We’re all concerned about rising electric rates in Indiana. Families, farms, and small businesses are feeling the strain. Recently, some government officials have tried to draw a connection between “adding more generation capacity” and “lowering consumer bills.” It’s an appealing idea on the surface. If electricity costs too much, build more plants and the prices should come down.

But when you look at how regulated utilities actually work in Indiana, that connection simply isn’t there. New power plants do not lower residential electric bills, and they never have. Understanding why helps us make better decisions about land use and long-term planning here in Hancock County.

What Actually Makes Up an Electric Bill in Indiana

When you look closely at rate cases filed with the Indiana Utility Regulatory Commission (IURC), a clear pattern emerges. Most of what Hoosiers pay each month comes from fixed infrastructure costs, not the wholesale price of electricity.

A typical bill is made up of:

• Transmission & distribution infrastructure: 45–55%

• Fixed monthly service charges: 10–15%

• Fuel costs & riders: 15–25%

• Wholesale energy + capacity: 15–25%

This means roughly three-quarters of an Indiana electric bill consists of fixed grid and infrastructure costs—poles, wires, substations, and long-term capital investments. Wholesale energy prices represent the smallest part of what customers pay.

Even if wholesale prices fall, the impact on retail bills is limited.

Does Adding More Generation Lower Bills? The Theory vs. Reality

The idea that more power plants lower electric bills usually comes from wholesale market logic: increase supply, and prices should go down. That can happen at the grid level.

But residential bills work differently in regulated states like Indiana.

When a utility builds new generation:

• Construction costs enter the rate base

• Utilities earn a guaranteed return on equity (often around 9–10%)

• Depreciation is added to customer bills for 20–40 years

• New pipelines, switching stations, and interconnection upgrades add new fixed charges

So even when wholesale prices fall a little, the fixed portion of the bill rises faster—and that’s the part customers feel.

This is why new generation has consistently raised retail rates, not lowered them.

Is Indiana Short on Power? No.

Indiana sits in the MISO North region, which manages generation and capacity planning for multiple states. According to MISO’s 2024–2028 planning studies:

• Accredited capacity is adequate

• Reserve margins meet required levels

• Future needs are expected to be met through existing resources, planned renewables, uprates, and market purchases

In other words, Indiana is not facing a capacity shortage. The grid is meeting reliability requirements.

What’s driving bills higher is not a lack of generation—it’s ongoing capital spending on infrastructure.

How Data Centers Push Costs onto Households

This is where county-level land use decisions come into play.

Modern data centers consume very large amounts of electricity—often equivalent to a mid-sized city. To serve that demand, utilities must usually build:

• New gas-fired generation

• Gas pipelines or compression

• Switching stations

• Transmission lines

• Interconnection upgrades

Across regulated states, these costs do not stay with the data centers. They are commonly spread across all customers.

What typically happens is:

• Data centers receive discounted industrial rates

• Residential customers absorb long-term infrastructure costs

• Household bills rise

This pattern has already appeared in Virginia, Minnesota, Ohio, and other regulated markets. It is well documented.

Has New Capacity Ever Lowered Residential Bills? No.

This is the central question:

Has there ever been a case where adding new generation has lowered residential electric bills in a regulated utility state?

Across four decades of evidence in Indiana and other MISO states, the answer is:

No.

Every major construction cycle has produced the same result:

• Retail bills rise when new power plants are added

• Retail bills rise when new transmission lines or pipelines are built

• Retail bills rise when utilities expand infrastructure for industrial load growth

The only times retail rates fall are when:

• Plants are retired

• Debt is refinanced

• Fuel prices drop on their own

New generation has never lowered consumer bills in regulated utility environments.

Why the “More Plants = Lower Bills” Argument Misleads People

The confusion comes from mixing up wholesale markets with retail bills.

At the grid level:
More generation can lower wholesale prices by increasing supply.

At the customer level:
Wholesale energy represents only about 20–25% of the bill.
The remaining 75% is made up of fixed costs:

• capital expenditures

• depreciation

• riders

• transmission and distribution infrastructure

So even when wholesale prices dip, customers still face rising fixed charges. That’s why new plants almost always increase bills for households.

What This Means for Hancock County

People want lower electric bills. That’s understandable. But county planning decisions must be made using facts, not assumptions.

Here’s what the evidence shows:

• Indiana already has enough generation capacity

• New power plants do not lower residential rates

• Industrial load growth often shifts costs onto households

• Siting plants that conflict with the Comprehensive Plan creates long-term burdens

• Data center projects tend to raise local infrastructure costs

• None of this is necessary for grid reliability

Our responsibility is to protect land use, rural neighborhoods, and the direction set in the Comprehensive Plan—not to chase claims that new generation will lower bills when the record shows it will not.

Closing Thought

Hoosier families are not paying high electric bills because Indiana lacks power plants. They’re paying high bills because fixed infrastructure costs dominate the retail rate, and new plants only add more long-term expense.

Across decades of data, the conclusion is clear:
new capacity has never lowered residential bills in regulated states like Indiana.

As Hancock County considers land-use decisions that will affect the community for generations, these facts deserve careful attention.

Sources & Citations

Indiana Retail Rate Structure and Cost Drivers

• Indiana Office of Utility Consumer Counselor (OUCC). Understanding Your Electric Bill. https://www.in.gov/oucc/featured-topics/understanding-your-electric-bill/

• Indiana Utility Regulatory Commission (IURC). AES Indiana Rate Case, Cause 45643.

• Indiana Utility Regulatory Commission (IURC). Duke Energy Indiana Rate Case, Cause 42359.

• National Renewable Energy Laboratory (NREL). Retail Electricity Price and Cost Trends: 2024 Update. https://research-hub.nrel.gov/retail-electricity-price-and-cost-trends-2024-update

• Lawrence Berkeley National Laboratory (LBNL). Drivers of Recent Residential Electricity Price Increases (2025).

• FERC Form 1 Utility Filings. https://ecollection.ferc.gov/

Generation, Reserve Margins, and Grid Reliability

• Midcontinent Independent System Operator (MISO). November 2025 Planning Resource Auction Results. https://www.misoenergy.org

• Midcontinent Independent System Operator (MISO). Loss of Load Expectation Study (2024).

• PJM Interconnection & MISO. Cost Allocation and Resource Adequacy Reports.

• NREL. Retail Rate Projections for Long-Term System Planning (2022).

Evidence on the Impact of New Generation on Retail Bills

• NREL. Retail Electricity Price and Cost Trends: 2024 Update.

• LBNL. Residential Electricity Prices Surge Ahead of Commercial Prices (2025).

• National Regulatory Research Institute (NRRI). Electricity Cost Drivers in Vertically Integrated Utilities.

• U.S. Energy Information Administration (EIA). State Electricity Profiles and Retail Price Data. https://www.eia.gov/electricity/state/

• IURC Rate Case Archives for generation additions, including Edwardsport and recent gas turbine filings.

Industrial Load Growth, Data Centers, and Cost Shifting

• LBNL. Retail Electricity Prices Surge Ahead of Commercial Prices (2025).

• NRRI. Cost Allocation in Regulated Electricity Markets.

• Virginia State Corporation Commission (SCC). Data Center & Rate Impact Filings. https://scc.virginia.gov

• Minnesota Public Utilities Commission and Ohio Public Utilities Commission. Rate Case Testimony on Load Growth and Capital Spending.

• EIA Annual Electric Power Industry Reports, examining industrial-rate discounts and systemwide cost impacts.