1
00:00:00,240 --> 00:00:06,120
Speaker 1: So an infamous private equity firm mayby a utility here

2
00:00:06,280 --> 00:00:09,120
Speaker 1: in Central Indiana, and our next guest says the city

3
00:00:09,160 --> 00:00:11,840
Speaker 1: needs to step in before that happens. It's Kennelly Casey Show.

4
00:00:11,840 --> 00:00:14,600
Speaker 1: I'm Rob Casey's here, joined in studio by our old

5
00:00:14,640 --> 00:00:18,520
Speaker 1: friend Jacob Stewart, columnist over at Indie Star. New column

6
00:00:18,560 --> 00:00:22,640
Speaker 1: out today, Indianapolis should buy AES Indiana before black Rock can.

7
00:00:22,720 --> 00:00:25,439
Speaker 2: Jacob Stewart joins us. Now, Jacob, Hello, thanks for having

8
00:00:25,440 --> 00:00:28,800
Speaker 2: me on. Okay, so explain to our audits. So AES

9
00:00:29,120 --> 00:00:32,120
Speaker 2: is a major utility. We hear complaints about them all

10
00:00:32,120 --> 00:00:32,560
Speaker 2: the time.

11
00:00:33,120 --> 00:00:37,120
Speaker 1: They serve basically our electric service to the people of Indianapolis,

12
00:00:37,120 --> 00:00:42,800
Speaker 1: Central Indiana. Right, correct, and explain who black Rock is

13
00:00:42,840 --> 00:00:44,920
Speaker 1: before we get into what you say are the pitfalls

14
00:00:44,920 --> 00:00:45,120
Speaker 1: of this.

15
00:00:45,400 --> 00:00:47,960
Speaker 3: So they are a multi national investment firm, one of

16
00:00:48,040 --> 00:00:51,280
Speaker 3: the largest asset managers in the world, and they are

17
00:00:51,320 --> 00:00:55,320
Speaker 3: a private equity firm. And so private equity, for those unfamiliar,

18
00:00:55,640 --> 00:00:58,760
Speaker 3: is a type of company that purchases businesses with the

19
00:00:58,800 --> 00:01:01,040
Speaker 3: intent of flipping them and selling them for profit.

20
00:01:02,080 --> 00:01:06,840
Speaker 1: Okay, So Blackrock made it on state radar not too

21
00:01:06,920 --> 00:01:12,280
Speaker 1: long ago, when what was it the in purse, right,

22
00:01:12,400 --> 00:01:14,440
Speaker 1: was it in perse right? The pension fund for the

23
00:01:14,440 --> 00:01:16,119
Speaker 1: States that you're out of here, Yeah, they.

24
00:01:16,000 --> 00:01:18,520
Speaker 3: Were banned because of their ESG investments, and that had

25
00:01:18,560 --> 00:01:21,600
Speaker 3: its root in a twenty twenty three law that banned

26
00:01:21,600 --> 00:01:24,760
Speaker 3: the pension fund from using asset managers that had those

27
00:01:25,000 --> 00:01:26,280
Speaker 3: ESG commitments.

28
00:01:26,600 --> 00:01:30,280
Speaker 1: All right, So now they are looking at buying AES

29
00:01:30,600 --> 00:01:34,199
Speaker 1: And obviously this comes at a time where people are

30
00:01:34,360 --> 00:01:39,920
Speaker 1: very concerned and rightfully so, about skyrocketing utility rates. How

31
00:01:40,000 --> 00:01:43,840
Speaker 1: close is Blackrock to being an owner in AES?

32
00:01:44,360 --> 00:01:46,679
Speaker 3: So from my understanding, they've already made an offer on

33
00:01:46,840 --> 00:01:49,880
Speaker 3: AES Corp, which is the parent company of AES Indiana,

34
00:01:50,760 --> 00:01:54,040
Speaker 3: valued at around eighteen dollars a share, So it's a

35
00:01:54,080 --> 00:01:59,200
Speaker 3: multi multi billion dollar purchase and it's closing as this

36
00:01:59,280 --> 00:02:03,960
Speaker 3: is happening. Happening, so you know, they could back out,

37
00:02:04,040 --> 00:02:06,960
Speaker 3: something else could happen, but it seems pretty much guaranteed

38
00:02:06,960 --> 00:02:10,720
Speaker 3: that it's going to happen unless something changes until then.

