Indiana utility regulators unanimously approved a plan for utility AES Indiana to build the solar, battery storage and electric line project needed to power a 390-megawatt Google data center project in Monrovia.
At the Oct. 7 meeting, the Indiana Utility Regulatory Commission said the proposed project meets a 2025 state law that requires data centers and other large electricity users to cover 80% of costs reasonably assigned to it. The law also requires the plan to protect existing and future customers. The Monrovia project is the first data center filed under the new law.
AES estimates the infrastructure investment at $1.3 billion.
AES Indiana says Google will pay all of the costs. But the order says it is reasonable for existing customers to be assigned a share of the cost upgrades. The Citizens Action Coalition objected to this. AES Indiana says Google’s payments to the utility system will make up for customers’ costs.
The Monrovia project, southwest of Indianapolis in Morgan County, will include two battery energy storage systems and a solar facility. The total project cost is $737.3 million.
Commissioner Joby Jerrells said AES Indiana had testified that Google would pay for at least 100% of the costs under the requirement.
“Not only does this agreement satisfy the statutory requirement, it exceeds it substantially,” Jerrells said.
Regulators put their approval in a written order. It explains the energy project is designed to mainly serve large electricity customers, like the Google data center, while protecting current AES customers.
Several groups joined the case, including the Indiana Office of Utility Consumer Counselor, a consumer watchdog; Citizens Action Coalition, a nonprofit consumer advocate; the AES Indiana Industrial Group; and several residents of Morgan County.
Brian A. Wright, an electric utility analyst with the consumer counselor’s office, testified that power line transmission upgrades wouldn’t be necessary without the data center’s energy needs. The office did not oppose the plan.
“What we’re concerned about is a $74 million set of transmission upgrades that AES Indiana identified that it had to make specifically because this Google data center is being added to the grid,” Ben Inskeep, program director at Citizens Action Coalition, said.
AES US Utilities CEO Gustavo Garaviglia said in testimony that Google will pay $32.3 million for direct connection facilities, while $73.8 million in network upgrades will be included in AES’s transmission rate base and recovered in future retail rates.
Bickey Rimal, vice president of consulting firm Concentric Energy Advisors, testified for AES that it wouldn’t be reasonable to assign all transmission upgrades to Google because the utility hadn’t done that with a customer in the past, and the upgrades would benefit all customers. The commission agreed.
Inskeep said the data center, not the customer, should foot the upgrade costs.
“We already have high bills here in Indianapolis,” he said. “We don’t need more rate increases caused by data centers to be added on top.”
In a statement, AES Indiana President Brandi Davis-Handy called the approval “an important milestone.” The company has said that the partnership with Google protects existing customers.
“None of those costs are shifted to existing AES Indiana customers,” it said.
Google’s head of data centers in the Americas, Will Conkling, said that the company is paying for 100% of its electricity and any new infrastructure required to serve them.
AES said the agreement will benefit customers by spreading fixed costs to more users and bring the cost per customer down, and that its modeling estimated about $770 million in savings during the term of the project.
The contract with Google lasts at least 15 years, according to AES, and includes assurances that customers won’t get stuck paying for upgrades if Google scales back or leaves the project.
AES also requested to keep certain information confidential, including portions of temporary, electric and construction service agreements and testimony. The Citizens Action Coalition raised concerns about that.
The commission approved the request for confidentiality because the information includes trade secrets exempt from public disclosure under state law.
A spokesperson for AES Indiana, Claire Rice, said in response to emailed questions seeking details about the agreements and what customer protections exist, that the company’s filings could be found in the case.
“I want to clarify that the agreements are filed publicly with only certain competitively sensitive and confidential information redacted. The terms and details of the customer protection provisions and customer benefits have not been redacted,” she said.
The electric, construction and temporary service agreements are filed as exhibits, but they include many redactions, including dollar amounts, rate schedules and timelines.
The utility commission recently agreed to reconsider its June approval of a rate increase for AES Indiana. It will consider evidence related to the Monrovia data center project and the announced acquisition of AES’s parent company by BlackRock and other investors. The review will continue into 2027.
Contact WFYI data journalist Zak Cassel at zcassel@wfyi.org
