The state board that regulates Indiana’s utility companies announced Wednesday it will hold an “investigative inquiry” focused on rising energy rates.
In late March, the Indiana Utility Regulatory Commission, or IURC, will hold an all-day hearing with the state’s five largest investor-owned utility companies to ask about billing transparency, the impact of growth on rates and short-term solutions to rising energy costs.
Those five companies are AES Indiana, CenterPoint Energy Indiana, Duke Energy Indiana, Indiana Michigan Power Co. and Northern Indiana Public Service Co., or NIPSCO.
IURC Chair Andy Zay made the announcement in a press conference, saying the inquiry will examine what the commission can do better and will likely set the stage for policy changes the Legislature could take up in the 2027 session.
“We want our ratepayers’ costs to be as little as possible,” Zay said. “But we also want our utilities to be successful so when we turn the switch, the lights come on. That balance feels dramatically out of whack right now for many, many Hoosiers.”
On Tuesday, ahead of the commission’s call for utilities to present on affordability, Indiana Michigan Power announced it will be lowering its electricity rates. The company said details on how much rates will go down will be available in its formal request before the commission this summer.
“Our priority is to keep rates as low as possible while delivering reliable power and growing our communities,” Steve Baker, I&M’s president, said in a statement. “We know customers are concerned about affordability and the impact of data-center growth on rates.”
Spokespeople for Duke and NIPSCO declined to comment and directed reporters to the Indiana Energy Association, which represents the state’s largest electric and natural gas utilities.
In a written statement, IEA President Danielle McGrath said the organization’s members will address the commission’s concerns about prices at the hearings.
“As the energy industry, we are committed to serving our customers reliably and affordably,” McGrath said. “The system investments driving today’s costs are the backbone of reliability ensuring power is available when families and businesses need it most. We will be prepared to address the cost of reliability before the commission, including the underlying drivers and the steps being taken to control expenses.”
CenterPoint Energy spokesperson Noah Stubbs said the provider “welcomes the commission’s engagement” on energy affordability and will work to “increase transparency and manage future costs while maintaining safe, reliable service.”
AES Indiana did not immediately respond to requests seeking comment.
Kerwin Olson, executive director of the consumer advocacy group Citizens Action Coalition, said in a written statement that the commission’s decision to hold a public inquiry into rates is “long overdue.”
“The state of Indiana has been placing monopoly profits over the financial well-being of consumers for far too long,” Olson said. “It’s time to balance the scales and bring fairness into the regulatory process.”
IURC action
Zay called the press conference “a little bit unprecedented,” given that the board is usually not public-facing. But that’s changed in the last few months.
In September, Gov. Mike Braun announced that lowering electric rates is an important goal for his administration. That announcement followed the release of a study from the ratepayer advocate group Citizens Action Coalition that found energy costs in Indiana rose an average of 17.5% from 2024 to 2025.
Since then, Braun has filed three vacancies on the five-member commission through a publicized nomination process.
Zay, a former state senator, is one of those new board members and was recently named chair of the IURC. The commission hears cases on a variety of issues, including utility construction projects, financing and environmental compliance and has final say over how much utilities can charge.
Based on what the commission learns during the hearing, Zay said the IURC may change aspects of its internal processes, but emphasized that the board does not set policy.
Some observers say the commission is bound by state laws that favor utilities and require the IURC to approve rate-increase requests as long as they are “reasonable.”
Legislative actions
The inquiry into affordability comes as the Indiana General Assembly is making a significant shift to the state’s energy policy with House Bill 1002.
HB 1002 changes Indiana’s regulatory framework from a cost-of-service rate model to a performance-based rate model.
Currently, utilities calculate how much money it takes to provide service, add on a rate of return for investors and submit rate requests to the IURC. But the new legislation, which was passed by both chambers and has been sent to Braun’s desk, will require utilities to set rates for multiple years and will reward providers for meeting certain reliability metrics and punish them if they don’t.
The legislation also requires utilities to maintain billing assistance programs for low-income customers and to use “levelized” billing practices to prevent energy costs from spiking in a given month.
Rep. Alaina Shonkwiler, R-Noblesville, is the author of HB 1002. She attended Wednesday’s press conference with a handful of lawmakers and said she anticipates more legislative action in the 2027 session based on the IURC’s findings from its inquiry.
“When we look at wallet share for Hoosiers, we want to make sure we’re taking their concerns seriously,” Shonkwiler said. “You’ll see additional legislation next session.”
Rep. Matt Pierce, D-Bloomington, who sits on the House Utilities, Energy and Telecommunications Committee, said in a written statement Wednesday that the IURC should expand the scope of its inquiry to include measures passed by the Legislature have impacted utilities’ rates and policies.
“I am pleased the IURC is responding to Hoosiers’ concerns about skyrocketing utility bills, but this investigation will be incomplete if it doesn’t include an honest assessment of how policies adopted by the Indiana House and Senate have contributed to unaffordable bills,” Pierce said.