Rep. Ed Soliday, R-Valparaiso, leads an energy committee on Tuesday, March 11. Photo by Leslie Bonilla Muñiz, Indiana Capital Chronicle.

By Leslie Bonilla Muniz
Indiana Capital Chronicle

INDIANAPOLIS — Indiana legislation boosting early forays into nuclear power earned utility company support on Tuesday, March 11, but passionate opposition from ratepayer groups. It advanced from committee on a bipartisan 10-3 vote.

With demand on the rise, Hoosier political and energy leaders are increasingly eyeing emerging technology — small modular nuclear reactors, or SMRs — as a possible solution.

The United States hosts no operational SMRs. Across the globe, only China and Russia have functional ones. Some want Indiana to lead, but nuclear development is pricey.

Indiana Michigan Power President and CEO Steve Baker testifies in committee on Tuesday, March 11. Photo by Leslie Bonilla Muñiz, Indiana Capital Chronicle.

Sen. Eric Koch, R-Bedford, told the House’s energy committee that he hopes to “incentivize earlier deployment by removing what I understand to be the single-biggest barrier.”

His Senate Bill 424 would offer public utilities bringing SMRs to Indiana a path to recover pre-construction costs — including anticipated spending — from their customers before they obtain certificates of public convenience and necessity from the Indiana Utility Regulatory Commission.

Included are expenditures for design; engineering; environmental analyses and permitting; federal approvals, licensing and permitting; equipment purchases and more.

Once the IURC gives a utility permission to start spending, the company would be able to request approval of a rate schedule to pass those costs on to customers. Regulators would have to approve if they find the costs reasonable in amount, consistent with their best spending estimate and necessary to support SMR development.

A utility could recover 80% of approved costs under the resulting rate schedule within three years at most. It would defer the remaining 20% for recovery as part of its next general rate case.

Indiana Michigan Power — one of the state’s “big five” investor-owned, regulated monopolies — featured heavily in discussion.

Two of the state’s largest incoming data centers, for Amazon Web Services and Google, will be in I&M territory. President and CEO Steve Baker said tax incentives and other economic development efforts are drawing more big customers and big loads into Indiana.

I&M is “considering” an SMR at its coal-fueled Rockport power plant, he said, which is set to shutter in 2028 by federal consent decree. A state-funded Purdue University report last year found the plant is among eight Indiana coal plant sites well-suited to SMR development.

Several representatives from Spencer County, which hosts the plant, said the legislation would ensure a major property tax contributor, charitable giver and employer stays in their community.

Ratepayer advocates maintained opposition.

Olson expected I&M to begin its cost recovery asks once the bill becomes law — although an SMR wouldn’t come online at Rockport until at least 2036, in the utility’s estimate.

Citizens Action Coalition Executive Director Kerwin Olson testifies in committee on Tuesday, March 11. Leslie Bonilla Muñiz, Indiana Capital Chronicle.

Koch previously said his proposal contains “important consumer protections.”

Under Senate Bill 424, costs exceeding the IURC’s best estimate wouldn’t get passed to ratepayers unless regulators deem the spending “reasonable, necessary and prudent” in supporting reactor development.

Olson and others weren’t convinced.

Delaney Barber Kwon, the community and government affairs manager for Indiana Conservation Voters, asked the committee to consider alternative ways to support SMR development, like tax credits, public-private partnerships and more.

Joe Rompala, representing Indiana Industrial Energy Consumers Inc., similarly requested that lawmakers pursue other forms of cost recovery, like the partnership-heavy pilot program in Senate Bill 423. The trade organization includes more than 20 of the state’s largest energy consumers, he said.

Sam Carpenter, executive director of the Hoosier Environmental Council, noted that Virginia has capped SMR development cost recovery totals to just $125 million over five years and limited rider increases for the typical residential customer to $1.40 monthly.

Disagreements abounded over the legislation’s timing.

Pierce, the Bloomington Democrat, said SMR is “not quite proven” and that Indiana should wait for the technology to get better and cheaper.

But I&M’s Baker previously feared that if Indiana moves too slowly, it may struggle to compete for power-needy economic development projects. Baker said I&M wants to ensure that “we’re not too far in front, but we’re not so far behind that we don’t have the ability to act on this.”

The legislation earned a full-throated endorsement from Energy and Natural Resources Secretary Suzanne Jaworowski, one of Gov. Mike Braun’s cabinet appointees.

She said this chance to “deploy proven technology” aligns with Braun’s agenda and “all-of-the-above approach” to energy.

“This is (such) a unique moment in time that I don’t want to see Indiana miss out on the opportunity to have federal support, private-public partnership support,” Jaworowski said.

Identical language within another measure, House Bill 1007, has also crossed into the Senate.

That’s after the committee on Tuesday, March 11 stripped out the only difference: a 2035 expiration date on the cost-recovery provisions. Chair Rep. Ed Soliday, R-Valparaiso, said he “convinced” Koch to remove it because “we don’t know when these are going to come online.” The Indiana General Assembly meets often enough that it can enter a date later if needed, he said.

The twinned language is necessary because lawmakers plan to push both across the finish line, Soliday told the Capital Chronicle, citing “powers above my head.”

Energy and Natural Resources Secretary Suzanne Jaworowski listens during an energy committee hearing on Tuesday, March 11. Photo by Leslie Bonilla Muñiz, Indiana Capital Chronicle.