A newly-passed Indiana bill will speed up approval for large-load customers such as data centers and let utilities recover costs for projects they build to serve those high-demand users. Photo by Adobe Stock.

By Joe Ulery
Indiana News Service and
Casey Smith
for Indiana Capital Chronicle

INDIANAPOLIS — House Republicans gave the final go-ahead Tuesday, April 22 to a caucus priority bill that seeks to incentivize new power generation in Indiana.

A 63-23 party-line vote on House Bill 1007 set the measure on course for Gov. Mike Braun’s desk.

The bill will expedite approval processes for large-load customers like data centers and create cost recovery mechanisms for projects utilities take on to serve those big customers.

It will also require a big prospective grid addition to make “significant and meaningful financial assurances” for such projects — reimbursing at least 80% of costs and protecting other existing and future customers from the expenses.

The bill, authored by Rep. Ed Soliday, Valparaiso, additionally gets tough with utilities planning to close — or convert to natural gas — any coal-fired plants of at least 125 megawatts. Current law mandates utilities that are not generating at least 85% of peak demand to report three-year projections to the Indiana Utility Regulatory Commission.

Utilities will instead be required to annually report the amount of resource generating capacity they plan to take offline. If, after an investigation, the IURC doesn’t think a utility can provide reliable service, it would have to block the utility’s plan or order it to either acquire or build capacity.

“We’re in competition with other states,” Soliday said. “We will not be the biggest incentive-offering state. (The bill) will put us in second. We won’t get a dime if they don’t come here, but if we are able to incentivize them to come here, we get 80% of something, not 100% of nothing.”

After strong pushback, senators removed more contentious provisions that intended to specifically boost small modular nuclear reactor development — including a 20% sales tax credit for utilities.

That tax credit remains in the bill, however, for Hoosier manufacturers that produce SMR technology which could later be used by utilities in Indiana or elsewhere across the globe.

Democratic Rep. Matt Pierce, of Bloomington, said Tuesday he has concerns about the remaining tax credit, which could cost taxpayers an estimated $280 million, according to a legislative fiscal analysis.

He worried, too, that the overall bill will “force more expensive, obsolete coal plants to remain online for a longer period of time” — given that SMR development has largely been proposed on existing coal plant sites.

“Imagine what we could do with $280 million when it comes to providing people with health care, childcare, other essential services that people may rely upon the state,” Pierce said.