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Overview and Summary Of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2025
Accounting Policies [Abstract]  
Significant Accounting Policies [Text Block]
1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

IPALCO is a holding company incorporated under the laws of the state of Indiana. IPALCO is owned by AES U.S. Investments (82.35%) and CDPQ (17.65%). AES U.S. Investments is owned by AES U.S. Holdings, LLC (85%) and CDPQ (15%). IPALCO owns all of the outstanding common stock of IPL, which does business as AES Indiana. Substantially all of IPALCO’s business consists of generating, transmitting, distributing and selling of electric energy conducted through its principal subsidiary, AES Indiana. AES Indiana was incorporated under the laws of the state of Indiana in 1926. AES Indiana has approximately 531,000 retail customers in the city of Indianapolis and neighboring cities, towns and communities, and adjacent rural areas all within the state of Indiana. AES Indiana has an exclusive right to provide electric service to those customers.

AES Indiana owns and operates four generating stations, all within the state of Indiana. The first station, Petersburg, consists of two coal-fired units. AES Indiana plans to convert these two coal units to natural gas. The second station, Harding Street, consists of three natural gas-fired boilers and steam turbines and uses natural gas and fuel oil to power five combustion turbines. In addition, AES Indiana operates a 20 MW battery energy storage unit at this location, which provides frequency response. The third station, Eagle Valley, is a CCGT natural gas plant. The fourth station, Georgetown, is a peaking station that uses natural gas to power combustion turbines. As of June 30, 2025, AES Indiana’s net electric generation capacity at these generating stations for winter is 3,070 MW and net summer capacity is 2,925 MW.

AES Indiana also owns and operates three renewable energy projects, including a 195 MW solar project located in Clinton County, Indiana (the ”Hardy Hills Solar Project”), which achieved full commercial operations in May 2024, a 106 MW wind facility located in Benton County, Indiana (the ”Hoosier Wind Project”), which was acquired in February 2024 and a 200 MW (800 MWh) battery energy storage project located in Pike County, Indiana (the "Pike County BESS Project'), which construction was completed and commenced operations in March 2025. See Note 2, "Regulatory Matters - IRP Filings and Replacement Generation - Pike County BESS Project" and Note 2, "Regulatory Matters - IRP Filings and Replacement Generation" to IPALCO's 2024 Form 10-K for further information.

In August 2023, AES Indiana, through a wholly-owned subsidiary, completed the acquisition of Petersburg Energy Center, LLC, including the development of a 250 MW solar and 45 MW (180 MWh) energy storage facility (the ”Petersburg Energy Center Project”). The Petersburg Energy Center Project is expected to be placed in service during the fourth quarter of 2025.

On May 16, 2025, AES Indiana, through a wholly-owned subsidiary, completed the acquisition of Crossvine Solar 1, LLC, including the development of 85 MW of solar and 85 MW (340 MWh) of energy storage which is expected to be placed in service in mid-2027.

For further discussion about AES Indiana’s plans for wind, solar, and battery energy storage projects, please see Note 2, ”Regulatory Matters - IRP Filings and Replacement Generation” to IPALCO’s 2024 Form 10-K.

Consolidation
 
The accompanying Financial Statements include the accounts of IPALCO Enterprises, Inc., AES Indiana and Mid-America Capital Resources, Inc., a non-regulated wholly-owned subsidiary of IPALCO. Furthermore, VIEs in which the Company has an ownership interest and is the primary beneficiary, thus controlling the VIE, have been consolidated. All significant intercompany amounts have been eliminated in consolidation.

IPALCO consolidates the results of AES Indiana subsidiaries that qualify as VIEs. AES Indiana is the primary beneficiary and controls the most significant activities of these VIEs. At June 30, 2025 and December 31, 2024, the assets of these VIEs were approximately $1,391.3 million and $1,169.3 million, primarily consisting of property, plant and equipment, construction work in progress and other non-current assets. At June 30, 2025 and December 31, 2024, the liabilities of these VIEs were approximately $247.8 million and $180.5 million, primarily consisting of finance leases and accounts payable.
Interim Financial Presentation

The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with GAAP, as contained in the FASB ASC, for interim financial information and Article 10 of Regulation S-X issued by the SEC. Accordingly, they do not include all the information and footnotes required by GAAP for annual fiscal reporting periods. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, comprehensive income, changes in equity, and cash flows. The results of operations for the three months ended June 30, 2025 are not necessarily indicative of expected results for the year ending December 31, 2025. The accompanying condensed consolidated financial statements are unaudited and should be read in conjunction with the 2024 audited consolidated financial statements and notes thereto, which are included in IPALCO’s 2024 Form 10-K.
 
