Bill will protect ratepayers from new generation costs by decreasing energy demand pressure on Indiana utility companies
INDIANAPOLIS, IN (Jan. 14, 2026) – New legislation was introduced today to strengthen Indiana’s energy market by giving major employers new options to manage electricity costs — while protecting residential and small business ratepayers from growing energy demands. The bill, Senate Bill 272 introduced by Sen. Stacey Donato, allows commercial and industrial companies to purchase electricity supply from an energy market rather than being limited to a single utility option, helping employers better navigate rising and volatile energy costs.
“Indiana’s economic future depends on having reliable, affordable electricity,” said the bill’s sponsor, Sen. Stacey Donato. “This legislation gives our largest employers the flexibility to procure their own electricity and manage those costs. This is a balanced approach that protects consumers, attracts privately funded power generation, and helps ensure our state has the power it needs for the future.”
The Retail Energy Advancement League (REAL), a national organization advocating for energy market expansion and consumer choices, applauds Sen. Donato for championing legislation that will provide commercial and industrial businesses with a choice in their power supply.
“The concept is simple: allow large energy users to have direct access to an energy marketplace to meet their electricity needs the same way utility companies do,” said Chris Ercoli, president and CEO of the Retail Energy Advancement League. “Allowing large energy users to access competitive electricity supply is a practical solution that can reduce their cost pressures, encourage new power generation from independent power producers, and ease the strain on utility systems — benefiting all ratepayers in the long run. We applaud Sen. Donato for her comprehensive approach to help support Indiana’s energy needs.”
Electricity remains one of the top operating expenses for many manufacturers and industrial employers. When those costs rise unpredictably, it threatens jobs, wages, and future investment in Indiana communities.
Energy-intensive businesses are particularly sensitive to electricity prices. States such as Michigan and Kentucky already allow large energy users to purchase electricity supply from an energy market — providing significant cost savings and giving those states a competitive edge in attracting and retaining major employers.
In Michigan, 10 percent of a utility’s customer load is permitted to procure their own electricity. That cap has been fully subscribed since 2008, with more than 5,000 commercial and industrial customers served by a third party supplier. As of 2023, there’s an additional 5,000 customers in the queue waiting to participate in the program. This program has reduced the amount of power generation the utility needed to build and maintain by 2,798 MW –– the equivalent of four natural gas plants that could have cost all ratepayers $3.2 billion for the utilities to build.
In 2023, the commercial customers that purchased from a competitive supplier saved more than $150 million compared to the utility’s commercial rate in Michigan, according to data from the U.S. Energy Information Administration.
Under current Indiana policy, most customers receive electricity supply exclusively from their designated utility, concentrating growing demand on utilities and driving costly new generation investments that are ultimately passed on to ratepayers –– customers.
Senate Bill 272 allows large energy users — including manufacturers, steel producers, and technology companies — to purchase electricity supply directly from a competitive provider while continuing to pay utilities for transmission and distribution. Residential and small business customers would continue to receive service as they do today.
As energy demand grows and older power plants retire, utility obligation to build new generation is increasing, at significant cost. Allowing large energy users to procure their own electricity helps utilities meet that obligation with private capital, which protects ratepayers and strengthens grid reliability.
Senate Bill 272 represents a commonsense step toward a more resilient energy future for Indiana — one that shifts the cost of meeting new energy demand from all ratepayers to the companies that want and need new energy.
