Lindsay Trameri spent a good chunk of Thanksgiving weekend hauling fiberglass insulation pads into the attic of her small home in Irvington. After a couple of trips to Menards and some tight squeezes through a small hole in the ceiling, she had finished laying down half of the insulation in fewer than five hours.
The home improvement project was one of many Trameri, a project manager for Indianapolis’s Office of Sustainability, has tackled in recent months to reduce her energy use. Installing pads along the attic floor, she hoped, would trap heat in the home and reduce strain on her furnace. She also sealed doors, weatherized windows and hung transparent thermal curtains throughout her house.
Trameri watches her budget closely. Each month she goes through her electric bills line by line, trying to make sense of why they keep climbing and finding additional ways to cut costs.
“The insulation piece was always somewhere on the to-do list, but it did become more of a priority this year,” Trameri said. “Energy bills went up.”
Across the state and nation, consumers are facing soaring electricity rates. In Indiana, some consumer advocates are calling it an “affordability crisis.” On average, electricity rates statewide jumped more than 17% this year, which translates into an average extra $28 a month for the same usage, according to a report released this year by the Citizens Action Coalition, an Indiana-based utility watchdog group.
But the rates have not risen overnight. Both consumer advocates and energy industry officials cite multiple factors that have contributed to hefty utility bills over the years. These include inflation, investments for infrastructure projects and the state’s history of “utility-friendly legislation” that passes costs onto consumers.
Potential solutions, however, remain elusive. Gov. Mike Braun campaigned on energy affordability prior to taking office, and state lawmakers are putting forward plans to address affordability. But few concrete steps have been taken to address the crisis and many Hoosiers still experience anxiety before they open their monthly electric bills.
Indiana used to have some of the cheapest energy nationwide. In 2004, it ranked fourth lowest in a state-by-state comparison of average electricity bills.
Although Indiana dropped to 28th in 2023, according to the Indiana Utility Regulatory Commission’s 2024 annual report, Hoosiers still see lower rates than some of their neighbors. In 2023 and 2024, Indiana residential customers paid about 15 cents per kilowatt-hour in Indiana, while Illinois and Ohio residents paid closer to 16 cents, according to data from the U.S. Energy Information Adminstration.
A history of ‘utility-friendly legislation’
Hoosiers’ current rates trace back to legislation introduced more than a decade ago that favors the industry’s bottom line rather than consumers’ wallets, said Kerwin Olson, CAC executive director.
“They are investor-owned utilities whose primary job is their fiduciary responsibility to their shareholders,” he said. “They like to opine that they’re a public utility, and they serve the community, but decisions are made with an eye towards Wall Street, not an eye towards Main Street.”
Legislation passed in 2011 allowed energy companies to charge customers for costs associated with federally mandated compliance projects; this meant if a coal plant needed to update its smokestacks to comply with emissions requirements, a utility could pass that cost on to ratepayers. Olson calls systems like this that allow utility companies to recoup costs and bypass the formal and lengthy rate increase process trackers.
Two years later the Indiana General Assembly created a tracker that allowed utilities to charge customers for the cost of improving transmission, distribution and storage systems.
“Those trackers have shifted significant amounts of cost to ratepayers,” Olson said.
The 2013 legislation allowed the Indiana Economic Development Corporation, a public-private entity, to streamline rate increases if a utility project was labeled as “targeted economic development.” Originally, the idea was to help extend natural gas pipelines to underserved and rural communities. But the electric utilities also fell under the legislation’s umbrella and have taken “significant advantage” of it over the past five years, Olson said.
Lindsay Trameri shows a winterized window Thursday, Dec. 4, 2025, inside her Indianapolis area home. Aside from putting film on widows, Trameri and her partner added attic insulation to reduce energy usage fees.
Inflation and infrastructure cause higher bills
More recent changes have helped drive up electricity costs, particularly the cost of grid infrastructure and overall inflation, according to the EIA.
The pipes, wires and lines that ensure access to electricity 24/7, 365 days a year are old, expensive to maintain, and in “desperate need of modernization,” said Danielle McGrath, president of the Indiana Energy Association, a group representing Indiana’s investor-owned electric utilities.
In Indiana, utilities are investing heavily into transmission and distribution systems and by using trackers, they can recover these investments from ratepayers. Utilities like AES Indiana or Duke Energy Indiana can present seven-year grid modernization plans to the state body that regulates utility rates and ask for approval to raise electricity rates to cover the investment.
Such investments are necessary, McGrath said.
“When you stay on top of maintenance, the value is that [the grid is] going to operate more reliably than what it otherwise would,” she added. “If you defer that maintenance and you keep costs artificially low, eventually it’s going to catch up to you.”
And then there’s inflation. Average retail electricity prices, which include residential, commercial and industrial customers, jumped 23% from 2019 to 2024 nationwide, tracking inflation. An analysis by the Lawrence Berkeley National Laboratory, a federally funded research center, found that after adjusting for inflation, average prices have actually dipped, including in Indiana.
How electricity is generated can also play a role in rate increases. Coal plants become pricier to maintain as they age and regulations to mitigate their adverse effects on human health and the environment can be pricey. And natural gas, the fossil fuel methane, is prone to price fluctuations.
