Indiana Electricity Rates: What to Know

Indiana electricity bills just saw their biggest spike in 20 years. The average Hoosier household now pays around $142-145 per month, and some utility customers are paying over $220. Statewide, bills jumped 17.5% in a single year ending July 2025, following a 9.3% increase the year before. If your electricity bill feels like it's climbing faster than ever, you're not imagining it.

The average residential rate in Indiana sits at roughly 17 cents per kilowatt-hour as of early 2026, up from 14.55 cents just a year earlier. That's still about 19% below the national average, but the gap is closing fast. The reasons come down to a massive energy transition: Indiana is the fourth-largest coal power state in the country, and replacing aging coal plants with natural gas, wind, and solar requires billions of dollars in new infrastructure. Those costs land on your bill.

Unlike states with deregulated markets, you cannot shop for a different electricity provider in Indiana. You're assigned to one of five major investor-owned utilities based on where you live, and the Indiana Utility Regulatory Commission (IURC) sets the rates. That means your best path to lower bills runs through understanding your utility's rate structure, taking advantage of rebate programs, and making targeted efficiency upgrades. This guide covers all of it.

How Indiana's Electricity Market Works

Indiana runs a fully regulated electricity market. Each utility operates as a regulated monopoly with an exclusive service territory. In exchange for that monopoly protection, the IURC regulates their rates, approves new power plant construction, and oversees service quality. You cannot switch providers the way customers can in Texas or parts of the Northeast.

The IURC's authority covers rate changes, certificates of need for new generation, demand-side management programs, renewable energy initiatives, and integrated resource planning. When a utility wants to raise rates, it must file a case with the IURC, present evidence justifying the increase, and go through a public review process before any change takes effect.

Two organizations advocate for consumers in this process. The Office of Utility Consumer Counselor (OUCC) is a state agency that represents ratepayers in utility proceedings. The Citizens Action Coalition is a nonprofit that has been fighting rate increases and pushing for transparency in Indiana utility regulation for decades.

Recent political developments have put utility affordability front and center. Governor Mike Braun, who took office in January 2025, made rising electricity costs a signature issue. He replaced the entire IURC board to increase transparency and accountability. In February 2026, he signed House Enrolled Act 1002, which changes the rate approval process by tying rate increases to utility performance data, requires more predictable billing, and mandates new programs for low-income customers. The IURC also opened a formal investigation into rising energy prices in March 2026, calling all five major utilities to testify.

Braun's blunt assessment: "We cannot take it anymore."

What Hoosiers Actually Pay

Let's look at the real numbers. The average Indiana household pays approximately $142-145 per month for electricity, which works out to about $1,702 per year. The national average is $147-163 per month ($1,882 per year), so Indiana remains relatively affordable — but the trend line is heading in the wrong direction.

The average residential rate as of early 2026 is roughly 17 cents per kWh. In January 2025, it was 14.55 cents. By January 2026, it had risen to 16.19 cents. The 2025 full-year average came in at 15.33 cents per kWh, which was 8.36% below the national average of 16.73 cents.

Your actual bill depends heavily on which utility serves your address. The range between the cheapest and most expensive utility in Indiana is dramatic — a $65 per month difference for the same 1,000 kWh of usage. If you want to understand every line item on your statement, our guide on how to read your electric bill and spot overcharges walks through each charge.

What's on Your Bill

A typical Indiana residential electricity bill breaks down into several components:

Customer charge — A fixed monthly fee ranging from $10-20 depending on your utility, charged regardless of how much electricity you use
Energy charge — The per-kWh rate for the electricity you consume
Fuel adjustment charge (FAC) — Passes through changes in fuel costs (coal, natural gas) and gets updated periodically
Infrastructure and grid modernization trackers — Recovery of approved capital investments between rate cases
Environmental compliance riders — Costs for pollution controls and coal ash remediation
DSM/energy efficiency rider — Funds your utility's efficiency programs

These riders and surcharges can add 20-30% on top of the base energy rate. The fuel adjustment charge alone can swing significantly from quarter to quarter as natural gas and coal prices fluctuate.

