Indiana House Bill 1002: Electric Utility Affordability Law

Indiana’s House Bill 1002, the electric utility affordability law signed by Governor Mike Braun on February 26, 2026, changes how the state’s five major investor-owned electric utilities set rates and adds new protections for residential customers, including levelized monthly billing, a ban on shutoffs during extreme heat, and a required low-income assistance program funded by each utility.¹ Enacted as Public Law 36, it phases in through 2029.

The law is a response to sharp rate increases. Indiana electricity rates rose more than 17% in 2025, adding roughly $28 a month to the average household bill, and the state’s national affordability ranking had fallen from fourth-lowest in 2004 to 28th by 2023.²

Levelized Billing on Your Monthly Statement

Levelized billing spreads a household’s annual electricity cost across roughly equal monthly payments, smoothing out the summer and winter spikes that come with heavy air conditioning or heating use. Electricity suppliers under the Indiana Utility Regulatory Commission’s jurisdiction had to make these plans available by April 1, 2026.³

Enrollment works two ways. Any residential customer can request a levelized plan. Beginning with the first billing cycle after June 30, 2026, suppliers must also automatically enroll households that have applied for the state’s home energy assistance program and don’t already have a levelized plan.³ Customers who are auto-enrolled can opt out without penalty.⁴

Because a levelized amount is an estimate, the utility periodically reconciles it against actual usage. Under the law, that reconciliation can happen no more than twice a year, timed to typical seasonal usage patterns.⁵ After July 1, 2026, utilities cannot market these plans as “budget billing” unless the plan carries additional relief features.⁴

Summer Shutoff Protection During Extreme Heat

Indiana already prohibited winter disconnections for qualifying low-income customers between December 1 and March 15, but summer heat had no equivalent protection. HB 1002 fills that gap. When the National Weather Service forecasts a heat index of 95 degrees Fahrenheit or higher within 48 hours, eligible residential customers cannot be disconnected.⁶

The trigger is temperature-based rather than a fixed calendar window, so protection turns on and off with the forecast. Every electric and gas utility in the state must post information about both the winter and summer disconnection rules, along with contact details for the state heating assistance program, on its website by June 1, 2026.⁴

Utility-Funded Low-Income Assistance

Each affected electricity supplier must fund a low-income customer assistance program at a minimum of 0.2% of the revenue it earns from residential customers in its jurisdiction, plus any third-party contributions. That’s a change from the old model, which drew assistance funding from ratepayer money recovered under IURC-approved energy efficiency programs.⁵

How Rates Will Now Be Set

The biggest structural change is the shift from traditional rate cases to three-year Multi-Year Rate Plans, or MYRPs, governed by a new Performance-Based Regulation framework at Indiana Code 8-1-46. Under this system, the IURC evaluates each utility on affordability, reliability, and resilience, and can impose penalties when standards aren’t met. Rate cases can occur only every three years.¹

Investor-owned utilities transition to MYRPs on a staggered schedule. The previous 300-day interim rate authority is abolished for any utility that files an MYRP, and existing references in Indiana law to “base rate cases” or “general rate cases” now mean the first year of a utility’s MYRP.⁴ The Office of Utility Consumer Counselor, Indiana’s ratepayer advocate, can ask regulators to adjust a utility’s rates and performance mechanisms during the plan period.⁵

Utilities have to report on how it’s working. Quarterly reports to the OUCC begin with the third quarter of 2026, and the first is due October 30, 2026. They cover customer counts, enrollment in levelized billing, account delinquencies, and disconnections.¹ Annual affordability and service-restoration reports from utilities start March 1, 2027, and the IURC itself begins annual reporting on MYRPs and performance metrics in 2029.⁴

Which Utilities Are Covered

The core of the law applies to electricity suppliers under IURC jurisdiction, which in practice means Indiana’s five major investor-owned utilities: AES Indiana, CenterPoint Energy Indiana, Duke Energy Indiana, Indiana Michigan Power, and NIPSCO.¹ If your electricity comes from one of them, the full package of protections applies.

Municipally owned utilities are explicitly exempt from every provision of the law.³ Rural electric cooperatives sit in between. Co-ops are exempt from the multi-year rate plan requirements, the mandatory levelized billing rules, and the low-income program funding mandate. They are still subject to the summer disconnection moratorium during extreme heat, must post the state heating assistance information on their websites by June 1, 2026, and must offer delinquent residential customers reasonable payment arrangements.⁷

Key Dates to Watch

February 27, 2026: The MYRP and performance-based regulation framework takes effect.
April 1, 2026: Levelized billing plans must be available, with penalty-free opt-outs for low-income customers.
May 1, 2026: IURC must amend its electric utility rules to conform with the new disconnection moratoria.
June 1, 2026: All electric and gas utilities must post website notices on winter and summer disconnection protections and home energy assistance contacts.
July 1, 2026: Mandatory levelized billing takes effect for eligible accounts; quarterly residential reporting begins.
October 30, 2026: First quarterly report due to the OUCC.
January 1, 2027: IURC must amend interruption-of-service rules to align with the MYRP statutes.
March 1, 2027: First annual customer affordability and service restoration reports due from utilities.
2029: IURC begins annual reporting on MYRPs, performance metrics, and the impact of performance incentive mechanisms on customer rates.

These dates come from the law’s implementing schedule.⁴

A Parallel IURC Affordability Inquiry

The day before Governor Braun signed HB 1002, the IURC opened its own investigative inquiry into the affordability practices of all five investor-owned utilities, scheduled for March 24, 2026, at the PNC Center in Indianapolis. The inquiry was designed to examine the cost of reliability and the drivers of customer expenses.⁸

A separate IURC investigation into NIPSCO, Cause No. 46329, was already underway over billing discrepancies tied to its advanced metering rollout. A “not-insignificant number” of natural gas meters were found to have incorrect drive-rate configurations, producing inaccurate bills; NIPSCO issued credits but had not proactively notified affected customers.⁹ Following HB 1002’s passage, Indiana Michigan Power announced it would file to reduce its base rates, and CenterPoint Energy publicly committed to holding rates stable for two years.⁸

1
Indianapolis Star. Gov. Braun Signs Utility Bill Change Pay Electric Bill
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Indianapolis Star. Electricity Bills Indiana Energy Costs Rising
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Indiana General Assembly. House Bill 1002
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Taft Law. HEA 1002 Deadlines
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Indiana Capital Chronicle. Affordable Electricity Bill Moves to House Floor After Spate of Edits
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WFYI. HB1002 Electric Utilities New Law Will Change Your Bill
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Indiana Electric Cooperatives. One Voice Strong Connections Meaningful Outcomes From Legislative Session
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Indiana Capital Chronicle. Indiana Utility Regulators Call in Big Five Energy Providers for Affordability Investigation
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Indiana Utility Regulatory Commission. Cause No. 46329 Order