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Residential customers of AES Indiana could see their monthly electricity bills climb about 19% this fall, and the utility is blaming the soaring price of natural gas as the reason.
AES Indiana, formerly known as Indianapolis Power & Light Co., is asking state regulators for permission to increase prices under a mechanism that allows it to adjust prices based on fluctuations in the cost of fuel.
In a filing Friday with the Indiana Utility Regulatory Commission, AES Indiana said it had “made every reasonable effort” to acquire fuel, and to generate or purchase power, at the lowest cost possible.
The utility said the proposed rate would result in an increase of $24.39, or 18.9% for an average residential customer using 1,000 kilowatt hours a month.
If regulators approve the request, the new rates will take effect in September and remain through November, when the utility could file another adjustable-rate tracker request.
David Jackson, director of AES Indiana’s commercial operations, said that natural gas prices have increased significantly, and forecasted that the price of fossil gas will be 288% higher for the months of September through November.
“The key drivers of the natural gas price increase are uncertainty of domestic supply and increased demand,” he wrote in submitted testimony. “Natural gas production has been slow to respond to higher prices, and demand from electric generation has been high.”
He added that the war between Russia and Ukraine “continues to support higher natural gas and coal prices” due to concern of global supply interruption and trade embargos on Russian commodities.
The Indiana Office of Utility Consumer Counselor said it will examine AES Indiana’s filing, but has until July 22 to complete its review.
“We are certainly concerned about rising costs and customer affordability and will keep that in mind throughout our review,” said the spokesman, Anthony Swinger, in an email to IBJ.
Citizens Action Coalition of Indiana, a utility watchdog group, said AES Indiana’s request is a result of its “delayed transitioning to more affordable and clean energy solutions.”
“This massive bill increase highlights the urgency of transitioning to clean energy solutions like energy efficiency, renewable energy, and battery storage, which will save Hoosiers money and reduce bill volatility,” said Ben Inskeep, program director at the organization, in an email to IBJ.
The group also pointed out that AES Indiana reported nearly $224 million in profit for the 12 months ending April 30.
“Meanwhile, those same ratepayers struggle to keep food on the table amidst serious inflationary pressures and continue to be slammed with higher costs at the pump,” said Kerwin Olson, executive director at Citizens Action.
AES Indiana provides electricity to more than 500,000 residential, commercial and industrial customers in central Indiana.
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When rates were low, did we receive a credit? Asking for all customers.
If they are going to request a rate increase, they need to scrub their expenses and get rid of all their marketing and promotional expenditures. They have their customers as a captive audience–a monopoly, if you will, and have no business sponsoring race cars or utilizing any prime time television to advertise information they can send with my bill.
Yep
Exactly!
Good point!
No mention of efforts to transition to alternative/cheaper methods of generating electricity?
224 million profit dollars divided by 500,000 customers = 448.00 profit dollars per customer per year. About 3.34 x my monthly bill to profits.
Utilities like power and water should be publicly-owned and not a for-profit industry. The profit-driven model doesn’t serve the best interests of the general public.
AES message to customers is always conserve, conserve, conserve, but their rate increases more than eat up anything I do to reduce my bill. I’m using less kilowatt hours this year, yet my electric bill is higher and keeps going up. I can only slow the inevitable.
Another irresponsible article from the IBJ. The only cause of the supply problem listed was the war between Ukraine and Russia? Laughable. You owe your educated readers more than propaganda.
Biden killed the production of domestic drilling in his first day in office. Period. He has had no remorse or policy change on his war against fossil fuels since taking the White House. We could easily produce enough oil to keep gas in the $2/gal range and no increase in natural gas with a simple revision to his executive order. Elections have consequences. Consider this 19% your contribution to the Green New Deal. Enjoy.
Are you proposing that Biden take over the oil and gas companies? They have leases on drilling sites where they aren’t producing any oil. They are choosing not to increase supply because they are making record profits. Unless you want Biden to go full on socialist and nationalize the industry, there isn’t much he can do.
No, Wesley, Ryan isn’t suggesting that Biden tale over the oil and gas companies. Dementia-addled, career “which way is the wind blowing so I know what I believe today” Biden isn’t sufficiently competent to take over the dog catcher’s job in Brookville.
Biden stepped in it Day One by canceling the pipeline, producing a perception (note that word, because for most people perception is reality) that he was going full-on anti-fossil fuel to genuflect to the greenies that helped shove his sorry posterior into offcie. I’d say that war is proceeding apace.
Bob, the Keystone XL pipeline wouldn’t even be close to being completed right now. If this is all Biden’s fault, why are gas prices up across the entire World?
This isn’t even remotely true, there are over 9,000 unused drilling leases for Federal lands (which add up to about 10% of current output). Oil is a global commodity and production is largely controlled by trade groups like OPEC, not the President. Trade groups and companies are in no hurry to ramp up production in a high-demand economy because it jacks up profit shares.
Basically, your comment is a fabrication with no factual basis whatsoever. You’re just looking for a person to blame, even if it’s not really what is happening.
Agreed! IBJ owes a more accurate and thorough explanation to its readers.
Wesley, instead of ranting, stop for a moment and educate yourself. The Keystone XL pipeline extension, proposed by TC Energy (then TransCanada) in 2008, was initially designed to transport the planet’s dirtiest fossil fuel, tar sands oil, to market—and fast.
As an expansion of the company’s existing Keystone Pipeline System, which has been operating since 2010 (and continues to send Canadian tar sands crude oil from Alberta to various processing hubs in the middle of the United States), the XL pipeline promised to dramatically increase capacity to process the 168 billion barrels of crude oil locked up under Canada’s boreal forest.
It was expected to transport 830,000 barrels of Alberta tar sands oil per day to refineries on the Gulf Coast of Texas. From the refineries, the oil would be sent chiefly overseas—not to gasoline pumps in the United States.
The Keystone XL pipeline expansion would have had zero impact of the availability or the price of gasoline in Indiana anywhere else in the United States.
Now do you get it?
Oops, above comment directed to Ryan H.
The Democratic Party with the Biden Administration are literally attacking
the fossil fuel industry to eliminate them..
It’s death by a thousand cuts –
– The EPA
– Federal Reserve
– National Securities Exchange Commission
– Department of the Interior
– Department of land Management
If they had more solar arrays, they would not have to raise rates.
1.2 cents per watt with storage at utility scale!
Bunch of hillbilly Texans bringing their nonsense North with them!
AMEN
Things have been terrible since Obama left office. Most of the problems now are out of Biden’s control.
AES should be saving even more money since they will no longer need to pay retail rates for the excess electricity that residential customers’ solar panels put back into the grid for any new systems that come online after June 30th. Can we expect AES to share that low-cost electricity with its customers by lowering rates accordingly?