Indiana's first data center order under its large-load law sets a template AES Indiana must now deliver on

Indiana now has a working example of how its 2025 large-load law is meant to function. The harder part for AES Indiana starts now: building to the demand it was approved to serve, in stages, without letting costs drift onto its existing customers.

On Oct. 7, the Indiana Utility Regulatory Commission approved AES Indiana's large-load growth plan, a framework built around Google's proposed data center in Monrovia, in Morgan County. The utility estimates the arrangement will produce about $770 million in system fixed-cost savings for existing customers over the life of the project.

The order rests on House Enrolled Act 1007, which requires large-load customers to pay their own way. AES Indiana says that under the approved plan, Google's rates cover all of the energy, infrastructure, transmission and generation costs of serving its facilities. Google also committed to an 80% minimum demand obligation, so it pays the cost of service at that level even if actual usage comes in lower than projected.

The savings figure is a model, not a refund. AES Indiana says it comes from spreading fixed system costs across more load, and it depends on the data center ramping roughly as planned. The utility has said investment will be staged and matched to actual demand, and that infrastructure built for the new load will become part of the AES Indiana system. That staging is what regulators, and other utilities drafting their own large-load tariffs, will be watching as construction proceeds.

"Throughout this process, we've shown that responsible growth can create value for existing customers when appropriate protections are in place," said Brandi Davis-Handy, president of AES Indiana, who called the approval an important milestone for the state.

As an early test of the law, the Monrovia terms are likely to shape the filings that follow. The contract AES Indiana filed in April included financial assurances, minimum usage commitments and exit provisions meant to keep stranded costs off existing customers if circumstances change. Other Indiana utilities negotiating with hyperscalers now have a commission-approved reference point.

AES Indiana serves about 533,000 customers in Indianapolis and Central Indiana. The order lands as its parent, AES Corp., works through regulatory reviews of its pending $15-a-share cash sale to Horizon Parent, L.P., which AES's securities filings say is jointly controlled by vehicles affiliated with Global Infrastructure Management and the EQT Infrastructure VI fund. AES describes the buyers as Global Infrastructure Partners, a part of BlackRock, and EQT, with the California Public Employees' Retirement System and the Qatar Investment Authority as co-underwriters. The deal received U.S. foreign-investment clearance on Aug. 27 and Ohio regulators approved it on Sept. 17; other regulatory approvals are still pending.