The Big Five: Comparing Indiana's Major Utilities

Five investor-owned utilities serve approximately 2.6 million customers across the state. Additionally, 72 municipally owned utilities and rural electric membership cooperatives (REMCs) serve smaller areas, but the Big Five dominate.

Here's how they compare based on the IURC's July 2025 Residential Bill Survey at 1,000 kWh of usage:

Utility	Monthly Bill (1,000 kWh)	Year-over-Year Change	Customers	Service Area
Duke Energy Indiana	~$156	+20% (+$26/mo)	~813,000	Central and southern IN (69 counties)
AES Indiana	~$158	+12% (+$17/mo)	~487,000	Greater Indianapolis
Indiana Michigan Power	~$167	+4% (+$6/mo)	~463,000	Northeastern and east-central IN
NIPSCO	Highest tier	+26.7% (+$50/mo)	~464,000	Northwestern IN
CenterPoint Energy	~$221	+25% (+$44/mo)	~148,000	Southwestern IN (Evansville)

The difference is stark. A CenterPoint customer in Evansville pays $65 more per month than a Duke Energy customer in Bloomington for the same 1,000 kWh. That's $780 per year just based on where you live.

Duke Energy Indiana — Largest and Currently Cheapest

Duke Energy serves roughly 813,000 customers across 69 of Indiana's 92 counties, making it the state's largest utility. Its approved rate case added about 11% in two steps — approximately 8% in February 2025 and 3% in early 2026 — translating to an extra $18.76 per month for the average residential customer.

Despite those increases, Duke currently has the lowest bills among the Big Five. The trade-off: Duke extended coal retirement at its Gibson Station plant to 2038, drawing an "F" rating from the Sierra Club for its slow transition away from fossil fuels.

AES Indiana — Indianapolis Metro

Formerly Indianapolis Power & Light, AES Indiana serves about 487,000 customers in the greater Indianapolis area. Bills currently run around $158 per month for 1,000 kWh after a 12% year-over-year increase.

AES is seeking another two-part increase totaling roughly 13.5% (about $21 per month) by 2027, on top of a 6% fuel increase already in the pipeline. On the positive side, AES has invested in smart grid technology, deploying FLISR (Fault Location Isolation and Service Restoration) systems that delivered nearly 30% fewer outages during the April 2025 storms.

NIPSCO — Hardest Hit Customers

NIPSCO serves about 464,000 customers in northwestern Indiana, including the Lake, Porter, LaPorte, and St. Joseph county areas. NIPSCO customers have been hit the hardest, with a 26.7% year-over-year increase and a cumulative bill increase of over 90% since 2016.

The utility's approved 16.75% base rate increase adds roughly $23 per month for an average customer using 672 kWh, phased through early 2026. NIPSCO is aggressively transitioning away from coal, planning to retire all coal capacity within about 10 years and replacing it with 2,600 MW of wind, solar, and battery storage.

Indiana Michigan Power — Steady but Rising

Indiana Michigan Power (I&M), an AEP subsidiary, serves approximately 463,000 customers in northeastern and east-central Indiana, including the Fort Wayne and Muncie areas. Rate increases have been more moderate — 3.9% in 2025, following 8.8% in 2024.

I&M is investing $550 million in grid resiliency, replacing over 2,800 poles, 240 miles of power lines, and upgrading 15 substations. The utility also intends to retire both units at its 2,600 MW Rockport coal plant by the end of 2028. In a notable move, I&M has said it will propose a base rate deduction for residential customers from revenue generated by data centers connecting to its territory.

CenterPoint Energy — Most Expensive in the State

CenterPoint, formerly Vectren, is the smallest of the Big Five with about 148,000 customers in the Evansville area of southwestern Indiana. It is also the most expensive by a significant margin, with monthly bills around $221 for 1,000 kWh — a 25% year-over-year jump.

CenterPoint's rate increase is being phased in over three steps through early 2026. The first step alone added $11.18 per month. If you're a CenterPoint customer, efficiency upgrades will have the biggest dollar-for-dollar impact of anyone in the state. One bright spot: CenterPoint offers a free Home Energy Assessment that includes on-the-spot upgrades like weatherstripping, aerators, pipe insulation, and a smart thermostat.

