Consumer advocates warn that BlackRock’s potential purchase of AES could send utility rates even higher

INDIANAPOLIS — At a time when AES Indiana is already asking state regulators to approve a rate hike that would increase Hoosiers’ electric bills by an average of $21 a month, some consumer advocates believe it may not stop there.

“BlackRock is looking to make as much money as possible off of our backs by taking that money out of our wallets through the various ways that they can leverage that power,” Ben Inskeep with the Citizens Action Coalition said.

BlackRock is the world’s largest asset manager, and according to a report in The Financial Times, is close to purchasing AES. The utility provider supplies power to Indianapolis and some surrounding areas.

The private equity firm has been buying up utility companies recently. Regulators in Minnesota recently approved BlackRock’s purchase of Minnesota Power.

Inskeep said BlackRock’s actions should worry consumers.

“Our main concern is that this type of acquisition can lead to one entity … owning more and more infrastructure and getting more and more market share and market power,” Inskeep said. “The more one company resembles a monopoly, the worse the outcomes are for consumers in terms of prices.”

A widely held belief is that BlackRock and other private equity firms are interested in power companies due to the rapid expansion of artificial intelligence. Data centers are being built all over the United States, and they require massive amounts of electricity.

“When there is so much aggregated capital and power that’s being harnessed around these sort of new technology developments, the consumers are the last voice that gets heard,” Indiana University Finance Lecturer Gerry Hays said in an interview with FOX59/CBS4. “There could be fallout with consumers, and it could hit them in the pocketbook.”

Hays said the goal of BlackRock is to make money, and the company will do that however they can.

The Indiana Utility Regulatory Commission (IURC) has to approve any rate hikes by utility companies, and Hays said a private equity firm would almost certainly request a rate hike. If the commission doesn’t give them the stamp of approval, he said they’ll find other ways to increase profits.

“If they don’t get their cost increases to their satisfaction, they may cut jobs,” Hays said. “They may cut and pull back on services. They’re going to find ways to pay for their acquisitions and to keep their profit margins.”

Hays believes the ultimate goal for BlackRock would be to supply power to data centers whether they’re here in Indiana or elsewhere. He believes a massive corporation owning such a large utility could come with consequences for consumers.

“It’s a little bit scary, honestly, for one company to have that much control over so much of the sort of consumer population with respect to costs that are real and really impact families and their ability to put food on the table,” Hays said.

While the IURC has control over rates, the Indiana legislature did not give it the power to approve or deny mergers or acquisitions. The Citizens Action Coalition would like to see state lawmakers give them that authority.

Neither BlackRock, nor AES has commented on the potential transaction.