39
00:02:10,960 --> 00:02:14,400
Speaker 1: And Blackrock is in the money making business, they're not

40
00:02:14,480 --> 00:02:18,000
Speaker 1: in the better life for you business. Right, So the

41
00:02:18,000 --> 00:02:20,120
Speaker 1: theory you have, and you go through this in this

42
00:02:20,200 --> 00:02:22,520
Speaker 1: column over at Indie start that just came out today.

43
00:02:23,200 --> 00:02:28,280
Speaker 1: Is somebody better do something fast or just steal a

44
00:02:28,280 --> 00:02:31,560
Speaker 1: phrase from the former president Joe Biden. If you think

45
00:02:31,639 --> 00:02:34,920
Speaker 1: utility rates are bad now get ready by yeah.

46
00:02:34,560 --> 00:02:38,399
Speaker 3: No exactly. So we're already worrying about rising utility rates

47
00:02:38,440 --> 00:02:41,760
Speaker 3: because of data centers and other infrastructure issues. Indiana is

48
00:02:41,800 --> 00:02:44,560
Speaker 3: not producing enough energy as it is right now to

49
00:02:44,600 --> 00:02:49,040
Speaker 3: serve their existing customers. Any private equity firm that purchases

50
00:02:49,200 --> 00:02:53,440
Speaker 3: a utility will most likely be aiming on increasing the

51
00:02:53,480 --> 00:02:59,320
Speaker 3: infrastructure even more, doubling down on the trying to bring

52
00:02:59,400 --> 00:03:01,919
Speaker 3: data centers here at any cost as many as possible,

53
00:03:02,680 --> 00:03:05,200
Speaker 3: to turn a quick profit at the back at the

54
00:03:05,240 --> 00:03:09,560
Speaker 3: expense of local residents, and then eventually they'll sell it

55
00:03:09,600 --> 00:03:10,160
Speaker 3: for a profit.

56
00:03:10,800 --> 00:03:13,440
Speaker 1: Jacob Stewart, columnist an Indie Star, is our guest. New

57
00:03:13,480 --> 00:03:16,880
Speaker 1: column out today. Indianapolis should buy as Indiana before black

58
00:03:16,960 --> 00:03:17,359
Speaker 1: Rock can.

59
00:03:17,680 --> 00:03:20,680
Speaker 2: Yeah, Jacob, how can Indianapolis buy aes so?

60
00:03:20,880 --> 00:03:23,880
Speaker 3: In nineteen eighty one, I believe it was shortly after

61
00:03:23,919 --> 00:03:29,040
Speaker 3: the state granted five or so utilities and monopoly over

62
00:03:29,120 --> 00:03:33,320
Speaker 3: wide swaths of the state. They gave Indianapolis specifically the

63
00:03:33,400 --> 00:03:36,920
Speaker 3: right to buy a utility, and that was used one

64
00:03:36,960 --> 00:03:40,360
Speaker 3: time before, as far as I'm aware, in two thousand

65
00:03:40,400 --> 00:03:43,839
Speaker 3: and two, to purchase the Indianapolis Water Company for five

66
00:03:43,920 --> 00:03:48,000
Speaker 3: hundred and forty million, and that was eventually sold to

67
00:03:48,040 --> 00:03:50,760
Speaker 3: Citizens Energy. So it's it's state law.

68
00:03:52,200 --> 00:03:52,400
Speaker 2: You know.

69
00:03:52,480 --> 00:03:56,120
Speaker 3: Exactly how that would look would be a little bit questionable.

