Gov. Mike Braun recently fired Andy Zay, a state utility regulator, following his approval of an electricity rate increase that mostly impacts Central Indiana residents. Zay sued, arguing he was fired for political reasons.
Whether that is true or not, it is clear Braun wants regulators to stop energy bills from rising even though they have very little power to fulfill his wishes.
If Braun wants to make life more affordable for Hoosiers, he needs to deregulate the grid and take those regulators out of the equation altogether.
The IURC is a blank check for utilities
State law allows Indiana’s utility monopolies to automatically increase their rates in some cases. So-called “trackers” allow utilities to periodically raise prices to account for the rising cost of fuel, grid upgrades, infrastructure costs, pollution control, energy efficiency programs and regional grid capacity costs.
The Indiana Utility Regulatory Commission also has very little authority to deny rate increases for verifiable operational expenses, including the cost of complying with federal government rules and grid rules plus a profit of usually more than 9%, which state law has historically guaranteed regardless of performance.
By the time Zay was on the IURC, AES Indiana had already lowered its requested rate increase by more than half, to $91 million as of a settlement agreement signed in October 2025. Zay approved a rate increase $20 million lower than that. That was not enough for Braun. He expressed his disappointment that Zay was not taking on “affordability and holding utilities accountable.”
Braun fired Zay shortly before the IURC was scheduled to reconsider the rate increase. The state justified Zay’s termination by asserting he improperly awarded payments and personal gifts to employees and altered a meeting agenda after being stripped of his position as chair.
Former City-County Council Republican Josh Bain has replaced Zay. I previously wrote Bain should have gotten the job instead of Zay in the first place. Bain opposed the AES Indiana rate increase and put pressure on a data center developer to make significant commitments to his community as a councilor. He is clearly committed to affordability.
In an ideal world, the IURC would be composed of five Josh Bains. Even then, the IURC would be severely limited in what it can actually do to respond to rising energy generation costs.
It might get away with denying a rate increase or two, but if Braun’s push for affordability leads the IURC to deny utilities what state law promises, utility companies will appeal to state courts and taxpayers will foot the bill.
The solution is to change state law. Braun has pushed for a shift to performance-based ratemaking, which is a great start. It rewards utilities that meet certain benchmarks like affordability. But the best way to reward monopolies for performance is to give their customers permission to leave.
The free market can reward utilities for performance far better than the IURC. Braun should push to deregulate the energy grid.
Let the free market set energy prices
Independent companies can already build power plants. Homeowners and businesses can put solar panels on their roofs. Still, no one can sell energy directly to consumers besides Indiana’s utility monopolies.
Deregulating the grid would make it easier to build independent power plants and allow independent energy producers to sell directly to anyone. Customers would have more choices. Competition would drive prices down. Risky investments would be borne by shareholders rather than ratepayers. The cost of new infrastructure primarily serving data centers would not be directly passed on to ratepayers.
Towns and cities could pool the demand of their residents and buy from energy producers in bulk, known as community choice aggregation. Residents with solar panels on their roofs could sell excess power at a fair price to their neighbors instead of to utilities at a massive discount.
Utilities would still hold a monopoly on transmission lines and could charge a delivery fee approved by the IURC. The IURC could focus the rest of its attention on preserving competition and preventing fraud as the free market dictates prices based on what customers are willing to pay.
The free market can lower prices in ways the IURC never could, even in Braun’s wildest dreams.
Contact Jacob Stewart at 317-444-4683 or jacob.stewart@indystar.com. Follow him on X, Instagram, Facebook and TikTok.
This article originally appeared on Indianapolis Star: Mike Braun’s regulator purge won’t lower your utility bills | Opinion
Reporting by Jacob Stewart, Indianapolis Star / Indianapolis Star
USA TODAY Network via Reuters Connect
By Jacob Stewart, Indianapolis Star | USA TODAY Network
