Regulatory Matters

9 Months Ended

Sep. 30, 2021

Regulated Operations [Abstract]

Regulatory Matters

2. REGULATORY MATTERS

IRP Filing and Replacement Generation

In January 2021, AES Indiana executed an agreement to acquire a 195 MW solar project to be developed in Clinton County, Indiana and expected to be completed in 2023. On February 12, 2021, AES Indiana filed a petition and case-in-chief with the IURC seeking a CPCN for this solar project and on June 16, 2021, AES Indiana received an order from the IURC approving the project.

In July 2021, AES Indiana executed an agreement to acquire a 250 MW solar and 180 MWh energy storage facility to be developed in Pike County, Indiana and expected to be completed in 2024. The agreement requires approval from the IURC. On July 30, 2021, AES Indiana filed a petition and case-in-chief with the IURC seeking a CPCN for this solar project.

On February 26, 2021, as a result of the plans to retire approximately 630 MW of coal-fired generation at Petersburg Units 1 and 2 in 2021 and 2023, respectively, AES Indiana filed a petition with the IURC for approvals and cost recovery associated with these retirements. On August 6, 2021, AES Indiana filed an uncontested Stipulation and Settlement Agreement with the other parties in the case which includes: (1) AES Indiana's creation of regulatory assets for the net book value of Petersburg units 1 and 2 upon retirement; (2) a method for amortization of the regulatory assets; and (3) recovery of the regulatory assets through ongoing amortization in AES Indiana’s future rate cases. The Settlement Agreement also reserves all rights of all the parties with respect to the ratemaking treatment related to the regulatory assets, including the proper rate of return and mechanisms for recovery. AES Indiana retired 230 MW Petersburg Unit 1 on May 31, 2021 and has $63.1 million of Petersburg Unit 1 retirement costs, net of accumulated amortization, recorded in long-term regulatory assets as of September 30, 2021.

IURC COVID-19 Orders

As a result of the IURC's COVID-19 related orders issued in 2020, AES Indiana has recorded a regulatory asset of $5.4 million and $6.4 million as of September 30, 2021 and December 31, 2020, respectively. On August 25, 2021, the IURC closed the investigation to consider and address the impacts of the COVID-19 pandemic. For further discussion on the COVID-19 pandemic, see Note 12, "Risks and Uncertainties - COVID-19 Pandemic."

Excess Distributed Generation Rates

On March 1, 2021, AES Indiana filed a petition with the IURC for approval of its proposed rate for the procurement of excess distributed generation ("EDG") and related consumer EDG credit issues. The EDG rate will replace the current net metering program and will be offered beginning July 2022, when net metering is no longer available to new customers.

Electric Vehicle Portfolio Program

On March 2, 2021, AES Indiana filed with the IURC a request to approve its Electric Vehicle (EV) portfolio and associated accounting and ratemaking treatment. The EV portfolio aims to accelerate electric car adoption by reducing friction in the car buying process, and by providing customers incentives to optimize electric car charging during off-peak periods. The EV portfolio is designed to produce net benefits for all customers through new retail margins and grid optimization. The projected costs to successfully implement the services proposed in the EV portfolio are estimated at $5.1 million over the three year period. AES Indiana requested approval to defer as a regulatory asset and recover in future base rates the cost necessary to implement the EV portfolio, including carrying charges.