70
00:03:56,560 --> 00:03:59,280
Speaker 3: The city county council would just pass a bill or

71
00:03:59,320 --> 00:04:02,640
Speaker 3: a ordinate to give the mayor probably the authority to

72
00:04:02,680 --> 00:04:06,440
Speaker 3: work out the terms of the deal with AES and

73
00:04:06,480 --> 00:04:08,960
Speaker 3: then we would see what happens from there. I think

74
00:04:09,040 --> 00:04:12,960
Speaker 3: ultimately as it stands, it would be you know, whether

75
00:04:13,040 --> 00:04:16,320
Speaker 3: or not aescorp actually wants to sell, But the city

76
00:04:16,320 --> 00:04:20,240
Speaker 3: could take away their ban on using eminent domain to

77
00:04:20,279 --> 00:04:24,080
Speaker 3: take the property of utilities. That was also a nineteen

78
00:04:24,160 --> 00:04:28,920
Speaker 3: eighty eighty law they passed, So that would put them

79
00:04:28,920 --> 00:04:31,480
Speaker 3: on the same footing as they had when they purchased

80
00:04:31,520 --> 00:04:33,960
Speaker 3: the Indianapolis Water Company because they had a right to

81
00:04:34,000 --> 00:04:34,600
Speaker 3: first purchase.

82
00:04:34,640 --> 00:04:38,440
Speaker 1: Then okay, So a couple questions, the state passes this

83
00:04:38,640 --> 00:04:44,400
Speaker 1: law that basically forces Blackrock out of state investing or

84
00:04:44,440 --> 00:04:49,440
Speaker 1: state investments bring a part of state investing. Can't they

85
00:04:49,600 --> 00:04:54,120
Speaker 1: do something to say, eh, you guys aren't stepping in

86
00:04:54,400 --> 00:04:57,120
Speaker 1: or Why is the state, who clearly has a problem

87
00:04:57,120 --> 00:05:01,240
Speaker 1: with Blackrock, allowing something like this when they grant the

88
00:05:02,240 --> 00:05:04,560
Speaker 1: utility to be a monopoly.

89
00:05:04,480 --> 00:05:08,039
Speaker 3: Right, and this is by choice. I've spoken to Citizens'

90
00:05:08,040 --> 00:05:11,920
Speaker 3: Action Coalitions executive director Crone Olsen over Twitter. He's spoken

91
00:05:11,920 --> 00:05:15,880
Speaker 3: about it. There was a recent merger between two utilities,

92
00:05:15,920 --> 00:05:19,080
Speaker 3: and the Indiana Utility Regulatory Commission essentially said we don't

93
00:05:19,120 --> 00:05:20,599
Speaker 3: have any approval jurisdiction over this.

94
00:05:21,640 --> 00:05:23,400
Speaker 2: So they had approval over everything, right.

95
00:05:23,279 --> 00:05:26,480
Speaker 3: You would think, but they're they're very limited apparently either

96
00:05:26,520 --> 00:05:30,680
Speaker 3: by their own willingness to do things or just state

97
00:05:30,680 --> 00:05:32,039
Speaker 3: their authority they're given by the state.

98
00:05:32,080 --> 00:05:36,640
Speaker 2: So they limited on everything, but raising the rights. Yeah,

99
00:05:36,720 --> 00:05:39,080
Speaker 2: very unlimited in that go ahead.

100
00:05:39,080 --> 00:05:40,920
Speaker 3: Sorry, So the state would have to pass the law

101
00:05:40,960 --> 00:05:43,599
Speaker 3: giving them approval jurisdiction over it. They probably have to

102
00:05:43,640 --> 00:05:47,679
Speaker 3: specifically spell out no private equity cannot buy utilities, because

103
00:05:47,720 --> 00:05:50,760
Speaker 3: otherwise the iu RC probably would not do much about it.

104
00:05:50,839 --> 00:05:51,640
Speaker 2: No problem, Rob.

105
00:05:51,880 --> 00:05:54,560
Speaker 3: You know how good the legislature is about passive bills

106
00:05:54,560 --> 00:05:55,400
Speaker 3: for the residents.

107
00:05:55,640 --> 00:05:56,400
Speaker 2: So this is.