The Coal Transition: Why Rates Keep Climbing

Indiana's electricity story is fundamentally a coal story. As of 2024, the state's generation mix looks like this:

Source	Percentage
Coal	42.8%
Natural gas	40.5%
Wind	10.3%
Solar	3.3%
Other (hydroelectric, biomass, petroleum)	3.1%

Indiana is the fourth-highest producer of coal-fired electricity in the United States. Coal's share has dropped from nearly 70% in 2018 to about 43% in 2024, but the state still burns more coal for power than all but three others. Renewables generate about 15% of Indiana's electricity, with wind as the largest clean source at roughly 10%.

The Retirement Wave

The transition from coal is accelerating — and it's expensive. Between 2012 and 2024, Indiana retired 5.7 GW of coal capacity. Another 9+ GW is projected to retire or transition between 2025 and 2038.

The major moves include NIPSCO's plan to retire all coal within about 10 years, replacing it with 2,600 MW of wind, solar, and storage. Indiana Michigan Power intends to shut down its 2,600 MW Rockport plant by the end of 2028. Hoosier Energy already retired its 1,070 MW Merom coal plant in 2023.

Duke Energy Indiana is the outlier, having extended coal operations at Gibson Station through 2038.

The Political Tug-of-War

Coal's future in Indiana is politically contentious. Senate Bill 9, passed in 2023, requires utilities to give the IURC six months' notice before retiring any plant over 80 MW. The IURC can approve or deny closures. In October 2024, the Indiana Attorney General issued an opinion that the IURC has authority to block early coal retirements.

Governor Braun signed executive orders in April 2025 to preserve coal generation and develop new nuclear resources. In December 2025, the U.S. Department of Energy issued an emergency order forcing NIPSCO and CenterPoint to continue running three coal units totaling over 950 MW past their planned retirement dates. Environmental groups led by Earthjustice challenged that order in 2026 as illegal.

What This Means for Your Bill

Every dollar spent replacing coal plants, building gas plants, installing wind turbines and solar panels, upgrading transmission lines, and remediating coal ash gets recovered through your rates. Utilities securitize retired coal plant costs and pass them directly to ratepayers. Grid modernization needed for renewable integration adds another layer of expense.

This is the core tension: Indiana needs to transition away from aging, increasingly uneconomical coal plants, but the capital required to do so drives rate increases. The political efforts to slow or block retirements add their own costs — running old, inefficient coal plants is not cheap either, especially when they require environmental compliance upgrades.

Rate Structures: Flat Rates and Time-of-Use Options

Most Indiana utilities charge a flat volumetric rate — the same price per kWh regardless of when you use electricity or how much you consume. Your bill is straightforward: fixed customer charge plus energy charge times your usage, plus the various riders and surcharges.

Time-of-Use Rates

Time-of-use (TOU) pricing is available but entirely voluntary in Indiana. Duke Energy Indiana offers the most developed TOU program, restructured in 2025 with three pricing tiers:

On-peak — highest rate during periods of maximum grid demand
Off-peak — lower rate during moderate demand periods
Discount period — the lowest rate, during minimum demand hours

Duke's TOU program also gives off-peak rates on six holidays: New Year's Day, Memorial Day, July 4th, Labor Day, Thanksgiving, and Christmas.

If you can shift energy-intensive activities — running the dishwasher, doing laundry, charging an EV — to discount periods, TOU rates could save you money. Our guide on time-of-use electricity rates explains how to make the most of these programs.

For most Indiana households on a flat rate, the primary lever for lowering bills is reducing total consumption rather than shifting when you use electricity.

Solar in Indiana: Net Metering Is Gone

If you've been considering rooftop solar, here's the most important thing to know: Indiana ended favorable 1:1 retail rate net metering through SEA 309, signed in 2017. All five major utilities have since stopped accepting new net metering customers and moved to the Excess Distributed Generation (EDG) rate.

How EDG Works

Under the old net metering system, every kWh you sent back to the grid earned you a full retail credit — roughly 17 cents at today's rates. Under EDG, you earn the average wholesale electricity price for the prior year plus 25%.

The current EDG rate at AES Indiana, for example, is about 3.935 cents per kWh. That's approximately 77% less than the retail rate. Rates vary by utility and update annually based on wholesale market prices.

