiana. Other cost savers include extended amortization of capital costs associated with Petersburg Units 1 & 2, extended amortization of regulatory assets, and reductions in O&M expenses.

The parties agreed to a litany of conditions related to customer disconnections and reconnections and associated fees. There was agreement also to reduce the proposed increases to monthly service charges (i.e. fixed charge or minimum charge) from $16.50 to $12.50 for customers using less than 325kWh per month and from $25.00 to $17.00 for customers using more than 325kWh per month.

Relating to major storm damage and restoration procedures, the parties agree that AES Indiana will begin reporting service interruptions impacting 2,500 customers and continue reporting until all customers are restored. Additionally, AES Indiana has agreed to a collaborative with all interested parties to suggest further modifications to the company’s storm reporting requirements or related procedures.

In their joint motion, the parties outline a filing schedule which includes supporting testimony to be filed on November 29th, a settlement hearing on December 19th, and a joint proposed order on or before January 5, 2024. The parties request an order from the Commission approving the settlement agreement by April 24, 2024.