AES Indiana on Tuesday said it is seeking regulatory approval for a two-phase rate increase that would add about $21 per month to the typical household customer’s electric bill by early 2027.
The hikes, combined with another rate increase that has already been approved, would mean those customers would be paying about $30 more each month.
The Indianapolis-based utility said the rate increases are needed to cover rising operational costs, including tree trimming along powerlines, and future investments.
If the proposed increases are approved by the Indiana Utility Regulatory Commission, or IURC, customers will see a 7.2% hike in the second quarter of 2026 and then about a 6% increase in January 2027 for a combined 13.5% increase. That’s about $21 more per month for a customer using 1,000 kilowatt-hours per month, according to AES Indiana.
“The cost to deliver the essential service our customers depend on continues to rise,” AES Indiana President Brandi Davis-Handy said in written remarks. “We understand that any change in rates can create hardships for our customers, and we are committed to working diligently to manage costs responsibly.”
In addition, customers will see a 6% increase, for previously approved projects, in 2026, resulting in a roughly $9 monthly increase for that 1,000 kWh customer, according to AES spokesperson Mallory Duncan. That increase is for projects such as the Pike County Battery Energy Storage System, the Petersburg Energy Center and grid improvements expected to be finished in 2026.
AES Indiana provides electricity to more than 532,000 residential, commercial and industrial customers in a 528-square-mile area in and around Indianapolis.
For the proposed rate hikes, the utility company said next steps include the IURC review and public input. The IURC typically takes 10 to 12 months to evaluate a rate case and decide whether to approve the increases.
“The OUCC will use its technical and legal resources to thoroughly review AES Indiana’s rate request over the next few months,” said Ashley Bishop, a spokesperson for the Indiana Office of Utility Consumer Counselor, which represents ratepayers. “Our attorneys, accountants, engineers and additional analysts will closely look through all issues raised in this rate case and will file testimony with the IURC based on our analysis.”
The OUCC expects its testimony to be due in September. “In the meantime, we are inviting written public comments for the case record,” Bishop wrote in an email.
AES Indiana said factors including tree trimming, storm response, infrastructure investments and inflation are reasons for the proposed new rates.
Duncan, of AES Indiana, said that costs per mile of tree trimming along lines has risen about 185% since 2023, when AES Indiana did its last rate increase. She said about 30% of outages during storms are from trees, branches or other vegetation taking down power lines.
She added that smart grid investments in recent years include the FLISR (which stands for Fault Location, Isolation, and Service Restoration), a system used to locate and isolate problems for fewer and shorter outages. AES Indiana said it has avoided more than 117,000 outages since December 2023.
“We are trying to help customers plan ahead for this,” said Duncan, who added that customers can use the AES Indiana website for a bill calculator and energy-savings tips.