IN Utilities

Research evidence excerpt

IN Utilities

Utilities

Utilities/Regulateds - Market Overweight

IN Utilities July 15, 2026

Affordability investigation to focus on ROE / tracker reviews

The Wolfe Byte

IURC's affordability report had no immediate rate actions, but they set reviews into ROEs & trackers under new

electric MYRPs. This sustains regulatory overhang, but the state remains very pro-data center growth. NI has most

IN electric exposure, modest for CNP, DUK and AEP.

Reviewing ROEs & trackers under electric MYRP framework. Today, IURC released its energy affordability report

(link). IURC also opened investigations to consider: 1) the risks & the changes in those risks, including ROE, as a result of

implementing a multi-year rate plan (MYRP); 2) the continued use of capital & expense trackers in MYRPs. These apply

to IN's 5 electric IOUs. The next datapoint will be a technical conference set for 8/7. Staff will initiate a stakeholder

process to develop & expand a list of performance incentive mechanisms for future recommendation. Recall, HB 1002

has forward test years and financial incentives (penalties or rewards) for meeting specified affordability (+/- 1bps) and

service restoration/reliability (+/- 0.5bps) objectives, which could potentially be widened. IURC will provide additional

guidance on TDSIC plan benefits & cost justification, which IN's electric and gas utilities use as an interim rider to

recover costs for ongoing infrastructure investments between rate cases. IURC will also ask IN's legislature to evaluate

mandatory RTO participation, which would eliminate the 50bps transmission ROE adder. But FERC-regulated rate base

in Indiana is modest – see Ex. 2 on pg. 4.

Assessing IN ROE exposure; Data Center growth part of solution. This investigation and AES' recent rate case order