These rising rates can force Hoosiers like Emerson Harper to carve up the household budget and fiddle with the thermostat. Harper lives with his husband in a 792-square-foot home in Lawrence.
An AES Indiana customer, Harper said his monthly electricity bills induce anxiety come warm weather.
“I get stressed every year about how much it is going to cost to cool the house,” Harper said. “What’s a reasonable temperature to turn the house down to? If it’s above 70, I can’t sleep at night. But it’s really expensive if you want to keep your house below 70 in July and August. So it’s really just a balancing act for us.”
In July 2023, Harper paid $111.29 for 1,017 kwh, about 10.9 cents per kilowatt-hour, a standard billing unit for electricity. Two years later the July bill came in at $177.18. His usage had increased to 1,265.18 kwh and the base electricity rate had shot up to about 14 cents for each kilowatt-hour. The 3.1 cent jump added almost $40 to Harper’s pre-tax electric bill last August.
Harper, who makes less than $25 an hour at his Indiana University Indianapolis job, said this sort of increase isn’t “chump change” to him.
As Harper and his husband mull starting a family and moving to a bigger place, they’re factoring the rising cost of electricity into their home search and thinking twice about any house with an electric furnace.
“We’re looking at mortgage costs, but then also how much are we going to realistically need to budget per month for utilities?” Harper asked. “How is that going to change what we can afford?”
Solar struggles mean more barriers
Solar energy used to offer Hoosiers a way to trim their utility costs but those days appear to be over.
A state net metering program that was discontinued in 2022 allowed homeowners with solar panels to send their excess energy back to the grid and receive credit on their electricity bills.
Alex Decker and his wife Jordan moved to a newly renovated home in Indy’s Herron Morton neighborhood about four and a half years ago. They quickly installed a 26-panel solar array and a geothermal heating and cooling system.
“I talked Jordan into it and they’re definitely my passion projects,” Alex said. “When we closed on our home in August 2021, we had 10 months to get net metering, so we hurried and did that and still had federal credits. That was hugely beneficial at that time.”
The Deckers originally thought it would take about nine years to recoup their initial investment, but as electricity rates have increased, they now expect to break even in six and a half years for the solar panels and a little more for the geothermal installation. The solar panels, Alex estimated, offset about 40% of their total household usage and the heat pump system offsets cooling costs by about 75%.
“It’s also extremely comfortable,” Alex said of the heating and cooling system. “I don’t feel bad about keeping it a little cooler in the summer. It’s been awesome.”
The Deckers spent about $90,000 on their solar installation. Today that would be even costlier as solar became more expensive in 2025 after the Trump administration moved to cancel residential tax credits for solar installation.
The end of net monitoring and the tax credit have combined to put solar energy out of the reach of many Indiana families, said Zach Schalk, Indiana program director at Solar United Neighbors.
“Combined with the end of the federal tax credit, we’re making it much harder for ordinary families around the state to be able to afford solar and to control their rising electric costs,” Schalk said.
The data center effect
While costs are high now, ratepayers are worried they could rise even more if large load users like data centers exert pressure on the electric grid.
State legislators, however, say they’re hoping to ease the financial burden for Hoosiers.
In a December 2025 hearing, lawmakers teased a policy shift toward “performance-based ratemaking” or PBR, a policy framework that could give Indiana more tools to hold utilities accountable for delivering cheap and reliable power. In the long term, this could help mitigate the rising cost of electricity for Hoosiers, according to lawmakers.
“But families need support now,” Rep. Alaina Shonkwiler, R-Noblesville, said in the hearing.
Shonkwiler said she supported potential legislation that would immediately address affordability by mitigating seasonal bill shocks, preventing disconnections in the summer and creating a system for predictable monthly payments beyond what exists now.
Several other bills have been introduced to address affordability. One bill introduced this session would allow the easy-use of cost-saving plug in solar systems, giving customers some freedom from utility regulations. Another would prohibit utilities from disconnecting residential gas or electricity during the summer months in homes with residents over the age of 65 or younger than 16.
Meanwhile, the Indianapolis Office of Sustainability, where Trameri works, offers Indianapolis residents help with auditing their energy use, finding utility bill relief and weatherizing their homes.
In Trameri’s own home, the newly installed insulation has already made it feel cozier, she said. And in a world where state regulators have much of the final say, the project gave Trameri some control over her energy bill.
“You don’t have to get a permit. You don’t have to get on some contractor’s schedule. You can just get it done and then see the benefits,” she said. “As the prices of almost everything in our lives are going up, we want to make changes where we can, where we have some control.”
IndyStar’s environmental reporting is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.
Sophie Hartley is an IndyStar environment reporter. You can reach her at sophie.hartley@indystar.com or on X at @sophienhartley.
Karl Schneider is an IndyStar environment reporter. You can reach him at karl.schneider@indystar.com. Follow him on BlueSky @karlstartswithk.bsky.social or X @karlstartswithk.
This article originally appeared on Indianapolis Star: Electricity bills are skyrocketing in Indiana. This is how we got here