This dramatically changes the economics of residential solar. With net metering, a typical Indiana home solar system paid for itself in 8-10 years. With EDG rates, payback periods stretch significantly longer. It's no surprise that Indiana residential solar installations dropped 67% after net metering ended.

Grandfathering Rules

If you already have solar, or installed it before certain deadlines, you may be protected:

Systems installed before 2018: Full retail net metering guaranteed through July 1, 2047
Systems installed 2018 through end of net metering eligibility: Full net metering through July 1, 2032
After grandfathering expires, customers transition to the EDG rate

What Incentives Remain

Federal Investment Tax Credit (ITC): 30% of total system cost — still the biggest incentive
Property tax exemption: Solar systems are exempt from property tax assessment in Indiana
No state solar tax credit and no state rebate program
Sales tax: Solar equipment is NOT exempt from Indiana's 7% sales tax

Community Solar

Indiana does not currently have an operational community solar program. A bill introduced in January 2025 would require the IURC to establish community solar rules by July 2026. Meanwhile, Solar Opportunities Indiana has $117 million in federal grants to connect low-income communities to solar, and Indiana University's Environmental Resilience Institute is helping communities access $16 million in additional solar funding.

For those interested in electrifying their home more broadly, our whole-home electrification guide covers the full roadmap from heating to cooking to transportation.

How to Save: Rebates, Programs, and Efficiency Upgrades

You cannot switch electricity providers in Indiana, but you have more control over your bill than you might think. Between federal rebates, utility programs, and targeted home improvements, many Hoosier households can realistically cut their bills by 15-30%.

Indiana Energy Saver Program

This is the biggest savings opportunity available right now. Launched in May 2025, the Indiana Energy Saver Program distributes approximately $182 million in federal rebates funded by the Inflation Reduction Act. You can learn more at IndianaEnergySaver.com or email [email protected].

The program has two tracks:

Home Efficiency Rebate (HOMES): Available to single-family and multifamily residents. You'll need a minimum 20% predicted energy savings from a whole-home retrofit. Eligible upgrades include insulation, air sealing, ENERGY STAR HVAC systems, and water heaters.

Home Appliance Rebate (HEAR): Designed for low- and moderate-income households earning under 150% of the area median income. Covers first-time upgrades to heat pump water heaters, heat pump HVAC systems, and electrical panel upgrades.

If you're considering a heat pump, our guide to the best heat pumps for home covers what to look for and what to expect in terms of savings.

Utility-Specific Rebates and Programs

AES Indiana offers a $50 smart thermostat rebate and home improvement rebates for efficiency upgrades.

NIPSCO provides rebates on high-efficiency furnaces, air conditioners, and boilers, plus smart Wi-Fi thermostat rebates.

CenterPoint Energy stands out with a free Home Energy Assessment for all customers. A technician visits your home, installs weatherstripping, aerators, pipe insulation, and a smart thermostat on the spot, and gives you a personalized energy report with recommendations.

Duke Energy Indiana offers efficiency rebate programs and the time-of-use rate option for savings through load shifting.

High-Impact Efficiency Upgrades

For the biggest savings in Indiana's climate — cold winters and warm, humid summers — focus on these upgrades:

Weatherization — Insulation and air sealing deliver the highest return, especially in older Indiana homes. A DIY home energy audit can help you identify the worst leaks before spending money on contractors.
Smart thermostat — A quality smart thermostat can cut heating and cooling costs by 10-15% with minimal effort. Several Indiana utilities offer rebates that bring the effective cost under $100.
LED lighting — If you still have incandescent or CFL bulbs, switching to LEDs saves roughly $75-100 per year for a typical home.
ENERGY STAR appliances — When it's time to replace an aging furnace, air conditioner, water heater, or refrigerator, the efficiency gains on modern ENERGY STAR models are substantial.
Home energy monitor — A real-time energy monitor helps you see exactly where your electricity goes, so you can target the biggest waste first.
Budget billing — This does not save money, but it smooths out seasonal swings. Your utility averages your annual cost across 12 equal monthly payments, so you do not get hit with $200+ bills in summer and winter.

For a comprehensive approach, our guide on how to cut your electric bill in half lays out a complete savings strategy.

