Monopoly electric utility, AES Indiana, wants customers to foot a $71 Million rate increase in their current case before the Indiana Utility Regulatory Commission (IURC), Cause No. 38703 FAC-133-S1.

JANUARY 2023 UPDATE: The IURC approved the settlement described below on 1/18/23.

OCTOBER 2022 UPDATE: A settlement on all issues between AES-IN, CAC, the Industrial Group, and the OUCC was filed at the IURC on October 25th, 2022. In the settlement, the parties agreed, in addition to other terms and subject to IURC approval, that:

• AES-IN will not charge customers $34.5 million in costs related to the outage
•  AES-IN will reduce the amount that they collect from customers by $6.8 million in the first FAC docket filed after IURC approval of the settlement.
• AES-IN will be allowed to charge customers $20.5 million in costs related to the outage
• AES-IN will collect the $20.5 million over two years, instead of one year as originally proposed
• AES-IN will not be allowed to earn a rate of return on any capital investments incurred as a result of the outage

When everything comes out in the wash, if the settlement is approved, CAC will have helped to cut this rate increase down from $71 million to $13.7 million. A procedural schedule for the settlement will be established by the IURC soon, with a final order from the IURC likely to be issued in the first or early second quarter of 2023.

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Eagle Valley is a 671 megawatt fossil-gas power plant owned and operated by the monopoly electric utility, AES Indiana. The plant cost $701 million, which customers are paying for in their monthly utility bills, along with a healthy profit added in for AES shareholders. AES gets this profit even if Eagle Valley fails to produce electricity. 

Eagle Valley began operations in April 2018. Three years later, in April 2021, the plant broke and stopped producing electricity. It was down for 327 days - nearly a year! It finally came back online in March 2022.

Because Eagle Valley was not producing electricity for almost a full year, AES had to buy power in the marketplace to replace the power Eagle Valley failed to generate. AES is now before the IURC asking to charge customers almost $71 million for that replacement power.

Customers paid for Eagle Valley the entire time the plant failed to produce electricity. Customers should NOT be forced to pay for replacement power on top of what they've already paid. 

Despite evidence to the contrary, AES has touted Eagle Valley as a modern, highly efficient, and cost-effective solution to serve the needs of their customers. The plant is considered a “baseload” power plant, meaning it is supposed to run most of the time and deliver electricity 24 hours a day, 365 days a year.

Rather than taking responsibility for Eagle Valley’s breakdown, the monopoly utility is blaming their contractors and vendors for issues with the automated control systems installed at the plant. Regardless of the source of the blame, AES had the time and resources to fix the problem early on, before more damage was done to the plant, but they didn't.

AES is the party ultimately responsible for the operation and maintenance of their power plants. If they have issues with their vendors and contractors, they can pursue legal remedies against these third parties to the degree that they wish. 

One thing is certain: customers are not to blame for the issues with the Eagle Valley fossil-gas power plant, and should not be forced to pay for this boondoggle. 

AES shareholders should bear the cost of AES's failure to operate Eagle Valley in a safe and reliable manner.