LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7483 NOTE PREPARED: Feb 3, 2025
BILL NUMBER: SB 423 BILL AMENDED: Jan 24, 2025
SUBJECT: Small Modular Nuclear Reactor Pilot Program.
FIRST AUTHOR: Sen. Koch BILL STATUS: As Passed Senate
FIRST SPONSOR: Rep. Soliday
FUNDS AFFECTED:XGENERAL IMPACT: State
XDEDICATED
XFEDERAL
Summary of Legislation: Pilot Program: This bill establishes the Small Modular Nuclear Reactor
Partnership Pilot Program. It provides that certain electric utilities (eligible utilities) may partner with one
or more other specified types of partners (eligible partners) to develop one or more small modular nuclear
reactors at an eligible project site, subject to the approval of the Indiana Utility Regulatory Commission
(IURC). For purposes of these provisions, this bill provides that an eligible project site is: (1) a location in
Indiana; or (2) the site of a nuclear energy facility that supplies electricity to Indiana retail customers on July
1, 2011.
IURC Approval Factors: It provides that the IURC may approve a project under the program at not more than
two eligible project sites and provides that an eligible utility that seeks to develop a project with one or more
eligible partners may petition the IURC for approval to participate in the program. The bill also sets forth
the information that an eligible utility's petition must include, sets forth the factors that the IURC must
consider in reviewing a petition and requires the IURC to issue a final order approving or denying a petition
not later than 180 days after receiving the petition and the eligible utility's complete case in chief, subject
to the IURC's right to extend the time for review if the eligible utility does not object to the extension.
The bill also provides that the IURC shall approve a petition if the IURC makes specified findings and that
an eligible utility may petition the IURC for approval to incur, before obtaining a certificate of convenience
and necessity to construct an SMR under the program, eligible project development costs.
Eligible Project Cost Recovery: The bill defines "eligible project development costs" and sets forth certain
factors that the IURC must consider in reviewing an eligible utility's petition to incur eligible project
development costs. It also provides that if an eligible utility receives approval to incur eligible project
development costs, the eligible utility may petition the IURC for the approval of a rate schedule that
periodically adjusts the eligible utility's rates and charges to provide for the timely recovery of eligible
project development costs. It provides that an eligible utility that receives approval to recover eligible project
development costs shall: (1) recover 80% of the approved eligible project development costs under the
approved rate schedule; and (2) defer the remaining 20% of approved eligible project development costs for
recovery as part of the eligible utility's next general rate case before the IURC. The bill also sets forth that
SB 423 1 costs that exceed projects’ best estimate are not eligible to be recovered through rates and charges without
additional IURC findings. The bill allows projects that are cancelled or not completed to recover costs, but
prohibits cost recovery that yields a return unless the IURC arrives at certain findings.
Effective Date: July 1, 2025.
Explanation of State Expenditures: The bill could increase the workload of the Indiana Utility Regulatory
Commission (IURC) to approve rate change requests submitted by utilities that opt to enter into a small
modular nuclear reactor partnership to recover project development costs. Additionally, the bill could
increase IURC workload to adopt rules concerning establishment of the partnership pilot program as well
as recovery of program development costs. Any increase in IURC workload is expected to be accomplished
within existing resource and funding levels.
Additional Information - The bill authorizes two partnership pilot programs for small modular nuclear reactor
to operate in the state. Under the bill, the partnership pilot program would sunset at the end of FY 2025.
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: The bill allows small modular nuclear reactor partnerships to recover 80%
of project costs within a 3 year period, with 20% of the deferred to the utilities next general rate case before
the IURC. Changes to utility rates paid in the state from rate increases utilized by utilities to recover these
costs would increase revenue the state receives from sales tax collections.
Additional Information - 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%).
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Indiana Utility Regulatory Commission.
Local Agencies Affected:
Information Sources:
Fiscal Analyst: Abdulrahman Abdulkadri, 317-232-9852.
SB 423 2