Rep. Ed Soliday, R-Valparaiso, leads an energy committee on Tuesday, March 11, 2025. (Leslie Bonilla Muñiz/Indiana Capital Chronicle)
Indiana legislation boosting early forays into nuclear power earned utility company support on Tuesday, 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.
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.
“Our customers are concerned about our ability to supply these loads and do that in a sustainable sort of way,” Baker told the committee.
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.
That prompted Rep. Matt Pierce, D-Bloomington, to remark later, “I can understand why, from the perspective of the locals, they would certainly want to have that project built, particularly if the cost of the project is borne by people outside of their area.”
Ratepayer advocates maintained opposition.
“Say no, no, to subsidizing financially healthy, investor-owned utilities (and) tech behemoths who have deep, deep pockets,” Citizens Action Coalition Executive Director Kerwin Olson said.
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.
“If they make a filing in 2025 or 2026, whatever they file for, this bill says they have to recover that by 2029 — for a project that may never, ever happen,” Olson said. “… Where are the provisions that require the utilities to refund customers their money?”
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.
Expenditures for canceled or abandoned projects wouldn’t be recoverable without the same “reasonable, necessary, and prudent” finding. Even so, a utility wouldn’t earn returns in such cases unless regulators also find the decision was “prudently made for good cause,” that profit is “appropriate … to avoid harm” to the utility and its customers; and that costs will be offset or reimbursed through other, listed means.
Olson and others weren’t convinced.
“I think ‘reasonable’ and ‘prudent’ are my least favorite words in the English dictionary; (they’re) written by lawyers for lawyers,” Olson said. He noted that the legislation doesn’t define those terms. His other concern: “It’s the ‘shall’ provisions. The bill is littered with, ‘The utility shall recover,’ (and) ‘The commission shall approve.’”
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. Advancing Koch’s proposal now, he said, would make ratepayers into “guinea pigs for this experiment called an SMR.”
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. “Not only do we have a demand signal from industry that they want this technology, … they’re also willing to help pay for it so that it is not all on the backs of the ratepayers.”
Identical language within another measure, House Bill 1007, has also crossed into the Senate.
That’s after the committee on Tuesday 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.”
Carbon sequestration proposal ‘at the mercy of’ budget leaders
The committee didn’t take up detailed edits filed for a carbon dioxide storage and transmission measure — or accept testimony — before a vote.
Author Sen. Sue Glick, R-LaGrange, has dubbed it a “clean-up” effort for previous legislation. Lawmakers authorized a pilot project, led by Wabash Valley Resources, in 2019 and revisited it in 2023. In between, in 2022, they established regulations for carbon sequestration projects and exempted the pilot from those requirements.
Glick’s Senate Bill 457 seeks to build on those endeavors.
Indiana Senate approves education measures, narrowly OKs carbon storage measure
It would exempt pipeline companies from needing to get certificates of authority in certain cases. The legislation would also create a permit for exploratory wells and well conversions; add inspection provisions; charge new fines for legal violations; and tweak other fee amounts.
It would direct fee and fine proceeds away from topic-specific funds toward the state’s General Fund — changes made by Sen. Ryan Mishler, R-Mishawaka, who leads the powerful Senate Appropriation Committee.
An exhaustive amendment filed ahead of the committee’s meeting would’ve undone that, redirecting monies back to carbon sequestration trust and administrative funds and specifying that the funds exist to defray state spending to manage and monitor projects. It wasn’t called.
“The chair will not be accepting any amendments,” Soliday said during the meeting. “There will probably be an amendment as a trailer to another bill. The debate is who can create funds.”
“We are at the mercy of the Appropriations Committee, as you all know, and (the) Ways and Means (Committee),” Glick added later. “So we’ll live with whatever they decide we can do.”
Senate Bill 457 will head there next for a finance-focused review, after committee members advanced it in an 11-2 vote featuring bipartisan support. Rep. Tim Wesco, R-Osceola, critiqued the concept but voted in favor.
“Carbon sequestration, in my view, is likely the most expensive boondoggle of this decade. It is wasteful and pointless — but, I feel, otherwise harmless,” Wesco said. “Companies … want to spend money to do it, so, we’ll let them.”
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