Use of Management Estimates
 
The preparation of financial statements in conformity with GAAP requires that management make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The reported amounts of revenue and expenses during the reporting period may also be affected by the estimates and assumptions management is required to make. Actual results may differ from those estimates. Significant items subject to such estimates and assumptions include: recognition of revenue including unbilled revenue; the carrying value of property, plant and equipment; the valuation of insurance and claims liabilities; the valuation of allowances for credit losses and deferred income taxes; regulatory assets and liabilities; liabilities recorded for income tax exposures; litigation; contingencies; and assets and liabilities related to AROs and employee benefits.

Cash, Cash Equivalents and Restricted Cash

The following table provides a summary of cash, cash equivalents and restricted cash amounts reported within the Condensed Consolidated Balance Sheets that reconcile to the total of such amounts as shown on the Condensed Consolidated Statements of Cash Flows:
 June 30,December 31,
 20252024
 (In Thousands)
Cash, cash equivalents and restricted cash
     Cash and cash equivalents$70,614 $26,647 
     Restricted cash (included in Prepayments and other current assets)5 5 
          Total cash, cash equivalents and restricted cash$70,619 $26,652 

Accounts Receivable and Allowance for Credit Losses

The following table summarizes our accounts receivable balances at June 30, 2025 and December 31, 2024:
 June 30,December 31,
 20252024
 (In Thousands)
Accounts receivable, net
     Customer receivables$185,723 $207,353 
     Unbilled revenue
97,094 90,731 
     Amounts due from related parties9,430 6,461 
     Other48,098 38,331 
     Allowance for credit losses(23,057)(29,798)
           Total accounts receivable, net$317,288 $313,078 
The following table is a rollforward of our allowance for credit losses related to the accounts receivable balances for the periods indicated:
Six Months Ended June 30,
$ in Thousands20252024
Allowance for credit losses:
     Beginning balance$29,798 $2,283 
     Current period provision16,648 3,987 
     Net write-offs charged against allowance
(23,711)(320)
     Recoveries and account write-ons
322 1,071 
           Ending Balance$23,057 $7,021 

The allowance for credit losses primarily relates to utility customer receivables, including unbilled amounts. Expected credit loss estimates are developed by disaggregating customers into those with similar credit risk characteristics and using historical credit loss experience. In addition, we also consider how current and future economic conditions are expected to impact the collectability, as applicable, of our receivables balance. Amounts are written off when reasonable collections efforts have been exhausted. Beginning in 2024 and continuing into 2025, the current period provision and allowance for credit losses has increased due to a temporary pause of customer disconnections and certain collection efforts and write-off processes after the implementation of AES Indiana's customer billing system upgrade in the fourth quarter of 2023. This has resulted in higher past due customer receivables as of June 30, 2025. AES Indiana reinstituted the customer disconnections process and collection efforts and write-off processes in March 2025.

Inventories

The following table summarizes our inventory balances at June 30, 2025 and December 31, 2024:
 June 30,December 31,
 20252024
 (In Thousands)
Inventories
     Fuel$40,607 $50,842 
     Materials and supplies, net50,690 49,093 
          Total inventories$91,297 $99,935 
ARO

AES Indiana’s ARO liabilities relate primarily to environmental issues involving asbestos-containing materials, ash ponds, landfills and miscellaneous contaminants associated with its generating plants, transmission system and distribution system. The following is a roll forward of the ARO legal liabilities for the six months ended June 30, 2025 and 2024, respectively:
Six Months Ended June 30,
 20252024
 (In Thousands)
Balance as of January 1
$378,460 $249,930 
Liabilities incurred875 8,507 
Liabilities settled(10,478)(1,802)
Revisions to cash flow and timing estimates(10,575)80,221 
Accretion expense8,664 5,684 
Balance as of June 30$366,946 $342,540 
Less: ARO liabilities, current58,064 — 
ARO liabilities, non-current
$308,882 $342,540 

ARO liabilities incurred primarily relate to decommissioning costs for AES Indiana’s renewable projects, including liabilities incurred through acquisition of the Hoosier Wind Project. AES Indiana recorded revisions to its ARO liabilities during these two periods primarily to reflect revisions to cash flow estimates due to increases / (decreases) in closure costs and groundwater treatment measures for ash ponds and landfills. As of June 30, 2025 and December 31, 2024, AES Indiana did not have any assets that are legally restricted for settling its ARO liabilities. For further information, see Note 4, “ARO” to IPALCO’s 2024 Form 10-K.

