Fight AES’s Rate Hike!

Friends and Constituents,

I hope you’re doing well. I’m reaching out today to discuss something that I know is top of mind for dozens and dozens of constituents who have reached out to me this year: electric bills.

As most of you know, our monopoly electric company, AES, is currently asking for permission to raise their rates of profit and take $24.7 million a year out of Indianapolis ratepayers’ pockets to give to their shareholders.

I am fighting against this request tooth and nail.

On Monday night, I attended the Indiana Utility Regulatory Commission’s field hearing about AES’s proposed massive increases to your electricity bills.

It is not too late to make your voice heard on this matter! Tonight, there’s a field hearing at 6:00 pm at The Fort Event Center at Fort Harrison State Park, 6002 N. Post Rd. (Blue Heron Ballroom). You can also still submit written comments about how AES’s profit-seeking behavior would impact you and your family here. You have until September 2nd to submit commentary. Make sure to include your name, city, zip code, and a reference to either “IURC Cause No. 46258” or “AES Rates.”

By popular request, I am sharing a copy of MY testimony before the commission below.

The summary is:

-Our state government won’t let Indianapolis do what makes the most fiscal sense (taking over our own electric grid and running it as a municipal agency).

-Consumers aren’t allowed to simply shop elsewhere for their electricity because in Indiana, private companies receive a monopoly on electricity generation and transmission.

-Since local government can’t act and consumers can’t act, the utility regulators MUST. And they have the power to!

-They can and should LOWER the amount of profit that AES is allowed to collect. If they lower the rate of profit to a still-healthy 5.1%, AES could do all of their proposed upgrades without raising anyone’s electric rates.

-If they refuse to do this, they should at LEAST stop making families subsidize big businesses, and stop making efficient customers subsidize inefficient ones.

My full speech is below.

Be prepared for many more emails from me during budget season - there are a lot of fights I am fighting all at once, and I need your help to do so.

If you can’t lend your voice, consider giving our campaign a few dollars a month to help us keep fighting.

In love and solidarity,
Jesse

–

Good evening, members of the Indiana Utility Regulatory Commission.

My name is Jesse Brown and I am testifying today both as a proud volunteer member of the board of Citizens Action Coalition, and as the elected representative for District 13 on the Indianapolis-Marion County City-County Council.

I first wanted to thank Office of Utility Consumer Counselor Bill Fine for working to schedule multiple field hearings on this rate case. As this rate case is proceeding during budget season on the Council, it has been difficult to attend even one of the sessions, and I am grateful that this body provided several options.

I wanted to take a moment to discuss the outside economic conditions that my constituents, who are all AES ratepayers, find themselves in, in 2025. The cost of living has been increasing dramatically. Grocery and restaurant prices have gone up substantially in recent years. Housing costs have seen some of the nation’s highest increases, year after year after year. Rents are skyrocketing - and this is leading to more and more constituents thrust into homelessness. 

Meanwhile, due to economic changes at the federal level and tax policy changes at the state level, the City of Indianapolis is cutting services. In a story from Mirror Indy on August 22nd, we learned that Indianapolis has already lost $6.8 million in funding and 29 jobs due to cuts to research grants from the National Institutes of Health. The City budget is cutting funding for parks. Even our public transit is becoming more expensive: IndyGo just approved increasing their fares by a dollar a trip.

In that context, AES’s existing rates are already a massive problem for the people I am sworn to represent. AES’s own data shows that 49% of their customers were threatened with a disconnection notice in the first 6 months of this year. 21,000 people actually had their power disconnected for nonpayment, even at the rates AES currently has. It seems that every Facebook group for neighborhood conversations has hosted discussions of drastically increasing electric bills and extreme frustration from ratepayers. Dozens of constituents have reached out to me directly, asking for help holding AES accountable.

And it’s easy to see why! AES’s rollout of a new customer engagement system was an embarrassment. I myself received incorrect or missing bills for several months, and my constituents went through the same thing. They’ve experienced unacceptable numbers of power outages and much longer wait times for power to be restored after storms.

Under capitalism, in industries that do not receive government protection for their monopolies, consumers are able to hold firms with this level of poor performance accountable. Bad firms are forced out of business so others can provide services more efficiently or with greater benefits to their customers. 

You heard the applause earlier. People would greatly prefer an electric utility that is run directly by the City, not by out of state profiteers.

But of course, in Indiana it would be illegal for Indianapolis to buy AES out of business and run the utility as a municipal organization. Instead, we are forced by law to put up with a privately-owned monopoly, and that monopoly gets to appeal to you, the members of the IURC, to set its profitability as defined by Return On Equity.

AES already has a 9.9% guaranteed return on equity. They are now requesting to increase that rate to 10.7%. Based on the size of their annual budget, this would suck an additional $27.4 million dollars out of the local economy and into the private hands of AES’s shareholders, every single year, on top of the millions and millions they already extract in the form of profit.

This is in addition to the millions of dollars in CEO pay that both their local AES Indiana and their parent company AES receive. And all of that is before any potential sale to an even larger organization. That’s right - for those in the audience who hadn’t heard, BlackRock is rumored to be among a small group of megacorporations contemplating buying AES outright.

I want to focus in now on the actions that you as a regulatory body have the authority to take.

You can set AES’s return on equity lower than they currently receive. You could avoid anyone paying higher rates and still give AES’s shareholders a guaranteed 5.1% return. You could do that, and you SHOULD do that. Set their rate of return on equity to 5.1%, to show them that their mishandling of the new technology rollout, their unresponsiveness and delays in reconnecting power after storms, and their refusal to propose methods of protecting low-income ratepayers have consequences. 

Beyond setting the ROE, you can and should take additional actions.

Right now, AES is planning to increase residential rates by a much higher percentage than commercial or industrial customers. I’m all for ensuring that businesses can keep operating in our state. But businesses aren’t at risk of their food going bad or developing heat stroke over the summer when their power is disconnected. Residential customers are. My colleague, Councilor Andy Nielsen, said it well: “ensure residential households are not subsidizing corporations.” Don’t approve a rate increase that forces low-income Hoosiers to shoulder the burden but lets data centers and other big industry get off relatively easy.

You can also encourage people to be thrifty consumers. I have solar panels on my roof, which means I’m producing power to give to the grid. AES currently says I should have to pay MORE per kilowatt hour because I use less energy. Those who use MORE energy pay LESS per kilowatt hour. It would be even worse if I was living in an apartment building with one bill. You, as regulators, can and should insist upon a base rate that stops discouraging energy production and energy efficiency.

You can also require more financial support for low-income households at risk of disconnection. As I mentioned at the beginning of this speech, far too many of my constituents are struggling right now. We are struggling to keep food on the table, we are struggling to stay in our homes, and we are struggling to keep the lights on. There is no reason that a privately held corporation cannot do more to help its most needy ratepayers.

So again: what you truly should do is LOWER AES’s return on equity to 5.1%.

If you refuse to do this, then at the bare minimum you should insist on a rate structure that supports residential customers, efficiency, and low-income hoosiers. 

You can’t squeeze blood from a stone. Without drastic changes like the ones I propose, we will see hardworking Hoosiers become homeless, just for the profit of a monopoly utility company.

Thank you.