Feb. 27, 2026, 5:27 a.m. ET
- Gov. Mike Braun signed House Bill 1002 into law on Feb. 26, finalizing the state’s new approach to utility regulation.
- In the short term, low-income Hoosiers could see changes to their electric bills this summer.
- The long game involves a regulatory overhaul that state legislators hope will incentivize utilities to prioritize affordability.
Gov. Mike Braun signed a dense piece of energy legislation, flush with bipartisan support, into law on Feb. 26 that aims to address the state’s energy affordability crisis.
Many Indiana state legislators, lobbyists and consumer advocates hope the bill will bring relief to Hoosiers through both short term fixes and a longer term scheme to restructure how the state regulates electric utilities.
Here’s how it works:
Flatter bills for some
Come summer, some Hoosiers will see the same charge, month after month, on their electric bills.
HB 1002 mandates electricity suppliers in Indiana — except for municipally owned utilities — to apply “levelized billing plans” to households who are eligible and have applied for state home energy assistance programs, like EAP. This will largely impact low-income customers of one of the five major investor-owned utilities — AES, Duke Energy Indiana, Indiana Michigan Power, NIPSCO and CenterPoint Energy.
So-called budget billing already exists in some capacity. Utilities look at several months of customer bills to determine an average flat fee to charge each month, which can provide stability for customer budgeting and relieve the stress of high-usage months, like the July and August.
But the system can also lead to budget shock through the form of “reconciliation.” Household electricity use still ultimately determines what a customer owes. So once or twice a year, the utility will either charge the difference, or in some cases, credit the account, to reconcile actual electricity use and what a customer paid.
Households can opt-out of budget billing under HB 1002, but if eligible customers do not, they will see the change on their first monthly billing cycle beginning after June 30, 2026.
Extreme heat protections
Currently electricity suppliers in Indiana cannot terminate electric or gas service to certain residential customers from December to mid-March who are qualified for state home energy assistance programs.
This winter moratorium will now extend to extreme heat events for those customers. The change will ensure these households can use fans or air conditioners when the NWS issues heat indexes of 95 degrees Fahrenheit or above.
Keeping utilities accountable
The bill creates a rigid information highway between the state and electric utilities. This year, utilities will send quarterly customer reports to the Office of the Consumer Counselor, Indiana’s agency that advocates for ratepayers and affordability. The reports must outline details like the number of customers, levelized billing plans, account delinquencies and disconnections.
The long game
The most obscure piece of HB 1002 is also, perhaps, the most significant: this year, Indiana will enter a new regulatory landscape.
Indiana utilities need approval and oversight from the Indiana Utility Regulatory Commission to set customer rates and company revenue. Historically, utilities have had flexibility with how often they can ask for increases, leading some consumer advocates to argue that the investor-owned utilities can recover too many costs from ratepayers too often.
HB 1002 restructures utility regulation into a system known as performance based ratemaking.
Utilities will now face stricter timelines with the ability to file rate cases only every three years. When they file, the state utility commission will evaluate their efforts to address affordability, reliability and resilience, akin to a performance review, Shonkwiler explained as she presented the bill to the House Committee on Utilities, Energy and Telecommunications in January. If utilities don’t deliver to the state’s standards, they can be penalized.
“Shifting to a performance-based regulatory structure ensures utilities prioritize the outcomes that matter most to Hoosiers — lower costs and reliable service,” Shonkwiler added in a Feb. 26 email to IndyStar. “Our goal is to work with utilities to address needed improvements, prioritize ratepayers and continue upholding our five pillars of energy: reliability, resilience, stability, affordability and environmental sustainability.”
The state utility lobby, the Indiana Energy Alliance, originally opposed the bill but now is working to adjust to the upcoming regulation overhaul.
“While we expressed concerns about certain provisions in the bill, we respect the General Assembly’s intent to improve affordability, a goal which we share,” IEA president Danielle McGrath wrote in an email. “Work is now underway to meet the timelines established in the legislation for a low-income program, a shift toward levelized billing for customers on federal utility bill assistance, and implementation of performance-based ratemaking.”
A heaping pile of failed amendments
Most of the lingering dissatisfaction with HB 1002 derives from the wish that it did more to relieve Hoosier ratepayers, said Kerwin Olson, the executive director of the consumer advocacy group the Citizens Action Coalition.
Some Indiana legislators did try to expand the bill’s scope: Over a dozen amendments failed to advance over the past two months. Failed proposals included prohibiting sales tax, reconnection fees and deposits as well as barring service termination for customers who have electricity-supported medical needs.
“Hopefully, this is just a starting point. Hopefully as we put all these things into practice, we discover where we could get better,” Olson said. “Hopefully it’s not the end of the conversation.”
IndyStar’s environmental reporting is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.
Sophie Hartley is an IndyStar environment reporter. You can reach her at sophie.hartley@indystar.com or on X at @sophienhartley.