If you’re finding it harder to pay your power bill, you’re not alone. Bills jumped more than 17 on average this year – the steepest increase since at least 2005.
Bloomington resident Lindsay O’Neil had to take out loans this spring to keep the lights on while raising three kids.
“It was like the last day, and rent was just due, and they sent the disconnect notice, so I had to take out $377 and some change in the Cash App loan,” she said.
O’Neil says she’s tried payment plans from her utility provider and Indiana’s energy assistance program. She unplugs her TV when she leaves home and stops using her stove in the summertime, which Duke Energy recommends, but it’s not enough.
“We're told consumer responsibility over and over and over again, personal responsibility, but how much of that is applicable to them?” O’Neil asked.
There’s now bipartisan consensus that Indiana is experiencing an energy affordability crisis, and the Statehouse is feeling the heat.
A law passed this year breathed new life into the Indiana Utility Regulatory Commission and put more pressure on power companies to show how they’re protecting consumers. But at the same time, Indiana is encouraging the buildout of energy-hungry data centers, and many in the energy sector worry that the grid, and ratepayers, will struggle to keep up.
Regulators on the offensive
The IURC vets petitions by power companies to raise their rates. It historically worked in the background, and its commissioners said little.
That’s changed since the appointment of chairman Andy Zay. The former Republican state lawmaker led an investigative inquiry this spring into Indiana’s largest utilities, and his commission has taken to the road to talk with Hoosiers about energy rates, which have gone up nearly 30 percent in the last decade.
“I think it's helping us create a culture,” Zay said at the inquiry in March. “We're not going to be passive. We're going to be out there.”
Gov. Mike Braun tasked Zay with bringing down rates, but the mandate first came from the legislature. House Bill 1002 passed this spring, creating levelized payment plans for customers and requiring more reporting from utilities on how consumers are doing.
Cracking down on utilities has historically been the domain of progressive groups such as the Citizens Action Coalition, but the law was authored by Republicans.
Coalition executive director Kerwin Olson says he’s seeing the tide shift.
“Having spent over 20 years at the Indiana Statehouse, this was the first time that I've seen the utilities on their heels a little bit, not in total control,” he said.
Trade wars and the conflict with Iran have increased the price of fuel and energy infrastructure, but the biggest worry for energy watchdog groups in Indiana is the sudden growth of “large load customers”: in other words, data centers.
Powering them doesn’t just increase demand for fuel, it requires massive investment in transmission projects and capacity.
“We're talking about utilities who basically have told us in their integrated resource plans, ‘We don't need any new resources. Without data centers, we're good, but with data centers, we're going to need two gigawatts, three gigawatts, four gigawatts, five gigawatts’,” Olson said.
Building data centers is a big part of Braun’s agenda. They provide significant tax income and some construction and operating jobs. But many communities are fighting those projects over the financial and environmental costs.
“It is urban, it is suburban, it is rural,” Olson said. “We haven't found a community yet that wants a data center.”
The IURC wants to prevent small consumers from footing the bill. A state law passed in 2013 allows utilities to charge consumers for those upgrades, but power companies say data centers will pay their own way.
Under questioning from Commissioner David Valeta, director of regulatory affairs at AES Indiana Chad Rogers said that “to the extent that new transmission costs are to deliver power to the data center, 100 percent of that gets allocated to the data center.”
Valeta asked if AES was committing that other customers wouldn’t pay any of the transmission costs related to data center development.
“It depends on who benefits from those transmission upgrades,” Valeta said.
Olson says it’s unclear how much consumers will have to pay months and years down the line.
“It's premature for anybody to sort of say, ‘We've got this figured out, data centers are paying their fair share,’ when there's a whole lot more work to be done,” he said. “There’s a lot of filings that are going to be made, and a lot of costs that are going to grow.”
A conservative push for green energy
Hoosiers can’t choose their power company. The state divided the grid into regional monopolies, with the compromise that the IURC could limit how much they charge.
Some conservative groups believe the free market should drive down prices.
Indiana Conservative Alliance for Energy executive director Hunter Jones believes in what he calls an “all of the above” approach to meeting demand. That means not limiting reliance to fossil fuels.
“We don't want utilities or the regulatory system to pick winners and losers,” Jones said. “We don't believe in one type of energy. We believe in all types of energy and whatever is the most affordable and benefits consumers the most at the lowest possible cost.”
Indiana is approaching a cliff in terms of power supply. The Indiana Conservative Energy Alliance anticipates the state's electricity consumption will more than double by 2031, driven largely by data centers.
Jones says energy supply is struggling to keep up with the demand from “large load customers,” and it could lead to huge costs for average Hoosiers.
“While we're waiting for nuclear to come online, which is a few years out, we don't need to be putting all our eggs in one basket,” Jones said. “We need to be looking at what's immediately deployable. Right now, that is solar and wind energy powered by battery storage.”
Despite setbacks to solar including the loss of federal tax credits and incentives for Indiana consumers, Indiana ranked third last year in new solar capacity, behind Texas and California. Price per megawatt hour for solar and wind projects is negligible because there are no fuel costs.
But green energy advocates have had a hard time getting rural Hoosiers on board with solar fields in their communities. Like with data centers, there are natural and economic tradeoffs that come with converting farmland to energy production. Not only do they visibly change the landscape, but solar installations can degrade soil quality, and developers compete for plots with farmers who rent fields from landowners.
The Conservative Alliance for Energy wants to win over Hoosiers by educating them about renewable power. Jones says there’s misinformation about these projects funded by opposition groups.
But there are also Hoosiers who did diligent research and decided they don’t want solar projects in their community.
“They don't want renewable energy, and that's fine, but there needs to be some kind of realistic look at Indiana's energy future,” Jones said. “If your pockets and Hoosier ratepayers are hurting now because of rising monthly energy bills, what do you think it's going to be like in the next few years if this problem remains the same?”
High ambitions, short staffed
The IURC completed its 10-stop listening tour in April. Spokesperson Emily Duncan wrote in an email that the commission was still preparing takeaways and evaluating next steps.
Zay expressed optimism that Indiana could take advantage of the opportunities posed by data centers and still protect consumers. But he said to do that, the commission needed to grow.
According to Zay, his staff is “very strained.”
The commissioners painted a picture of a small but dedicated staff sleeping in their offices to finish reports, working overtime and on weekends.
Zay said his staff was sitting on “hundreds and hundreds” of open customer complaint cases for all utilities, mainly about bills. He told one utility president that they’ve had to wait up to two weeks to get a response from the company.
“Sometimes I feel like the utilities are coming at us where we have one hand behind our back,” Zay said. “They just have more accessibility to attorneys, legal teams, information, where it takes a little while for us to catch up.”
