Governor Mike Braun signed a sweeping energy bill HB1002 into law on Feb. 26, 2026 – a measure backed by bipartisan support that seeks to tackle Indiana’s energy’s runaway price increases.
Lawmakers, lobbyists and consumer advocates across the state are hoping that this legislation will provide relief to Hoosiers, offering both immediate solutions and a long-term plan to overhaul how electric utilities are regulated. Experts point to inflation, new infrastructure and a history of utility-friendly legislation as the reason for these runaway price increases.
Flatter Bills For Some
Come summer, some Hoosiers will see the same charge, month after month, on their electric bills.
HB 1002 mandates electricity suppliers in Indiana — except for municipally owned utilities — to apply “levelized billing plans” to households who are eligible and have applied for state home energy assistance programs, like EAP. This will largely impact low-income customers of one of the investor-owned utilities — NIPSCO Utilities in Northern Indiana.
Budget billing programs already operate in various forms. Under these plans, utilities review several months of a customer’s past bills to calculate an average monthly charge. The goal is to create a steady payment amount that makes household budgeting easier and cushions the impact of high-usage periods, such as July and August.
However, the approach can also result in “reconciliation” surprises. Because customers ultimately pay for the electricity they actually use, utilities periodically — typically twice a year — compare the estimated payments to real consumption. If there’s a gap, the customer is either billed for the difference or, in some cases, receives a credit to settle the account.
Under HB 1002, households may choose to opt out of budget billing. However, eligible customers who take no action will automatically be enrolled, with the change appearing on their first monthly bill issued after June 30.
Protections During Extreme Heat
At present, electricity providers in Indiana are prohibited from disconnecting electric or gas service to certain residential customers who qualify for state energy assistance programs between December and mid-March.
Under the new change, that seasonal shutoff ban will also apply during periods of extreme heat. When the National Weather Service issues a heat index of 95 degrees Fahrenheit or higher, qualifying households will be protected from disconnection, ensuring they can continue using fans or air conditioning.
Strengthening utility oversight
The legislation establishes a more structured flow of information between the state and electric utilities. Beginning this year, utilities must submit quarterly customer reports to the Indiana Office of the Utility Consumer Counselor, the agency that represents ratepayers and focuses on affordability.
These reports are required to include key data points, such as total customer counts, participation in levelized billing plans, delinquent accounts and service disconnections.
Switch to Performance Base Rates
Perhaps the most understated—but potentially most impactful—aspect of HB 1002 is that it ushers Indiana into a new era of utility regulation.
Traditionally, utilities in Indiana must obtain approval from the Indiana Utility Regulatory Commission to set customer rates and determine company revenue. However, they have historically had considerable flexibility in how frequently they can request rate increases. Critics argue this has allowed investor-owned utilities to pass on too many costs to ratepayers too often.
To address this, HB 1002 introduces a system called performance-based ratemaking. Under the new framework, utilities can only file rate cases every three years and will be evaluated on metrics such as affordability, reliability, and resilience—essentially a formal “performance review,” as state Rep. Alaina Shonkwiler explained during her January presentation to the House Committee on Utilities, Energy and Telecommunications. Utilities that fail to meet the state’s standards may face penalties, giving regulators a stronger tool to control electricity costs.
Room for Improvement
Much of the ongoing frustration with HB 1002 stems from the belief that “it doesn’t go far enough to ease the burden on Hoosier ratepayers,” said Kerwin Olson, executive director of the consumer advocacy group Citizens Action Coalition.
Some Indiana lawmakers attempted to broaden the bill’s impact, but more than a dozen proposed amendments were rejected over the past two months. Among the failed measures were efforts to eliminate sales tax, reconnection fees, and deposits, as well as proposals to prevent service disconnections for customers with medically necessary electricity needs.