Gov. Braun signs bill incentivizing small modular reactors
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Utility companies In Indiana will now have increased tax incentives and cost-recovery mechanisms to pursue small modular nuclear reactor projects, as Gov. Mike Braun last week signed Senate Enrolled Act 424 into law.
The legislation gives a 20% tax credit for energy companies on costs related to developing small modular nuclear reactors, or SMRs. Another key, contentious provision lets investor-owned utility companies recover costs on SMRs from Hoosier ratepayers.
The bill specifies that utility companies can seek reimbursement for planning, designing and construction costs on SMR projects. There are currently no completed SMR projects anywhere in the U.S, though Fort Wayne-based Indiana Michigan Power says it has applied for a federal grant to explore building an SMR in Rockport.
The legislation was carried by Sen. Ed Koch and Rep. Ed Soliday, both Republicans.
Braun made comments to WISH-TV earlier this year expressing apprehension about shifting all the risk of large, multi-year nuclear projects to ratepayers.
“I’m hesitant about putting that solely on the back of the rate payers. Some of that [utility companies] will have to absorb through what is called ‘capitalism.’ They are out there as investor owned, and some of that is going to have to be the risk that they take,” Braun said in February in an interview with WISH-TV.
Those comments echoed concerns from consumer advocates who are especially concerned that the bill lets utilities recoup costs even if a project goes overbudget or never gets built at all.
The Indiana Utility Regulatory Commission will have to approve new SMR projects and utility companies will only get cost recovery if the IURC deems the costs “reasonable and necessary.” The new law allows utility companies to recover 80% of their costs on an approved SMR project within three years, while the other 20% can be recovered through general rate increase requests.
But more recently, Braun has taken a stance designed to position Indiana as a nuclear-friendly state. Last week, Indiana was selected to host a retreat dealing with nuclear power and education.
“Indiana is uniquely positioned to be a national leader in nuclear energy, and this opportunity will help to inform and accelerate our strategy and focus. Collaboration is essential to ensuring reliability, affordability, economic growth and sustainability for Hoosiers,” Braun said in a written statement announcing the retreat.
Meanwhile other supports of the legislation say offering incentives for nuclear will help the state grow and diversify its energy portfolio. They note nuclear power generation is much more efficient than wind or solar.
A third bill dealing with SMRs that sets up guidelines for pilot projects and partnerships is still in the House.