Help for Low-Income Hoosiers

If you're struggling to pay your electricity bill, several programs can help.

Energy Assistance Program (EAP / LIHEAP)

The federally funded Energy Assistance Program provides one-time annual payments sent directly to your utility. The application period for the current year runs from October 1, 2025 through April 20, 2026 at 5:00 PM ET.

Eligibility: Households at or below 60% of state median income.

Benefit amounts (FY 2025):

Heating assistance: $100 minimum to $675 maximum
Winter crisis assistance: up to $800 maximum
Cooling assistance: available if funds remain after heating season

Apply online, by mail, or in person at local service providers. Call 2-1-1 for referrals to the nearest provider.

Winter Disconnection Moratorium

From December 1 through March 15, Indiana utilities cannot disconnect electricity or gas service for EAP-eligible households. To qualify, you must be receiving EAP benefits or have applied and provided written proof to your utility.

Important caveats: the moratorium does not waive your obligation to pay — you still owe for the electricity you use. Utilities can still disconnect for emergency situations, fraud, or meter tampering. Additionally, a doctor's statement can get you a 10-day postponement of disconnection for medical hardship at any time of year.

Weatherization Assistance Program (WAP)

This program provides free weatherization services — insulation, air sealing, furnace repair or replacement — for income-eligible Hoosiers. Unlike bill assistance, which is a one-time payment, weatherization permanently reduces your energy costs. It's administered through the Indiana Housing and Community Development Authority (IHCDA), with income eligibility similar to EAP.

Utility Hardship Programs

Each major utility maintains its own assistance programs. Duke Energy's Share the Light Fund, AES Indiana's payment assistance programs, and NIPSCO's energy assistance referrals can all provide additional help. Contact your utility directly or call the OUCC for details.

Grid Reliability and Modernization

Indiana faces real grid reliability challenges. Severe weather — tornadoes, ice storms, and intense thunderstorms — regularly tests the infrastructure. Aging equipment in rural areas, coal plant retirements requiring transmission upgrades, and growing data center demand all strain the system.

Smart Grid Investments

Indiana utilities are investing heavily in grid modernization:

AES Indiana deployed smart meters and FLISR technology across its Indianapolis territory. During the April 2025 storms, the FLISR system automatically rerouted power around damaged sections, resulting in 30% fewer outages. Without the technology, an estimated 40,000 additional customers would have lost power. AES restored all 87,000 affected customers within 72 hours.

Indiana Michigan Power is investing $550 million in grid resiliency: replacing over 2,800 poles and 240 miles of power lines, upgrading 15 substations, and installing self-healing grid technology that can detect and isolate faults automatically.

Duke Energy Indiana filed a statewide plan for grid automation, smart meters, and distribution infrastructure improvements.

Federal Funding

Indiana is estimated to receive approximately $23 million over five years through the Grid Resilience Grant Program, funded by the Infrastructure Investment and Jobs Act. The Indiana Office of Energy Development is distributing grants to communities for grid infrastructure improvements focused on withstanding and recovering from extreme weather events.

Data Centers and Grid Load

A growing concern is the impact of data centers on Indiana's grid. Large data center operations require enormous amounts of electricity and can strain grid capacity if not planned carefully. Governor Braun has taken a clear position: data centers must "bring their own power" to avoid burdening residential ratepayers. Indiana Michigan Power has gone a step further, announcing it will propose a base rate deduction for residential customers from data center revenue — aiming to make these large customers a benefit to homeowners rather than a burden.

Frequently Asked Questions

Can I choose my electricity provider in Indiana?

No. Indiana is a fully regulated market. Each utility has an exclusive service territory, and residential customers cannot switch providers. The IURC regulates rates to protect consumers. Your utility is determined entirely by where you live.

Why did my Indiana electricity bill spike so much?

Indiana saw a 17.5% average statewide bill increase in the 12 months ending July 2025 — the largest jump in 20 years. The primary drivers are coal plant retirements, replacement generation construction (natural gas, wind, solar), grid modernization, environmental compliance costs, and fuel price fluctuations. Governor Braun has made affordability a top priority and the IURC is formally investigating.

Which Indiana utility has the cheapest rates?

