On Oct. 7, the Indiana Utility Regulatory Commission approved AES Indiana's plan to buy new battery storage and solar capacity and to build grid infrastructure for a Google data center in Monrovia, in Morgan County. According to the commission's order in Cause No. 46394, all five commissioners concurred. The order puts the estimated project cost at $737.3 million. AES Indiana says its contract with Google protects existing ratepayers. A Nov. 10 analysis by Utility Dive points to a narrower issue that consumer advocates contest: about $73.8 million in transmission network upgrades will go into the utility's rate base and be recovered from all customers.

Utility Dive framed the case as one example of a question regulators and utilities across the country face: how to tell which costs a single large customer causes and which costs benefit the whole system.

What the Commission Approved

The order says AES Indiana, legally Indianapolis Power & Light Company, filed its petition on April 22, 2026, and filed an amended verified petition on May 6. The utility's newsroom announced the filing on April 23 and said it was made under HEA 1007, a law passed by the Indiana General Assembly in 2025.

The order lists three resource projects in the portfolio:

  • Foundry Works, a 200-MW battery energy storage system (BESS)
  • Hardy Hills, a 130-MW BESS
  • Crosstrack, a 130-MW solar facility paired with a 130-MW BESS

The order says the portfolio supports 390 MW of new load with 460 MW of new four-hour storage by 2030. New Project Media's report on the approval adds detail on ownership. It says the order approves AES Indiana's proposed joint-venture ownership structure, says Invenergy developed Crosstrack and Foundry Works, and says Hardy Hills is a utility self-build. New Project Media lists Hardy Hills at 170 MW. The commission's order lists the Hardy Hills battery at 130 MW, and this article uses the order's figure.

The order names two intervenors in the case: Citizens Action Coalition of Indiana and the AES Indiana Industrial Group.

How the Contract Is Supposed to Protect Other Customers

According to Utility Dive, Indiana law requires a large-load customer to reimburse at least 80% of the costs reasonably allocable to it. The order records AES Indiana's position that the arrangement exceeds that statutory floor because the electric service agreement recovers 100% of the costs reasonably allocable to the customer. The commission found that the customer will reimburse at least 80% of the project costs reasonably allocable to it, as the statute requires.

The order also records figures AES Indiana gave for what the customer would contribute toward the utility's existing fixed costs through the end of the contract period: approximately $300 million at the minimum contracted demand level, and approximately $770 million at the expected level of demand. Utility Dive attributed the same figures to AES.

AES Indiana's April press release makes the same argument in broader terms. The company said Google will pay 100% of its own energy use and of the new infrastructure needed to serve it. Citing current modeling, the company said serving the data center through a customer-specific contract is expected to deliver over $770 million in customer savings over the next 15 years. The release also put the related new energy infrastructure investment at approximately $1.3 billion. That figure is AES Indiana's, and the release does not tie it to the $737.3 million project cost in the commission's order. Brandi Davis-Handy, president of AES Indiana, and Will Conkling of Google are both quoted in the release.

The $73.8 Million Question

Utility Dive's reporting describes the transmission costs in groups. Google will pay about $32 million upfront for the direct connection to its facility. A separate $73.8 million in network upgrades will be included in AES Indiana's transmission rate base and recovered through future rates from all customers, including residential ones. Utility Dive reported that the Midcontinent Independent System Operator (MISO) approved some of those network upgrades, which include a new substation, citing reliability and load growth.

Utility Dive reported that Ben Inskeep of the Citizens Action Coalition, a consumer advocacy group that intervened in the case, criticized the treatment. He said the upgrades are specifically driven by the Google data center and that the utility decided to spread the costs to other ratepayers. The commission did not accept that the upgrades should be charged only to the data center. Utility Dive quoted the order: "although the Customer may be the impetus for the network upgrades being made, this does not preclude the upgrades from providing system-wide benefits."

Two other details in Utility Dive's report bear on how the costs are counted. According to the publication, the substation planned for the project is designed for 1,200 MW of load, even though the order covers 390 MW. Utility Dive also reported that Google's rates will be based on a 90% load factor. AES says that is high compared with all other customers, while critics said it amounts to a 10% discount. The order said the 90% estimate "recognizes the Customer's substantial and continuous utilization of the system capacity without assuming that the Customer's maximum demand occurs exactly when the system peaks each month."

AES Indiana defended the arrangement. Utility Dive quoted Patrick Maguire, AES Indiana's vice president of commercial, saying revenue from Google will "more than offset" residential customers' portion of the network upgrade costs. An AES Indiana spokesperson told Utility Dive that Google's rate includes a separate incremental-cost test designed to recover the incremental costs of serving Google, including the network upgrades.

What the Order Left Open

The commission did not set how Google's load will be treated in AES Indiana's rate structure. The order records that cost allocation and rate design principles for the Monrovia Project will be addressed in future base rate case proceedings. The commissioners' vote approved the resources, the infrastructure and the contract terms. How the costs of serving a 390-MW customer will be divided among residential, commercial and industrial classes is not decided in this order.

The order points to the same later review. It says the commission and stakeholders can assess cost of service and rate design matters in the utility's next base rate proceeding, expected to be filed in 2029, when AES Indiana will have actual load data for the customer. Utility Dive reported that much of the service agreement, including monthly energy and demand charges and riders, is redacted in the public record.

What Happens Next

According to Utility Dive, AES Indiana's next rate case is scheduled for 2029, and the utility plans to share a full cost-of-service study, cost allocation and rate design principles associated with the Monrovia Project at that time. The Oct. 7 order likewise says cost allocation and rate design matters can be assessed in the next base rate proceeding, which is expected to be filed in 2029. Until new rates are established, Utility Dive reported, the utility plans to recover the project costs through its Environmental Cost Recovery mechanism, netted with contract revenues.

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