Indianapolis Power and Light

Friends and constituents,

I hope you enjoyed your weekend. I certainly enjoyed mine: supporting 200 Teamsters on a historic union recognition strike Friday, signing up over 100 people interested in DSA at the massive No Kings rally Saturday, and two great organizing meetings and a nationwide call Sunday. People are getting organized and demanding more from their bosses and their government: my favorite thing in the world to see.

But this email isn't about strikes or rallies. It's about power - the electric kind.

And I'm trying out a new idea, where I give a quick video overview to go along with the weekly email. It's admittedly pretty rough but I think it could be a cool feature - let me know what you think. Click below to watch the video!

https://youtube.com/shorts/qScnYadIzjk

How We Got Here

Many of you have been closely following the story about electricity in Indianapolis, but I think it's worth a quick refresher. I’ll warn you in advance - this gets complicated, and although I know this stuff pretty well, the experts in this field have far more knowledge than I could ever hope to - so this long explanation will still be a bit oversimplified.

In Indiana, we have a system of government-protected monopolies for electricity distribution and transmission.

AES Indiana is a private corporation, which is a subsidiary of the international AES Corporation, led by a CEO who earned over $13.2 million dollars in his annual compensation. The shareholders of this company, like all shareholders for all companies, buy ownership shares in this company because they want to earn a profit on their investments. Utility companies like AES are allowed to charge their customers enough for power to cover all their costs, plus an additional rate of return on their shareholders’ investment.

Regulators, Let’s Ride!

Since consumers can’t simply take their business elsewhere under this protected monopoly system, the government manages a Governor-appointed board known as the Indiana Utility Regulatory Commission (IURC). The IURC is supposed to act as a substitute for the market forces of competition, to make sure that the rates utilities charge are fair.

Whenever utility companies determine they need to increase their prices per kilowatt-hour, they are required to file formal requests to the IURC, which has the power to approve or deny utility companies’ requests to set their rates of profit and approve the amount they are allowed to charge consumers. These requests to raise rates are known as ‘rate cases’ and follow a complex process similar to any other lawsuit. Like in a lawsuit, utility companies make their requests and other parties such as big industrial electricity customers, municipalities, and consumer advocacy groups argue against the request. The two most powerful consumer advocacy groups are the government-appointed Office of Utility Consumer Counselor (OUCC) and the non-profit, nonpartisan group Citizens Action Coalition (CAC). (Full disclosure: I’m proud to be a longtime member, former field canvasser, and current board member of CAC). Also like in other lawsuits, many of these rate cases end in a settlement, where the utility company agrees to accept a smaller increase than they originally asked for, and sometimes also agrees to make other changes.

Settle Down

For example, AES last had a rate case beginning in 2023, which was settled and agreed upon in April of 2024. During that rate case, AES asked to raise rates for residential customers by $23/month, but eventually settled to “only” raise them around $9.36/month. AES also agreed to look into establishing a new lower rate to charge for people who live in apartment buildings - since it’s cheaper to deliver power to apartments than to houses. The OUCC and CAC both agreed to settle this case - not because they thought a $9.36/month increase was great for consumers, but because it seemed clear that the IURC would approve a rate increase, and the deal would likely have been worse for consumers without a negotiated settlement.

Since that rate case, AES launched a new customer billing system, and it went terribly - tens of thousands of customers reported problems that lasted months. The OUCC and IURC received so many complaints, they forced AES to come to a public meeting discussing the problems. At that meeting, then-chair of the IURC Jim Huston stated “"We have not seen this level of complaints on any transformation inside this jurisdiction that I'm aware of.” Yet this June - only 15 months after the last case was finalized, and only a year after that public dressing-down - AES announced its intention to raise rates once again.

Pushback

As a Councilor with significant experience in energy and utility issues, I worked to fight on behalf of my dozens of constituents who had expressed frustrations with AES. I organized a group of my peers on the Council to ask the OUCC to hold several field hearings to make it easier for the public to testify about the proposed rate increase. I attended the field hearings and testified, sending my testimony out in an email newsletter afterwards. All told, over 6,700 ratepayers testified either in person or in writing against the rate case.

Unlike at the 2023 AES rate increase, this time both CAC and the OUCC agreed that there was no appropriate settlement that could be made that would allow AES to raise our electric bills. Both groups refused to be parties to the settlement conversations altogether, and very publicly issued calls for the rate case to be declined. In fact, both organizations called for AES to have their rate of profit and the rates they charged to consumers lowered!

