Nuclear incentives bill heads to Braun’s desk; advocates still worried
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A major energy bill that would incentivize building small modular nuclear reactors, or SMRs, is headed to Gov. Mike Braun’s desk, though consumer advocates continue to criticize similar measures still working through the legislature.
Last week, both houses of the Indiana General Assembly finalized amendments to Senate Bill 424—mostly along party lines—which lets utility companies raise rates to recover project costs on the so-far-unproven technology.
Sen. Eric Koch, R-Bedford, and Rep. Ed Soliday, R-Valparaiso, authored the nearly identical bills SB 424 and HB 1007, and they say reducing the financial risk for large utility companies is necessary for Indiana to secure its energy future.
“This is the product of a team of about 15 who said, ‘What do we need to do to remain competitive as a state and be prepared for the future?'” Soliday said in a Senate Utilities Committee hearing Thursday. Later he added that a vote against his bill would be a vote for a “no-growth economy.”
Soliday’s HB 1007, which is currently before the Senate Tax and Fiscal Policy Committee, also would speed up the approval process for utilities who want to build energy projects for large-load customers like data centers. It also put those big customers on the hook for 80% of the cost for such projects.
But groups representing various ratepayers—including the Citizens Action Coalition, Indiana Industrial Consumers, Indiana Conservation Voters—have persisted in arguing the series of bills tips the scales against individual ratepayers.
While the Indiana Utility Regulatory Commission will have to approve new SMR projects, the groups say that oversight is narrow. The fact utility companies can get cost recovery for planning, design and environmental work years before construction even begins is a provision of the bill that’s stuck in the craw of some.
“The language allowing for the rate recovery of project development costs of SMRs without a guarantee of project completion puts Hoosiers at serious risk of paying for energy that does not exist,” said Delaney Kwown, government affairs manager for Indiana Conservation Voters.
Thursday’s committee hearing focused on concerns about the IURC only getting 90 days to rule on petitions from utility companies.
Soliday and Koch have previously amended their bills to include language that utilities can recover project costs for SMR developments only if those costs are “reasonable and necessary.”
Soliday believes giving utilities the ability to recover costs is beneficial to ratepayers in the long run because the companies will be able to secure more favorable loans, which would not then get passed on to consumers.
There are currently no nuclear plants in Indiana. Indiana Michigan Power is interested in the new trend, however, and has recently applied for a federal grant to begin feasibility studies for an SMR at the site of its current coal plant in Rockport.
Legislative rundown
SB 424: Passed by both houses, awaiting governor’s signature: Outlines guidelines the IURC must follow in approving petitions for SMRs. Allows for utilities to recover 80% of SMR-related costs within three years and the remaining 20% at the utility’s next regularly schedule rate increase.
SB 423: Passed by the Senate, awaiting House committee hearing: Establishes SMR pilot partnership program which specifies what types of businesses utility companies can partner with in developing SMRs.
HB 1007: Passed the House, passed Senate Utilities Committee, now before Senate Tax and Fiscal Policy Committee: Contains much of the same language as SB 424, but also establishes 20% tax credit for SMR projects as well as expedited timelines for IURC review of SMR petitions.