Advocates brief Indianapolis committee on state energy bills and a new 1% data-center electricity tax

Delaney Barraquan, government affairs director at Indiana Conservation Voters, and the executive director of Citizens Action Coalition told the Indianapolis Environment & Sustainability Committee that the recent General Assembly session produced several measures with direct impacts on utility customers and local planning. They highlighted House Bill 1002'an energy-affordability package with summer shutoff protections and a requirement that utilities offer low-income programs'and described how data-center language was moved into other bills.

Barraquan said HB 1002 includes summer protections for households on LIHEAP and a shift in rate-setting: "You cannot be disconnected during that time," and utilities will move toward three-year multi-year rate plans with performance incentives intended to balance affordability and resiliency. The presenters said that change replaces the prior annual, cost-plus approach with a multi-year structure that may take time for utilities and regulators to implement.

The executive director of Citizens Action Coalition described how data-center provisions landed in House Enrolled Act 1210 and related measures. "What ultimately passed was in House Enrolled Act 1210," the speaker said, describing a requirement that a data center after 07/01/2026 "would be required on a quarterly basis to pay effectively a 1% tax but only on the electricity that they use, to the county treasurer in that county." The presenters said earlier versions considered broader taxes on equipment and required bill submission to county treasurers for audit; the provision that survived applies only to electricity consumption.

They also noted a separate directive in another enrolled act calling for study and reporting on tax incentives for large projects: staff described House Enrolled Act 1406 as directing the Indiana Finance Authority (IFA) and Indiana Economic Development Corporation (IEDC) to analyze tax incentives for data centers and similar projects and to report back to the General Assembly by 2026-11-05.

Councilors asked for specificity about how much data centers contribute to rising bills. Committee member Mike Dilk said he had seen conflicting reports and asked for an estimated percentage. The Citizens Action Coalition speaker replied that they could not provide a single statewide percentage but cited examples where large data centers drove transmission and interconnection upgrades whose costs were passed to customers, and said regional transmission organizations have identified transmission-cost growth tied to large facilities.

Residents who came specifically about data centers urged more urgency and local oversight. Ashley Hooley of Decatur Township said she and neighbors are concerned about how hyperscale facilities are classified and the potential local electricity impacts, and asked the MDC not to approve an upcoming Decatur case without more diligence. Chair John Barth replied that zoning starts with the Metropolitan Development Commission and that the council's involvement depends on whether the district councilor "calls down" the case; he said the city is working on zoning definitions and expects any major changes to proceed through the MDC and, if necessary, the full council.

The presenters also raised regulatory concerns about proposed utility ownership changes. Citizens Action Coalition warned that a private-equity acquisition of a utility could shift incentives: "You're talking about a private equity firm whose primary responsibility is to deliver... earnings and profits to their investors," the speaker said, and noted that Indiana law currently does not give the Indiana Utility Regulatory Commission the explicit authority to approve or reject some utility acquisitions.

What happens next: the tax provision in HEA 1210 takes effect for new data centers after 07/01/2026; the IFA/IEDC study required by HEA 1406 is due to the General Assembly by 2026-11-05; local zoning decisions for the Decatur case proceed through the MDC and may be called down by the district councilor for full council review.