US Diversified Utilities: New Indiana Report Seeks Ways to Lower Utility Bills, Slightly Negative Near Term Outlook for ROEs & IN Utilities

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US Diversified Utilities: New Indiana Report Seeks Ways to Lower Utility Bills, Slightly Negative Near Term Outlook for ROEs & IN Utilities

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15 Jul 2026 12:37:11 ET │ 14 pages

US Diversified Utilities

New Indiana Report Seeks Ways to Lower Utility Bills, Slightly Negative

Near Term Outlook for ROEs & IN Utilities

CITI'S TAKE

This morning, the IURC released its affordability report and formally

launched ROE and tracker investigations, incrementally raising regulatory

risk for Indiana utilities (NI, DUK, AEP, CNP, etc.). The Commission will Ryan LevineAC

evaluate whether HEA 1002’s 3-year rate plan cadence and improved +1-212-816-6555

earnings stability warrant lower authorized ROEs, while reassessing ryan.levine@citi.com

tracker treatment. The report remains supportive of large-load growth but Amber Zhao

requires utilities to show tangible existing-customer savings, a favorable +1-212-816-0644

readthrough for NIPSCO’s ~$1B of expected customer savings over 15 amber.zhao@citi.com

years. Separately, the IURC report suggests eliminating the 50bp FERC

RTO ROE adder and expects additional TDSIC guidance in coming weeks.

A technical conference will take place on August 7. Lastly, mention of

IURC reviewing holding companies in Indiana utility M&A is likely to

reduce likelihood of future Indiana utility M&A (IURC commissioners had

historically been supportive of M&A of Indiana utilities). In our view, report

is slightly cautious all IN utilities.

ROE/Trackers in Focus as HEA 1002 Changes Risk Balance: The IURC formally

opened investigations into authorized ROEs and trackers, arguing HEA 1002’s 3yr

rate plans provide increased stability and a more predictable filing cadence that may

warrant a “reasonable risk adjustment” to utility returns. The tracker review will