Indiana's nuclear power legislation places costs on customers, advocates say

Yahoo

05-02-2025

Indiana lawmakers want the state to lead the way in developing small module nuclear reactors, but consumer advocates say proposed legislation will leave Hoosiers stuck with the bill for the new and unproven technology.
A series of bills introduced this year would provide Indiana's monopoly utilities the ability to recover development costs of these small reactors. Those costs, critics say, will show up on Hoosier's monthly energy bills — even if the reactors are never built and never provide any electricity.
Small module nuclear reactors are much smaller than full-scale nuclear plants, but cost estimates can run into the billions for a completed reactor. Senate bills 423, 424 and House Bill 1007 all provide utilities options to make customers pay back at least some of the costs incurred before construction even begins.
Kerwin Olson, executive director of Citizens Action Coalition, said the bills shift 100% of the risk of the to Hoosier customers.
'In three different bills we have language to force ratepayers to pay these project development costs — not only before a utility gets approval, but even before they file for approval,' Olson said. 'It's simply outrageous we would allow the investor-owned utilities to put that burden on the backs of ratepayers.'
Sen. Eric Koch, R-Bedford, introduced SB 424, which allows utilities to petition the Indiana Utility Regulatory Commission for project development costs of SMRs and ultimately recoup those costs through ratepayer bills.
Indiana lawmakers in 2022 paved the way for SMRs in the state with a policy that set rules for proposals.
'Senate Bill 424 builds upon that policy by extending recovery for preconstruction and development costs, which is very important to incentivize SMRs,' Koch said.
The two senate bills have passed through that chamber and been sent to the House, while HB1007 is scheduled for another committee hearing.
2022 law: A bill would pave the way for nuclear power in Indiana -- at a cost to consumers
Mark Nichol with the Nuclear Energy Institute told lawmakers demand and interest in SMRs is quickly accelerating.
Large energy customers, like data centers, are moving into Indiana and in some cases will double the power demand from regional utilities. While data centers are built rather quickly, SMRs are projected to be much slower to come online.
It could take 10 years to get an SMR built once a project kicks off, Nichol said, but policy conditions aren't right to enable these projects to begin.
'I do think it is a bit slower if you don't pass the legislation,' Nichol said. 'The biggest challenge is you may find yourself acting too slowly and getting left behind.'
Building reactors means developing a workforce and acquiring supplies, which are real constraints for projects, and Nichol said those who aren't at the front of the queue may have to wait to deploy the reactors.
Steve Baker, president and CEO of Indiana Michigan Power, told lawmakers his company is on the verge of explosive load growth in its service territory with the construction of data centers and is determining how to best serve those large customers.
It took I&M 120 years to gradually build out its current energy portfolio, which reaches a peak demand of about 4 gigawatts, Baker said. The new data centers and other projects being built will require 4.5 gigawatts of new energy in the next five years.
The utility has done some things to address this demand, Baker said, but there is a real opportunity with SMRs.
'We think new nuclear technology," he said, "has a role to serve.'
Consumer and environmental advocates oppose the new Indiana bills. Some say Indiana should wait until the technology is tested and proven effective.
The legislation would create a path to socializing the risks while privatizing the profits utilities stand to gain, said Shannon Anderson from Earth Charter Indiana.
'It's an interesting choice for (lawmakers) to bank state money and consumer money on unproven pieces of technology,' Anderson said.
There are only a handful of fully operational SMRs in the world today, and none of them are in the U.S., though some companies are trying to put them in the ground.
Duke Energy, based in North Carolina, is developing a SMR that originally had a proposed $75 million price tag on its development costs. That number has since ballooned to $365 million.
These are the kind of development costs Hoosier ratepayers may be on the hook to cover, and include evaluation and design costs, federal approvals, environmental analysis, site permits and other expenditures.
The bills lawmakers are putting forward are evidence of the financial risks of SMRs, Olson said. Utilities would be able to recoup the pre-planning costs before even applying for approval of a project.
'Utilities are just simply unwilling to bear that risk because the markets aren't willing to bear the risk' Olson said.
Investors, bond holders and the company should be providing the capital to run the utility, but, in large part, bills like these create unaffordable utility bills for Hoosiers, Olson said.
Sam Carpenter with the Hoosier Environmental Council echoed concerns about the financial burden Hoosiers could face.
'It is not appropriate to put somebody who is trying to cover their basic expenses and have them take the risk to pay for development planning on unproven technology," Carpenter said.
Delaney Barber Kwon with Indiana Conservation Voters said the legislation in Indiana is concerning because it mirrors the legislation passed in South Carolina in 2008 that allowed a utility there to charge its customers for a failed full-scale nuclear project.
Those South Carolina residents are still paying for a reactor the utility provider never built. The bills homeowners pay there were increased by 5.6% to pay for the failed project, according to the South Caroline Daily Gazette. This fee is meant to pay off the utility's $2.3 billion debt from the project.
That plan was for a full-scale nuclear plant, but Barber Kwon said a small module nuclear reactor project in Utah also was abandoned last year after cost estimates tripled. It was going to be the first SMR built in the U.S., but the project was abandoned after costs grew too high.
'SMRs as a whole is not something that Indiana Conservation Voters is opposed to, but this is still experimental technology and it's going to take a long time to actually implement and get it to a place where it could really work in Indiana,' Barber Kwon said.
Opposing the bills is not an indictment of nuclear power in the state, critics said, but about how new projects are funded.
'The opposition is about customers,' Olson said. 'The risk is enormous, that's why they have that language in three bills.'
IndyStar's environmental reporting project is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.
Karl Schneider is an IndyStar environment reporter. You can reach him at [e-mail]. Follow him on BlueSky @karlstartswithk.bsky.social
This article originally appeared on Indianapolis Star: Indiana's nuclear energy bills dump costs on customers, advocates say