Republican Governor Mike Braun publicly indicated that he agreed with the OUCC in this recommendation.


At the final budget meeting of the Indianapolis City-County Council last Monday (October 6th), Councilors Michael-Paul Hart and Josh Bain introduced a special resolution calling on AES, our local electric utility, to withdraw from its standing request to raise electric rates for the people of Indianapolis. Our constituents have been incredibly vocal about this issue: 6,700 people testified asking for regulators to prevent any rise in their electric bills. As a result, all 25 Councilors from across the political spectrum signed on to this resolution.

A Deal Done In the Dark

Cut to last Wednesday, October 15th. The IURC website suddenly showed that a settlement had been reached between AES and several entities - major industrial partners as well as the City of Indianapolis itself. While a bipartisan consensus of politicians was uniting around rejecting the rate increase, Joe Hogsett’s administration was making a separate peace that would allow AES to raise residential rates by 6.51%, would not force AES to charge less to renters in apartment buildings, and would not offer new protections for regular people.

Upon learning of this settlement agreement, I immediately leapt into action to publicize this betrayal. My social media posts (which went out just as my last constituent email went to press) immediately gained traction and started being shared widely. The OUCC and CAC both also issued statements of opposition to the proposed settlement.

The Spin Cycle

Mayor Joe Hogsett and The City of Indianapolis apparently found this public opposition to be embarrassing, and responded by issuing a press release at 9:40 pm that night. The press release was a further embarrassment: Joe Hogsett did not include his name anywhere in the release, instead passing the buck to DPW Director Todd Wilson for the settlement. It included misdirection and half-truths:

1. The settlement represented a 50% reduction as compared to the increase originally sought by AES. (true - but all the political signs called into question whether the IURC would have offered even this much of an increase without parties to the settlement!)

2. The $40 million that AES spent on their botched billing upgrade would not be passed along to consumers to pay (true - but AES had already submitted a statement that they would be withdrawing that request!)

3. The settlement would save taxpayers millions of dollars (technically true - because the City would receive more favorable rates on streetlights. But taxpayers would not see a tax refund, and AES would bill those same taxpayers for AES’s share of the streetlights on their electric bills - meaning MORE money would go out of taxpayers’ wallets, not less).

The following morning, I went on Rob Kendall’s WIBC radio show to point out the betrayal in the form of the settlement, and the gaslighting and wimpy leadership displayed by the press release.

Laron Anderson of Black Indy Live next picked up the story, mostly agreeing with my framing in a social media post that got hundreds of shares and comments from enraged constituents. The City sent Laron an angry email and then made another strangely all-caps post attempting once again to misdirect and mislead constituents. Laron and I both pushed back against this continued gaslighting and refusal to take accountability.

More and more local media outlets have picked up the story.

In the meantime, I have been organizing my fellow Councilors to push back against the Hogsett administration’s settlement. At the time of writing this, 23 Councilors have agreed to sign a letter to the IURC and OUCC asking for an unprecedented but reasonable request: more field hearings to allow the public to weigh in on the proposed settlement. I am hoping to secure the final two signatures that would allow this to be a totally unanimous Council decision, and one of the first times the Council has publicly disagreed so strongly with the Mayor’s decisions.

But asking for more field hearings is just the first step. This whole affair has shown that our monopoly utility system no longer serves the people of Indianapolis.

Public Power Now In the Light

AES Indiana has been actively working with deeply unpopular data centers to help build them in AES’s service area. Some of the only people who reached out to me advocating in favor of Google’s now-defeated data center were AES employees.

Worse yet, the private equity firm Blackrock is widely reported to be in the process of acquiring the international AES Corporation.

Even in Indiana, where our state government limits the ability of cities like Indianapolis to use eminent domain for the task, we could choose to stop subsidizing million-dollar CEO pay and profit margins for out-of-state investors, and instead purchase the utility to run as a publicly owned or cooperative power company. True, this would be a massive undertaking. But a utility company’s guaranteed return on investment seems like it would make it possible to use city-backed revenue bonds to buy the grid. After all, it worked for a massive new hotel in the city, and hotels do not have a guaranteed rate of return on equity.

Councilors from both political parties and Statehouse legislators have expressed support for exploring this plan, and you can count on me to fight hard for an electric utility that serves the people of Indianapolis, not corporate interests.

As we proved this week, Mayor Hogsett is stuck in his old playbook of shadowy deals and murky details.

But we have the power, and we’re pulling his corruption out into the light.

In love and solidarity,
Jesse