108
00:05:56,320 --> 00:05:58,400
Speaker 1: Sort of like almost the way you're making a sound

109
00:05:58,400 --> 00:06:00,799
Speaker 1: and you make a set of this column of FATA

110
00:06:00,880 --> 00:06:03,720
Speaker 1: compley that Blackrock is gonna own a big portion of AES.

111
00:06:04,080 --> 00:06:08,159
Speaker 3: Yeah, yeah, more than likely. It would be a hard,

112
00:06:08,880 --> 00:06:12,520
Speaker 3: hard sell probably to get the Indiana General Assembly to

113
00:06:12,520 --> 00:06:15,240
Speaker 3: support a bill like that, especially given you know indie

114
00:06:15,240 --> 00:06:19,320
Speaker 3: stars reported previously about how much the energy lobbyists have

115
00:06:20,680 --> 00:06:23,559
Speaker 3: you know, given to leadership in the General SEMM.

116
00:06:23,640 --> 00:06:27,719
Speaker 1: Do you buy this like braun is now Ebenezer Screwedge,

117
00:06:27,760 --> 00:06:30,640
Speaker 1: who has been visited by the ghosts of utility rate

118
00:06:30,720 --> 00:06:33,960
Speaker 1: hikes past, and now he's woke up Christmas morning shouting

119
00:06:34,000 --> 00:06:36,400
Speaker 1: I'll change, I'll change. I mean he just signed this

120
00:06:36,800 --> 00:06:40,680
Speaker 1: doctor Frankenstein SMR bill that's gonna raise everybody's rates over time.

121
00:06:41,000 --> 00:06:43,599
Speaker 1: Do you are you buying this? Oh, it's all no

122
00:06:43,760 --> 00:06:45,440
Speaker 1: rate hikes all the time now for me.

123
00:06:46,040 --> 00:06:48,240
Speaker 3: No, And it's really it's it's kind of out of

124
00:06:48,279 --> 00:06:51,279
Speaker 3: his control. Everything he's said to do it has done

125
00:06:51,400 --> 00:06:55,560
Speaker 3: quote unquote so far has been mostly symbolic. To actually

126
00:06:55,680 --> 00:06:58,839
Speaker 3: change this and change utility policy, it would have to

127
00:06:58,839 --> 00:07:02,120
Speaker 3: be through the general State, which is for years past

128
00:07:02,279 --> 00:07:05,720
Speaker 3: laws that benefit the utility monopolies at the expense of consumers.

129
00:07:05,800 --> 00:07:07,360
Speaker 2: Yeah, it's so holiday got big mad.

130
00:07:07,440 --> 00:07:09,120
Speaker 1: We think it was at us and that hearing the

131
00:07:09,160 --> 00:07:11,640
Speaker 1: other day, and it was not very nice.

132
00:07:11,840 --> 00:07:13,520
Speaker 2: All right, Jacob Stewart with us a couple of minutes

133
00:07:13,560 --> 00:07:15,280
Speaker 2: left with him. Call him over at the Indie Star.

134
00:07:15,400 --> 00:07:18,520
Speaker 1: Now you can read this indianoplistioned by as Indiana before

135
00:07:18,560 --> 00:07:21,040
Speaker 1: black Rock can. Now people will hear you say this,

136
00:07:21,120 --> 00:07:23,640
Speaker 1: and they'll say, Okay, you worked for the Republicans in

137
00:07:23,680 --> 00:07:27,640
Speaker 1: the Senate. The Republicans or Republican minded people are supposed

138
00:07:27,680 --> 00:07:31,480
Speaker 1: to be no government intervention at any time. Joe hog

139
00:07:31,520 --> 00:07:34,240
Speaker 1: Set can't run a lemonade stand to save his life.

140
00:07:34,760 --> 00:07:38,280
Speaker 1: How does hog Set and the Democrat controlled city County

141
00:07:38,360 --> 00:07:40,600
Speaker 1: Council make this thing better?

142
00:07:40,880 --> 00:07:41,240
Speaker 2: Yeah?

