Fixed charges in Indiana

What are fixed charges?

Your total utility bill is the sum of various charges, some of which increase or decrease depending upon how much electricity you use. Other charges do not change, regardless of how much electricity you use. These are fixed charges.

Fixed charges in Indiana

Indiana investor-owned utilities (IOUs) levy above-average fixed charges compared to the rest of the country, yet they keep asking for more. In recent years, Indiana IOUs have been some of the most aggressive in the country in their attempts to raise fixed charges for Hoosier customers. For example, in 2023, AES requested to raise theirs to $25. If approved that would put them second most expensive in the nation. Also in 2023, CenterPoint requested more than doubling their fixed charge, raising it to $23.20. If approved it would be the third most expensive in the nation.   

Fixed charges disproportionately impact low and moderate income Hoosier households by forcing these families to put a greater percentage of their income towards their electric bill than high income or high electricity use households. No matter how much electricity you save, high fixed charges affect your ability to pay other bills, buy groceries or purchase medically-needed prescription medicines. These charges especially affect seniors on a fixed income.

Fixed charges also undermine the economics of rooftop solar and energy efficiency by disincentivizing customers from using less electricity from their utility. After all, why bother trying to cut down on your energy usage or produce your own energy when your utility bill can only go so low? Fixed charges also disincentivize the development of new efforts to put more power in the hands of consumers as part of a larger attempt to reform the electric grid. Ultimately, they  lock ratepayers into higher rates and exempt utilities from having to find more innovative and cost-efficient ways to provide the services their customers want.

Additional resources

• NIX THE FIX! Say NO To Higher Monthly Fixed Charges! – Citizens Action Coalition
• Indiana once had some of the cheapest electric bills. Not anymore. – State Affairs