AFUDC

AES Indiana capitalizes an allowance for the net cost of funds (interest on borrowed funds and a reasonable rate of return on equity funds) used for construction purposes during the period of construction with a corresponding credit to income. AFUDC equity and AFUDC debt were as follows for the periods indicated:

$ in thousandsThree Months Ended June 30,Six Months Ended June 30,
 2025202420252024
AFUDC equity$732 $1,269 $1,401 $2,100 
AFUDC debt$6,600 $6,411 $16,416 $11,687 
Intangible Assets

Finite-lived intangible assets primarily include capitalized software and project development intangible assets amortized over their useful lives. The following table presents information related to the Company’s intangible assets, including the gross amount capitalized and related amortization:

June 30,
December 31,
$ in thousands
20252024
Capitalized software
$286,261 $280,020 
Project development intangible assets
146,661 83,149 
Other
797 797 
Less: Accumulated amortization
(145,619)(131,756)
Intangible assets - net
$288,100 $232,210 
Three Months Ended June 30,
20252024
Amortization expense
$6,231 $6,788 
Six Months Ended June 30,
20252024
Amortization expense
$13,901 $13,728 

Accumulated Other Comprehensive Income

The amounts reclassified out of AOCI by component during the three and six months ended June 30, 2025 and 2024 are as follows (in Thousands):

Details about AOCI components
Affected line item in the Condensed Consolidated Statements of OperationsThree Months Ended June 30,Six Months Ended June 30,
2025202420252024
Net (gains) / losses on cash flow hedges
Interest expense$(578)$(578)$(1,156)$434 
Income tax effect144 144 288 (108)
Total reclassifications for the period, net of income taxes$(434)$(434)$(868)$326 

See Note 4, “Derivative Instruments and Hedging Activities - Cash Flow Hedges” for further information on the changes in the components of AOCI.

Tax Credit Transferability

The U.S Inflation Reduction Act of 2022 (the “IRA”) allows the owners of renewable energy projects to directly transfer ITCs to unrelated tax credit buyers. During the six months ended June 30, 2025, Pike County Energy Storage JV, LLC executed an agreement to transfer ITCs directly to a third party for $133.0 million. This amount was allocated to noncontrolling interest and treated as a capital contribution from the noncontrolling interest holder with no income tax benefit recorded by the Company. The Pike County BESS Project received and distributed to the noncontrolling interest holder, cash proceeds from these tax credit transfers of $87.8 million during the six months ended June 30, 2025, and recorded a receivable on the Condensed Consolidated Balance Sheets for the remaining $45.2 million, which is expected to be received in September 2025. The Company is contractually obligated to distribute the remaining $45.2 million in proceeds to the noncontrolling interest holder, and therefore recorded a corresponding payable on the Condensed Consolidated Balance Sheets.The receipt of cash from the transfer of tax credits is treated as an operating cash inflow on the Condensed Consolidated Statements of Cash Flows.

New Accounting Pronouncements Adopted in 2025

The Company assessed accounting pronouncements adopted in 2025 and determined that they were not applicable or did not have a material impact on the Company's Financial Statements.
New Accounting Pronouncements Issued But Not Yet Effective

The following table provides a brief description of recent accounting pronouncements that could have a material impact on the Company’s Financial Statements once adopted. Accounting pronouncements not listed below were assessed and determined to be either not applicable or are expected to have no material impact on the Company’s Financial Statements.

ASU Number and NameDescriptionDate of AdoptionEffect on the Financial Statements upon adoption
2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures
The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. Furthermore, companies are required to disclose a disaggregated amount of income taxes paid at a federal, state, and foreign level as well as a breakdown of income taxes paid in a jurisdiction that comprises 5% of a company's total income taxes paid. Lastly, this ASU requires that companies disclose income (loss) from continuing operations before income tax at a domestic and foreign level and that companies disclose income tax expense from continuing operations on a federal, state, and foreign level.
The amendments in this Update are effective for fiscal years beginning after December 15, 2024.
We are currently evaluating the impact of adopting the standard on our consolidated financial statements. This ASU only affects annual disclosures, which will be provided when the amendment becomes effective.
2024-03: Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)
The amendments in this Update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity:

1. Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (DD&A) (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e).

2. Include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements.

3. Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

4. Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The date for each amendment in this Update is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted.
We are currently evaluating the impact of adopting the standard on our consolidated financial statements. This ASU only affects disclosures, which will be provided when the amendment becomes effective.