143
00:07:41,320 --> 00:07:45,920
Speaker 3: So there are already seventy two municipal electrical utilities in

144
00:07:45,960 --> 00:07:47,840
Speaker 3: the state. So it's not without.

145
00:07:47,560 --> 00:07:50,640
Speaker 2: Precedent electrical utilities. Yes, holy smike.

146
00:07:50,840 --> 00:07:54,080
Speaker 3: So there's seventy two of them already. Whatever happens with

147
00:07:54,280 --> 00:07:57,920
Speaker 3: this particular example, the city would not have to manage it.

148
00:07:57,960 --> 00:08:00,280
Speaker 3: The city would not even have to own it eventually

149
00:08:00,280 --> 00:08:03,280
Speaker 3: if they don't want to. Back when the city bought

150
00:08:03,320 --> 00:08:07,560
Speaker 3: the Indianapolis Water Company, they contracted out the management. That's

151
00:08:07,960 --> 00:08:09,320
Speaker 3: how it works a lot of the times when it

152
00:08:09,360 --> 00:08:12,040
Speaker 3: comes to like sewer utilities, and other types of utilities

153
00:08:12,040 --> 00:08:14,480
Speaker 3: in the natural monopolies the city doesn't have the expertise

154
00:08:14,480 --> 00:08:17,160
Speaker 3: to run, or they could just sell it to Citizens

155
00:08:17,240 --> 00:08:21,080
Speaker 3: Energy like they did the Indianapolis Water Company, and if

156
00:08:21,120 --> 00:08:24,280
Speaker 3: they were willing to purchase it, and that would be

157
00:08:24,400 --> 00:08:26,880
Speaker 3: much better than Black Rock or even a for profit

158
00:08:26,880 --> 00:08:31,000
Speaker 3: company because Citizens Energy is a public charitable trust, so

159
00:08:31,040 --> 00:08:34,240
Speaker 3: it's run like a nonprofit. You know, Josh Bain, who's

160
00:08:34,240 --> 00:08:38,160
Speaker 3: a Republican city county councilor he'd support it if the

161
00:08:38,360 --> 00:08:42,760
Speaker 3: end result was a cooperative management and that means the

162
00:08:42,880 --> 00:08:47,040
Speaker 3: utility customers would be the owners essentially. And there's plenty

163
00:08:47,120 --> 00:08:50,680
Speaker 3: of examples of those two, like rural electric membership cooperatives.

164
00:08:51,320 --> 00:08:55,040
Speaker 3: So these things could be spelled out in whatever deal

165
00:08:55,080 --> 00:08:58,560
Speaker 3: the city council makes. How would it be funded through

166
00:08:58,640 --> 00:09:01,400
Speaker 3: revenue bonds? That how a lot of the times like

167
00:09:01,480 --> 00:09:05,200
Speaker 3: school improvements are yes, I'm sure.

168
00:09:05,000 --> 00:09:07,520
Speaker 2: That's tax increases, revenue bonds or.

169
00:09:07,520 --> 00:09:10,800
Speaker 3: Tax increases, So they would be sold to locals and

170
00:09:12,160 --> 00:09:15,040
Speaker 3: it would be separate from the general fund. It would

171
00:09:15,040 --> 00:09:17,240
Speaker 3: be separate from the one point seven billion dollar budget

172
00:09:17,280 --> 00:09:21,840
Speaker 3: Indianapolis passed, and it would be paid for, presumably hopefully

173
00:09:21,920 --> 00:09:27,079
Speaker 3: out of the whatever revenue the local utility makes, so,

174
00:09:27,240 --> 00:09:30,600
Speaker 3: in other words, taxpayers would pay for it. It's either

175
00:09:30,640 --> 00:09:32,560
Speaker 3: that or they pay it in their next electricity bill.

176
00:09:33,400 --> 00:09:36,600
Speaker 1: The column Indianapols should my ees Indiana before black Rock can?

177
00:09:36,720 --> 00:09:40,400
Speaker 2: Jacob Stewart, Indie Star. Thank you, Thank you,