LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7547 NOTE PREPARED: Apr 11, 2025
BILL NUMBER: HB 1007 BILL AMENDED: Apr 10, 2025
SUBJECT: Energy Generation Resources.
FIRST AUTHOR: Rep. Soliday BILL STATUS: 2
nd
Reading - 2
nd
House
FIRST SPONSOR: Sen. Koch
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
XFEDERAL
Summary of Legislation: (Amended) Small Modular Nuclear Reactor Credits: This bill provides a state
tax credit for expenses in manufacturing small modular nuclear reactors in Indiana and establishes procedures
for energy utilities to request approval from the Indiana Utility Regulatory Commission (IURC) for: (1)
expedited generation resource (EGR) plans to meet customer load growth; (2) generation resource submittals
under approved EGR plans; and (3) projects serving large load customers. It also sets requirements for
request approvals, financial assurances, and cost recovery for utilities and allows public utilities to seek
IURC approval to incur and recover project development costs for small modular nuclear reactors.
EGR Requirements: This bill updates EGR report requirements post-2025 for utilities retiring or refueling
generation resources of 125 megawatts or more, specifying replacement or refueling capacity details and
requires IURC staff reports on planned retirements and mandates investigations if reliability concerns arise.
It also requires utilities to specify the reasoning they are retiring these electricity generating facilities. It also
empowers the IURC to direct construction, acquisition, or delay of resource retirements to maintain service
reliability and makes technical amendments to related Indiana Code provisions.
Effective Date: Upon passage; January 1, 2025 (retroactive); July 1, 2025.
Explanation of State Expenditures: Summary - The bill could increase the workload of the IURC, Office
of Energy Development (OED), the Indiana Economic Development Corporation (IEDC), and the Office of
the Utility Consumer Counselor (OUCC). Increases in workload are expected to be accomplished within
existing resource and funding levels.
(Revised) EGR Requirements: The bill could increase the workload of the IURC to consider and approve
generational resource plans and EGR plan requests submitted by utilities. The bill could also increase the
workload of the OED, the IEDC, and the OUCC to meet with utilities as a condition of a utility’s generation
resource plan application to have each agency review the proposed plan.
In cases where an energy utility intends to serve a large-load customer, which the bill defines as a customer
requesting new electricity demand greater than 5% or the utilitiy’s peak energy load or 150 megawatts, the
HB 1007 1 IURC will seek information from the utility to ensure it complies with the requirements of the bill. The IURC
will seek descriptions of how such projects align with the state’s policy of electric utility service being
reliable, affordable, resilient, stable, and environmentally sustainable, and also require meaning financial
assurances that will result in the large load customer reimbursing the utility at least 80% of the project costs
attributable to the large load customer.
This bill will increase the workload of the IURC to arrive at facility retirement decisions concerning
resources that can generate at least 125 megawatts and acquiring energy generation resources. The IURC will
have 120 days after the initiation of a facility retirement investigation to grant an approval or denial. With
cases that involve trade secret information, the IURC will have 90 days to make a decision and shall treat
information provided accordingly. If the IURC does not grant an order in this time frame, the utility will be
considered to have met the requirements for facility retirement.
Additional Information - The operating budget of the IURC is funded by regulated utilities operating in
Indiana. The rate at which to bill the utilities is based on the agencies' budgets, less reversions, divided by
the total amount of gross intrastate operating revenue received by the regulated utilities for the previous fiscal
year. Based on this formula, utilities are currently billed approximately 0.12% of their gross intrastate
operating revenues to fund the IURC.
Explanation of State Revenues: Summary - The bill could increase utility rates paid in the state to the extent
utilities petition the IURC to recover planning costs or other specified cost allowances. Changes to utility
rates paid in the state would increase revenue the state receives from sales tax collections.
Additionally, the bill could reduce state revenue from tax credits afforded to the development small modular
nuclear reactors. The IURC has no information on planned small modular nuclear reactors in the immediate
future.
Additional Information - (Revised) EGR Requirements: Generational resource plans and EGRs could (1)
increase utility efficiencies resulting in lower energy production costs and (2) increase utility rates to the
extent the IURC approves recovery of acquisition and project costs. In the event a generational resource plan
is not approved by the IURC, the utility is still authorized to recover planning costs through rate increases.
Changes to utility rates paid in the state would increase revenue the state receives from sales tax collections.
Sales Tax revenue is deposited in the state General Fund (99.838%), Commuter Rail Service Fund (0.131%),
and Industrial Rail Service Fund (0.031%).
Small Modular Nuclear Reactor Credits: The bill allows a taxpayer to claim 20% of a taxpayer's
expenditures incurred in the manufacture of a small modular nuclear reactor in Indiana as tax credit against
an individual’s tax liability for Adjusted Gross Income Tax, Financial Institutions Tax, or Insurance
Premiums Tax. The minimum credit that is estimated to be claimed by any taxpayer is about $280 M. Since
this provision is effective tax year 2025, the fiscal impact could begin in FY 2026. Any unused amount of
this credit can be carried over into subsequent years and the credit is non-refundable.
Manufacturing costs range based on the number of kilowatts generated in the facility, anywhere from $3,000
to $8,000 per kilowatt. The tax credit is available for small modular nuclear reactors with a minimum
capacity of 470 MW (470,000 kW conversion), so minimum manufacturing costs for eligible small modular
nuclear reactors is expected to be approximately $1.4 B.
HB 1007 2 Explanation of Local Expenditures: The bill could affect municipally-owned utilities. To the extent a
municipally-owned utility is absorbed through a generational resource plan, municipally-owned utility
operations could cease. Municipally-owned utilities would also be required to report any retirement or
refueling plans to the IURC.
Explanation of Local Revenues: To the extent a municipally-owned utility successfully petitions the IURC
for recovery of generational resource planning costs, utility rates could likely increase.
State Agencies Affected: IURC, IEDC, OUCC, OED.
Local Agencies Affected: Municipally-owned utilities.
Information Sources:
https://www.cleantech.com/will-small-modular-reactors-surpass-regulatory-and-supply-chain-hurdles-to-f
ill-the-need-for-stable-baseload-power/#:~:text=Costs%20for%20SMRs%20vary%2C%20but,%243B%2
0for%20larger%20units;
https://www.in.gov/oed/resources-and-information-center/about-indiana-resources/technologies/small-mo
dular-reactors/;
https://pubs.naruc.org/pub/7CE3939B-F659-0270-21D7-7456B16F6F2E#:~:text=An%20Integrated%20
Resource%20Plan%20(IRP,economic%20development%2C%20and%20other%20factors.
Fiscal Analyst: Abdul Abdulkadri, 317-232-9852; Randhir Jha, 317-232-9556; Bill Brumbach, 317-232-
9559.
HB 1007 3