As of July 2025, Duke Energy Indiana had the lowest residential bills among the Big Five at approximately $156 per month for 1,000 kWh. CenterPoint Energy had the highest at about $221 per month. That's a $65 per month difference — or $780 per year — for the same amount of electricity.

Does Indiana have net metering for solar panels?

Indiana ended 1:1 retail rate net metering. New solar installations now receive the Excess Distributed Generation (EDG) rate, which is roughly 4 cents per kWh — about 77% less than the retail rate. Systems installed before 2018 are grandfathered at full retail rates through July 1, 2047. Systems installed from 2018 through the end of net metering eligibility keep full retail rates through July 1, 2032.

What help is available if I cannot afford my electricity bill?

Apply for the Energy Assistance Program (EAP/LIHEAP) by calling 2-1-1 for referrals. Benefits range from $100 to $675 for heating assistance, with up to $800 for winter crisis situations. The application period runs October through April. The winter disconnection moratorium from December 1 through March 15 prevents shutoffs for EAP-eligible households. The Weatherization Assistance Program also provides free home efficiency improvements.

Are there rebates available for energy-efficient upgrades?

Yes. The Indiana Energy Saver Program, launched in May 2025, distributes approximately $182 million in federal rebates for home efficiency upgrades including insulation, air sealing, HVAC systems, heat pumps, and water heaters. Individual utilities also offer smart thermostat rebates, equipment rebates, and free home energy assessments (CenterPoint). Visit IndianaEnergySaver.com for details.

What is Indiana's electricity generation mix?

As of 2024: approximately 43% coal, 41% natural gas, 10% wind, 3% solar, and 3% other sources. Coal has dropped from nearly 70% in 2018 but Indiana remains the fourth-largest coal power state in the U.S. Renewables generate about 15% of the state's electricity, with wind as the dominant clean source.

Will data centers raise my electricity rates?

Governor Braun's policy requires data centers to bring their own power generation capacity rather than drawing from existing grid resources meant for residential customers. Indiana Michigan Power has announced it will propose a base rate deduction for residential customers from data center revenue. The stated goal is for data center growth to benefit ratepayers rather than burden them, though the long-term impact will depend on how effectively these policies are enforced.

Your Indiana Electricity Action Plan

Here's a concrete plan to start lowering your electricity costs this month.

This week — understand your baseline:

Pull out your last 12 months of electricity bills. Note your average monthly kWh usage and average monthly cost.
Identify which utility serves your home and check the rate comparison table above to see where you stand relative to other Indiana customers.
Check every line item on your most recent bill. If anything looks unfamiliar, call your utility or refer to our guide on reading your electric bill.

This month — capture the easy wins: 4. If your utility offers a smart thermostat rebate, buy one and install it. A smart thermostat is the single highest-impact, lowest-effort upgrade for most Indiana homes. 5. If you're a CenterPoint customer, schedule the free Home Energy Assessment immediately. It includes free on-the-spot upgrades. 6. Switch any remaining incandescent bulbs to LEDs. 7. Sign up for budget billing if seasonal bill swings are causing financial stress.

This quarter — pursue the bigger savings: 8. Visit IndianaEnergySaver.com and check your eligibility for federal rebates on insulation, air sealing, HVAC upgrades, or heat pump installations. 9. Walk through a DIY home energy audit to find where your home is losing the most energy. 10. If your utility offers time-of-use rates (Duke Energy Indiana), evaluate whether shifting usage to off-peak hours could save you money. 11. If you qualify for EAP/LIHEAP, apply before the April 20 deadline.

Ongoing — stay informed: 12. Watch for your utility's next rate case filing. The IURC's formal investigation into rising rates (launched March 2026) may produce new consumer protections. 13. Follow the OUCC and Citizens Action Coalition for updates on pending rate cases and opportunities to submit public comments. 14. If you're considering solar, run the numbers carefully with EDG rates — the economics work best for homes with high daytime usage that can self-consume most of their generation rather than exporting to the grid.

Indiana's electricity market does not give you the power to switch providers, but it does give you the power to cut waste, capture rebates, and make your home more efficient. With $182 million in federal rebates on the table, utility-specific programs available, and political pressure mounting on utilities to justify every rate increase, there has never been a better time for Hoosier households to take control of their energy costs.