The Indiana Utility Regulatory Commission will reopen the AES Indiana rate case to consider new developments involving a Google data center and the proposed acquisition of AES by a BlackRock-led consortium.
The commission granted a rehearing request from Citizens Action Coalition Wednesday.
The IURC approved a $71 million rate increase for AES Indiana in June. CAC asked regulators to reconsider that decision, arguing significant changes occurred after the evidentiary record in the case had closed.
"This is very unusual," said CAC Program Director Ben Inskeep. "We don't often have rate cases like this where the commission agrees to reconsider its already determined order and reopen the case to take more evidence."
One of the developments involves Google's planned data center in Monrovia.
The Coalition says, during the rate case, AES downplayed the likelihood of a large data center entering its service territory. The organization later learned AES had entered into agreements with Google while the proceeding was still underway.
According to the Coalition, AES executed one agreement with Google more than a week before filing rebuttal testimony in the rate case and another nearly a month before the evidentiary hearing began.
Inskeep said the data center could fundamentally change the costs and revenues AES considers when determining how much to charge different groups of customers.
"This is an incredibly energy-intensive customer, going to be AES Indiana's largest customer, to my knowledge, by a significant margin," Inskeep said. "And so, it's going to be providing huge amounts of revenue to the utility but also imposing some very large additional costs."
CAC is not alleging that residential customers are currently paying specific Google-related costs through the rate increase.
Instead, Inskeep said the concern is that adding such a large customer changes the assumptions used to determine how AES's overall costs should be divided among customers in the future.
A large new customer could help pay a greater share of AES's existing overhead costs, potentially reducing the amount other customers need to cover. At the same time, serving a large data center could require significant new infrastructure investments.
"The rate case is the appropriate way to examine all those and fairly allocate those costs and benefits across different types of customers," Inskeep said.
The Commission will also consider the proposed acquisition of AES Corporation by a consortium led by BlackRock.
CAC argues moving from ownership by a publicly traded company to the proposed private consortium could affect AES Indiana's finances, risks and the appropriate return.
In a statement, AES Indiana said “We respect the Commission’s process and remain committed to being open, transparent, and responsive throughout these proceedings. We continue to believe the merits of our originally approved case are strong and support the investments necessary to provide safe, reliable, and increasingly resilient electric service. Most importantly, our focus remains on serving the more than 530,000 customers who depend on us every day across Central Indiana.”
The Commission’s decision to grant rehearing does not necessarily eliminate the previously approved rate increase.
But Inskeep said reopening the case gives regulators an opportunity to reach a different decision after considering the new evidence.
"If we're successful on this rehearing and reconsideration part of the case, it could mean that AES is not allowed to increase its rates, or it could mean that AES's rate increase is smaller than what the commission had previously approved," Inskeep said.
The commission has not yet determined what changes, if any, it will make to its June order.
