The complete failure of resiliency in the Indiana power grid during severe weather over the past week is a sign that Indiana needs more investment in its energy grid. That is why I find it strange that every decision made by the Indiana government over the past two years has been designed to create more energy demand while investing less in infrastructure.
For example, Gov. Mike Braun recently fired utility regulator Andy Zay after he approved a rate increase for AES Indiana. The state justified Zay’s termination by claiming he improperly awarded payments and personal gifts to employees and altered a meeting agenda after being stripped of his position. Zay argues he was fired for political reasons.
The governor clearly wants the Indiana Utility Regulatory Commission to say no to every utility increase without thinking through the implications. AES Indiana is unable to keep up with the demands of the Indianapolis metropolitan area as it is, and the data center expansion Braun supports will strain the grid even further.
I moved here in 2017 and have experienced more power failures than any place I have ever lived. It is rare to go three months without coming home from work to a blinking clock telling you the power was out at some point that day.
AES Indiana is aware of this. It asked for a rate increase of $193 million to build infrastructure to help fix the grid. This ask was insanely large and the regulatory commission chaired by Zay correctly said no to many parts of the request, including an increase in its profit margin, leading to only a $71 million rate hike.
AES Indiana agreed to be acquired by a private equity-led consortium and the IURC chair got it to decrease its profit margin. In a better world, this would have led to commendation from the governor and residents of Indianapolis. Instead, Zay was publicly chastised and removed from his position for performing a miracle.
It is important to realize the same inflationary pressures that make life harder for working families are hitting AES Indiana. We need to face reality. Zay did that and lost his chairmanship.
I would much prefer a public utility without a profit margin like Citizens Energy Group, but the IURC cannot force a private utility to become public.
If Braun wants to do so, he should stop micromanaging the IURC and instead work with the legislature to create an Indianapolis version of the Tennessee Valley Authority. He has the power to create a public electrical utility that serves its mission without needing a 9.5% profit margin.
Greg Bright lives in Indianapolis. He writes about urbanism and local politics.
This article originally appeared on Indianapolis Star: Andy Zay axed AES’ rate hike. Mike Braun axed Zay’s job. | Opinion
Reporting by Greg Bright, Opinion Contributor / Indianapolis Star
USA TODAY Network via Reuters Connect
By Greg Bright, Opinion Contributor | USA TODAY Network
