The price of some Hoosiers’ utility bills hangs in the balance as the former chair of a state regulatory agency has filed a lawsuit against Indiana Gov. Mike Braun, alleging that Braun should not have removed the commissioner from his position amidst the debate surrounding a rate increase for AES Indiana.
The lawsuit was filed Aug. 10 by Andy Zay, the former chair of the Indiana Utility Regulatory Commission. Zay was fired from the agency about six weeks after he and two other commissioners voted in favor of AES’s controversial $71 million rate hike, which Braun has publicly disapproved of. According to Zay’s lawsuit, the governor did not have legally sufficient cause to remove him from the regulatory commission.
“The statute does not permit an IURC Commissioner to be removed at the Governor’s pleasure, based upon political disagreement, or simply because the governor disagrees with the commissioner’s exercise of independent judgment,” the lawsuit filed by Zay reads.
Braun’s office did not immediately respond to a request for comment from IndyStar for this article and neither did attorneys representing Zay.
Zay’s lawsuit asks the court to immediately reinstate and restore Zay’s position as an IURC commissioner. The lawsuit comes at a pivotal time for the regulatory commission. The commission may vote on an item that could reverse the previous decision approving the rate increase for AES Indiana.
Zay was appointed by Braun to the IURC in January 2026 but the two men were on opposite sides of the AES rate increase debate. Zay voted in favor of the rate increase in June. Last week Braun dismissed Zay from the commission, accusing him of missing a required financial disclosure and making improper payments to employees. The change also spoke to a rift between the two men: Braun told reporters that he was “disappointed that he (Zay) didn’t take on affordability and holding utilities accountable.”
Meanwhile, the Office of Utility Consumer Counselor, the state agency that advocates for lower prices for Indiana ratepayers, announced it would seek reconsideration of the AES rate case. That leaves the OUCC with the difficult task of convincing two or more commissioners to reverse the previous decision on the AES rate increase. This task could be more difficult if the court rules in Zay’s favor and reinstates him as an IURC commissioner, since he previously voted in favor of the rate increase.
Braun has already replaced Zay on the commission with former Indianapolis City-County Councilor Josh Bain, who is also a defendant in the lawsuit filed by Zay.
“Bain is sued in his official capacity because commissioner Zay maintains that commissioner Zay’s removal was unlawful, that no lawful vacancy arose in his IURC Commission seat, and that commissioner Zay possesses the superior legal right to the position presently occupied by Bain,” the lawsuit reads.
The lawsuit also names Matthew Brown, director of the Indiana State Personnel Department; Steve Carter, deputy counsel for Appointments for the Office of the Governor; Suzanne Jaworowski, Indiana Secretary of Energy and Natural Resources, and the State of Indiana as defendants. None of those defendants, including Bain, immediately responded to a request for comment from IndyStar.
Zay’s lawsuit alleges he was removed from the commission by the governor without cause.
“Neither Governor Braun in his removal letter nor Brown nor Carter provided commissioner Zay with any cause for his removal,” the lawsuit reads. “Commissioner Zay was not provided notice of any specific allegations before his removal, was not afforded an opportunity to respond to any allegations, and was not informed of any process through which the purported grounds for his removal would be adjudicated.”
The IURC’s deadline to take up the reconsideration petition of the AES rate increase is Sept. 5, 60 days after the OUCC filed the petition. If the IURC does not act on the reconsideration petition by the deadline, the rate increase will remain in place.
Households in Indianapolis have already started paying for the first phase of the rate increase, which took effect in July. For a household using 1000 kilowatt hours per month, the increase is less than $1 a month, AES spokesperson Claire Rice said in a statement to the IndyStar.
If the IURC reverses its decision, it could decide that AES owes customers a refund. The OUCC also notified the Indiana Court of Appeals that it intends to appeal the rate increase in court – a process that could stretch on for several months – if the IURC does not approve its request for reconsideration.
If the IURC keeps its authorization in place and the rate increase moves forward, a second phase will begin impacting customers’ bills in January. The second hike could add up to $5 more in monthly costs for a household using 1,000 kilowatt hours a month, AES estimated in July.
IndyStar reporters Tilly Robinson and Sophie Hartley contributed to this article.
Contact Jake Allen at jake.allen@indystar.com. Follow him on X, formerly Twitter, @Jake_Allen19. Click here to get Hamilton County news sent straight to your inbox and subscribe to the IndyStar North newsletter.
This article originally appeared on Indianapolis Star: Former state utility board chair sues Gov. Mike Braun over his firing
Reporting by Jake Allen, Indianapolis Star / Indianapolis Star
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By Jake Allen, Indianapolis Star | USA TODAY Network
