The AES Indiana Story: Settlement Clears the Path to a September 8 Rate Decision

The second major development this week involves central Indiana. On August 22, Governor Braun's office announced a $625,000 settlement ending former IURC Commissioner Andy Zay's wrongful-termination lawsuit. The payout breaks into three lump sums: $185,000 in W-2 wages, $300,000 to resolve other claims, and $140,000 in attorneys' fees.

Neither side admitted wrongdoing. Both sides agreed to dismiss the Marion Superior Court lawsuit.

What the settlement resolves: AES Indiana had used the procedural cloud created by the Zay lawsuit to pause the rehearing on its approved $71 million rate increase. That pause is now cleared. The reconstituted IURC (four of five commissioners are now Braun appointees) faces a live September 8 deadline on the Office of Utility Consumer Counselor and Citizens Action Coalition petitions to revisit that rate decision.

With four of five commissioners appointed by Braun and Braun's own OUCC petitioning for reversal, the base case is a partial or full rate rollback. But this is not a settled outcome.

What the settlement does not resolve: the June 15 phone call from Secretary of Energy Suzanne Jaworowski to sitting Commissioner Zay (two days before the AES rate vote) was never adjudicated as lawful or unlawful. That unadjudicated ex parte question is exactly what AES Indiana's lawyers will raise in any appellate challenge to a reversed rate order. AES Corporation is currently the target of a $33.4 billion buyout by a BlackRock-led consortium, with analysts flagging AES Indiana's data center pipeline as a valuation driver. They will contest a rate reversal aggressively.

Walmart and Eli Lilly (named parties to the October 2025 partial settlement the IURC undercut) have direct financial exposure here. So does every central Indiana manufacturer on AES Indiana's system.