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Elected officials — especially in executive positions like governor, mayor, or, say, president — tend to support economic development writ large, looking to bring jobs to their constituents and expand the tax base. By that same token, they also tend to be quite sensitive to rising costs — especially utility bills, for which voters tend to hold state governments accountable, per Heatmap polling.
That puts governors — especially Republican governors, who are often more friendly to business and more likely to buy into arguments proffered by the White House about national security and economic competitiveness — in a tricky position as both the data center buildout and opposition to it gain momentum across the United States. No one embodies the dilemma more than Indiana’s Governor Mike Braun, who has positioned himself as a champion of data centers while also going on the rhetorical warpath against the utility AES Indiana and the Indiana Utility Regulatory Commission.
His latest barrage against Indiana’s electricity ratemaking process started in mid-June, when the utility commission approved a rate case from AES Indiana granting the utility a $71 million revenue increase across two phases, the first beginning in July, each of which will raise monthly bills by “less than $5 per month,” according to the company. AES had originally asked for a $190 million increase, but thanks in part to intervention from Indiana’s Office of Utility Consumer Counselor, a public advocate in utility rate hearings, it was eventually whittled down.
The utility commission handed down its decision on June 17. Later that same day, Braun issued a blast against AES and the IURC, saying in a statement that “my top priority is affordability, which is why I am deeply disappointed by the IURC’s approval of another AES rate increase. Hoosiers have spent years tightening their belts and making tough financial decisions. It’s time for utility companies to do the same.” The next day he was back with another fire-breathing statement: “Yesterday’s decision by the IURC to allow another rate increase by AES is unacceptable,” he said, and called for a rehearing of the rate case.
The regulator is in the midst of an “investigative inquiry on energy affordability” launched earlier this year that has required the state’s five large investor-owned utilities to make presentations on their ratemaking. “We’ve heard the concerns about the burden utility bills have on families and businesses across the state, and we are committed to evaluating short- and long-term solutions related to affordability,” then-Chair Andy Zay said in a news release in February announcing the investigation.
Braun, apparently, wasn’t convinced. By Monday, June 22, he’d removed Andy Zay as chairman of the IURC, and installed Commissioner Anthony Swinger to lead the regulator. “Affordability is my top priority,” he reiterated in a post on X, “and I am confident Chairman Swinger will deliver on that priority for Hoosiers.”
When asked about this past month’s events, AES Indiana said that it “respects the independence of the regulatory process and works constructively with all stakeholders. We remain focused on executing under the final approved order and delivering for our customers,” a spokesperson told me. Neither Braun’s office nor the IURC responded to my requests for comment.
The rhetoric was not particularly new for Braun. Last fall, for instance, he declared of utility rate hikes, “we can’t take it anymore,” and ordered the state’s utility consumer advocate “to evaluate utilities’ profits and find cost-saving measures to ease the financial burden on Hoosiers.” That said, his swift actions of late surprised some outside observers. “While Gov. Braun has made utility affordability a priority, the abrupt leadership change at the IURC is nonetheless surprising,” Jefferies analyst Julien Dumoulin-Smith wrote in a note to clients. “We perceive a cautionary tone for Indiana regulation; future orders will likely be more visibly defensible on affordability.”
Indiana sits at the transmission-rich crossroads between the Midwest and East Coast and has long been governed by business-friendly Republicans, and thus has thus become a locus of data center construction — and backlash. Twenty-one out of 92 counties in the state have enacted some sort of pause or ban on data center construction, according to Heatmap Pro data. Earlier this year, the Indianapolis City Council passed a resolution calling for a pause on approvals for data centers. When the White House earlier this year got large technology companies to commit to the Ratepayer Protection Pledge, in which they agreed to fund any additional grid costs incurred by their data centers, it was arguably following in the footsteps of Indiana, which negotiated a large load tariff last year meant to shield customers of Indiana Michigan Power, a subsidiarity of AEP, from data center-related costs.
Braun’s position in Indiana also mirrors the ideological divide in Washington — Braun supports data center development while demanding that utilities figure out a way to spare ratepayers. Advocates to his left, both at the state and federal level support a pause on all data center construction. André Carson, one of two Democrats representing Indiana in the House of Representatives, introduced a bill that would enact a nationwide data center moratorium alongside Alexandra Ocasio-Cortez and Bernie Sanders.
Citizens Action Coalition’s Ben Inskeep has attributed the price hikes over years to coziness between regulators and utilities in the r and tend to favor a moratorium or pause on data center development to develop consumer protections. (For what it’s worth, most Americans seem to prefer the leftward road.) .
Indiana’s typical household electricity bills have indeed risen in the past couple of years, from about $113 per month two years ago to $120 per month as of May, while prices have risen 19%, according to Heatmap and MIT’s Electricity Price Hub. Prices are up 12% in the past year, according to the Heatmap-MIT data, while the electricity prices nationwide have risen 6%.
Attributing rate hikes to data centers is a notoriously tricky exercise, however, and researchers have generally found that in most states, it’s hard to discern an exact connection. When pressed, Indiana utilities have claimed that higher prices are necessary to fund improvements for reliability or cold weather. Some critics of Indiana utilities, like Citizens Action Coalition Ben Inskeep, attribute years of rate hikes to coziness between the state legislature and utilities and the gradual weakening of regulators who could push back against hikes. Citizens Action has called for a moratorium on data centers in the state.
In spite of his harsh words against utilities, Braun has generally supported data centers as part of an overall economic development strategy, appearing at the groundbreaking for a $10 billion Meta data center project in Lebanon, Indiana, earlier this year. “In Indiana, it’s clear we’re a very easy state to do business in, but the communities are going to have to approve it,” he said on Fox Business earlier this month, setting himself up as a champion of local communities and ratepayers. “In Indiana, if you’re coming in, you’re paying for all of the construction and the generation of electricity, and you’re going to put more electrons onto the grid, taking prices down,” he said.
Braun’s consumer-and-conservation-minded critics have taken aim at this exact claim in pushing for a pause on development.
“We are one of the three or four Ground Zero states for data center development. We’re extremely attractive to data centers,” Kerwin Olson, executive director of Citizens Action Coalition, told me. “That happened at the same time as bills skyrocketing.”
Olson pointed out that Indiana’s data center boom has come at the tail end of a series of controversial economic developments, including a proposed hydrogen hub, carbon capture and storage projects, and a proposed water pipeline. “Here comes Amazon, here comes Meta, Google, and all hell just broke loose,” Olson said.
Referring to Braun, Olson said, “We don’t doubt his sincerity about his concern about affordability. We disagree with him on these solutions that need to happen.”
