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Legislation to create tax credits and cost-recovery methods for utility companies brave enough to undertake so-far unproven small modular nuclear reactor projects appears poised to reach the governor’s desk.
Senate Bill 424 passed the House Utility, Energy and Communications Committee on Tuesday and will now go before the full House. The bill—authored by Sen. Eric Koch, R-Bedford—already passed the Senate and a nearly identical measure already passed the House this session, meaning the legislation is well on its way to becoming law.
At the core of the legislation is a 20% tax credit for energy companies on costs related to developing small modular nuclear reactors, or SMRs. Another key, contentious provision would let utility companies ask state regulators for the ability to recover costs on SMRs, including planning costs years before the projects break ground.
Supporters hold up nuclear power as more efficient and cleaner than any other type of energy, but say the cost to get that power connected to Indiana’s grid is too great to be borne by utility companies alone.
“You think about customers desires for sustainable power. You think about the resource adequacy needs we have on the grid—all roads point to nuclear,” said Steve Baker, president of Fort Wayne-based Indiana Michigan Power, noting the influx of huge data centers to Indiana in the past three years.
Gov. Mike Braun also appears on board with the measure, with Indiana Secretary of Energy and Natural Resources Suzanne Jaworski once again testifying to the benefits of adding nuclear power to the state’s energy gird at Tuesday’s hearing.
But, as they have in past committee sessions, consumer advocate groups decried provisions in the bill that let utility companies 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. That includes recovery costs for pre-planning stages of projects, even if they’re not built, and for projects that go over their original budgets.
The bill passed out of the House committee was previously amended to add language that would give the Indiana Utility Regulatory Commission more latitude to deny cost recovery attempts for projects that go over budget or are cancelled.
Like the name suggests, SMRs are nuclear reactors, just smaller. Experts, including researchers at Purdue University, say their smaller size makes them cheaper to operate and they can be built in more areas.
However, SMR technology is very new. It’s so new that there are currently no operational SMRs in the U.S. or Canada. That isn’t stopping I&M, which recently announced it is applying for a federal grant to begin feasibility studies for an SMR at the site of its current coal plant in Rockport.
In his testimony before lawmakers, Baker outlined that it will take decade or more and a few billion dollars to build an SMR given the lengthy engineering and regulation processes required. Even planning can run in the hundreds of millions of dollars, Baker said, so utilities need financial assurances if the state wants nuclear power.
Other nuclear proponents told lawmakers demand for nuclear SMRs will only increase and states who don’t adopt early may get stuck near the back of the line for qualified engineers and equipment.
But the Herculean task of a functioning SMR led Matt Pierce, D-Bloomington, to vote against the bill. He likened the situation to early television sets, which were extremely expensive when they were first introduced, but soon dropped in price as technology improved.
“Do we have the ratepayers rush in and buy the $13,000 television set? Or do we hang back for a little bit of time and see if this is actually proven. Because as we know, the television industry went on to flourish. TVs got into mass production, the cost came way down,” Pierce said.
Committee chair Rep. Ed Soliday, R-Valparaiso, ushered the bill through the committee in a 10-3 vote. Soliday authored House Bill 1007, a nearly identical measure to Koch’s SB 424 and said the goal is about balancing the need for more energy without offering too many incentives that could hamstring consumers or the state.
“Finding that right risk model in a changing [presidential] administration—we struggle with it,” said Soliday. “We’re not new to this. … Our job is to keep Indiana competitive, to create [energy] generation for demand.”
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WHen will the taxpayer stop having to pay for everything. The Indiana Utilties are guaranteed a profit. They should take some chances.
On its merits, I’m fine with nuclear power in Indiana, but it needs to be done right. I’m just not sure how many things the State of IN does right in general. But if it helps us ditch coal rather than expand coal, great.
We’ll need em to keep the grip running after all of these new data centers are up and running.
I hope the first one of these is built in Representative Edmond Soliday’s (Chairman of the House Utility, Energy and Communications Committee) back yard.