SB 424 amends Indiana utility law to create and refine a framework for public utilities to plan, seek approval for, and recover certain pre-construction costs associated with small modular nuclear reactors (SMRs). The bill defines “project development costs” to include evaluation, design, engineering, licensing, environmental review, early site permit work, equipment procurement, and carrying costs tied to SMR development. It also directs the Indiana Utility Regulatory Commission (IURC), in consultation with the Department of Environmental Management, to adopt rules governing certificates for SMR construction, purchase, or lease, including requirements for regulatory filings, confidentiality of NRC-related documents, and limits on on-site storage of spent nuclear fuel and high-level radioactive waste absent NRC compliance.
The bill gives utilities a path to ask the IURC for advance approval to incur SMR development costs and later to recover those costs through rates. The commission must evaluate whether the project is consistent with the statute and related utility planning purposes, consider the amount and timing of the costs, and issue a decision within 180 days after a complete filing, unless extended by agreement. If approved, a utility may seek a periodic rate adjustment to recover development costs, with 80% recovered through the adjustment and 20% deferred to the next general rate case. The bill also addresses canceled projects, allowing recovery of prudently incurred costs under certain conditions, and permits utilities to use an alternative deferral-and-amortization process instead of the new recovery mechanism.
In terms of state law impact, SB 424 expands Indiana’s utility regulatory structure by expressly authorizing SMR-specific planning, certification, and cost-recovery procedures. It affects the Indiana Code provisions governing utility certificates and rate recovery, and it gives the IURC additional rulemaking responsibilities and oversight duties. The bill is designed to reduce financial uncertainty for utilities considering nuclear development while preserving commission review of reasonableness, prudence, and customer impacts.
The overall sentiment reflected in the voting history appears supportive but divided. The bill passed the Senate and House with clear majorities, and the Senate later concurred with House amendments, indicating enough bipartisan or cross-faction support to advance the measure. At the same time, the recorded nays in both chambers suggest meaningful concern about the policy, likely centered on cost recovery, ratepayer exposure, and the risks of advancing nuclear projects before construction is certain.
The main points of contention are the extent to which utility customers should bear early-stage nuclear development costs, how much discretion the IURC should have in approving those costs, and whether the bill sufficiently protects ratepayers if a project is delayed or canceled. Another likely concern is the policy choice to encourage SMR development at a time when nuclear projects can involve substantial regulatory, financing, and construction risk. Supporters appear to view the bill as a way to facilitate long-term generation planning and replacement of retiring coal or gas capacity, while opponents likely worry about affordability, prudence, and the possibility of stranded costs.
The bill amends Indiana utility statutes to authorize a specific regulatory and cost-recovery framework for small modular nuclear reactor development. It requires IURC rulemaking, establishes criteria for certificate review, permits advance approval of development costs, and allows utilities to recover approved costs through periodic rate adjustments or deferred recovery in later rate cases. It also imposes filing, confidentiality, and waste-storage conditions tied to state and federal nuclear regulation, thereby affecting utilities, the IURC, and future SMR project sponsors.
The bill’s voting history suggests generally favorable sentiment, with passage in both chambers and final Senate concurrence. However, the nontrivial number of negative votes indicates that support was not unanimous and that some legislators remained concerned about nuclear project risk, ratepayer exposure, and the prudence of allowing cost recovery before a project is built. Overall, the measure appears to have been viewed as a pro-development energy policy with significant safeguards, but still controversial enough to draw opposition.
The primary contention is whether utilities should be allowed to charge customers for early SMR development costs before a reactor is approved or built, and under what conditions those costs should be recoverable if a project fails. Critics are likely focused on ratepayer protection, stranded-cost risk, and the possibility of over-optimistic project spending, while supporters emphasize the need to plan for replacement generation and to make nuclear development financially feasible. There may also be disagreement over how much authority the IURC should have in setting rules and determining prudence versus how much the bill should lock in a favorable framework for utilities.