*ES0424.1*
March 13, 2025
ENGROSSED
SENATE BILL No. 424
_____
DIGEST OF SB 424 (Updated March 11, 2025 2:09 pm - DI 101)
Citations Affected: IC 8-1.
Synopsis: Small modular nuclear reactor development costs. Amends
as follows the Indiana Code section concerning certificates of public
convenience and necessity (certificates) for small modular nuclear
reactors: (1) Authorizes a public utility to petition the Indiana utility
regulatory commission (IURC) for approval to incur, before obtaining
a certificate, project development costs for the development of one or
more small modular nuclear reactors. (2) Sets forth certain factors that
the IURC must consider in reviewing a public utility's petition to incur
project development costs. (3) Requires the IURC to issue a final order
approving or denying the petition not later than 180 days after
receiving the petition and the public utility's complete case in chief,
subject to the IURC's right to extend the time for review if the public
utility does not object to the extension. (4) Provides that if a public
utility receives approval to incur project development costs, the public
utility may petition the IURC at any time before or during the
development and execution of a small modular nuclear reactor project
(Continued next page)
Effective: July 1, 2025.
Koch, Buchanan, Leising, Doriot,
Zay, Byrne, Schmitt, Buck, Raatz,
Donato, Maxwell
(HOUSE SPONSOR — SOLIDAY)
January 13, 2025, read first time and referred to Committee on Utilities.
January 27, 2025, amended, reported favorably — Do Pass.
January 30, 2025, read second time, ordered engrossed. Engrossed.
February 3, 2025, read third time, passed. Yeas 34, nays 14.
HOUSE ACTION
March 3, 2025, read first time and referred to Committee on Utilities, Energy and
Telecommunications.
March 13, 2025, amended, reported — Do Pass.
ES 424—LS 7481/DI 101 Digest Continued
for the approval of a rate schedule that periodically adjusts the public
utility's rates and charges to provide for the timely recovery of project
development costs. (5) Provides that after reviewing a public utility's
proposed rate schedule, the IURC shall approve the recovery of project
development costs by the public utility if the IURC finds that project
development costs that have been or will be incurred are: (A)
reasonable in amount; (B) necessary to support the construction,
purchase, or lease of a small modular nuclear reactor; and (C)
consistent with the commission's finding as to the best estimate of
project development costs. (6) Provides that a public utility that is
authorized to recover project development costs shall: (A) recover 80%
of the approved project development costs under the approved rate
schedule; and (B) defer the remaining 20% of approved project
development costs for recovery as part of public utility's next general
rate case before the IURC. (7) Provides that the recovery of a public
utility's project development costs through an approved periodic rate
adjustment mechanism must occur over a period that is equal to: (A)
the period over which the approved project development costs are
incurred; or (B) three years; whichever is less. (8) Provides that project
development costs that: (A) are incurred by a public utility; and (B)
exceed the best estimate of project development costs included in the
IURC's order authorizing the public utility to incur project development
costs; may not be included in the public utility's rates and charges
unless found by the IURC to be reasonable, necessary, and prudent in
supporting the construction, purchase, or lease of the small modular
nuclear reactor for which they were incurred. (9) Provides that: (A)
project development costs incurred for a project that is canceled or not
completed may be recovered by the public utility if found by the IURC
to be reasonable, necessary, and prudently incurred; but (B) such costs
shall be recovered without a return unless the IURC makes certain
additional findings. (10) Provides that if a public utility does not seek:
(A) approval of; or (B) cost recovery for; project development costs
under the bill's provisions, the IURC may approve the deferral and
amortization of project development costs in accordance with the
statutory procedures set forth for construction costs.
ES 424—LS 7481/DI 101ES 424—LS 7481/DI 101 March 13, 2025
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
ENGROSSED
SENATE BILL No. 424
A BILL FOR AN ACT to amend the Indiana Code concerning
utilities.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 8-1-8.5-12.1, AS AMENDED BY P.L.93-2024,
2 SECTION 67, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]: Sec. 12.1. (a) As used in this section, "project
4 development costs" means costs that have been incurred, or are
5 reasonably estimated to be incurred, in the development of one (1)
6 or more small modular nuclear reactors, including:
7 (1) evaluation, design, and engineering costs;
8 (2) costs for federal approvals and licensing;
9 (3) costs for environmental analyses and permitting;
10 (4) early site permit (as defined in 10 CFR 52.1) costs;
11 (5) equipment procurement costs; and
12 (6) authorized carrying costs.
13 (a) (b) As used in this section, "small modular nuclear reactor"
14 means a nuclear reactor that:
15 (1) has a rated electric generating capacity of not more than four
ES 424—LS 7481/DI 101 2
1 hundred seventy (470) megawatts;
2 (2) is capable of being constructed and operated, either:
3 (A) alone; or
4 (B) in combination with one (1) or more similar reactors if
5 additional reactors are, or become, necessary;
6 at a single site; and
7 (3) is required to be licensed by the United States Nuclear
8 Regulatory Commission.
9 The term includes a nuclear reactor that is described in this subsection
10 and that uses a process to produce hydrogen that can be used for energy
11 storage, as a fuel, or for other uses.
12 (b) (c) Not later than July 1, 2023, the commission, in consultation
13 with the department of environmental management, shall adopt rules
14 under IC 4-22-2 concerning the granting of certificates under this
15 chapter for the construction, purchase, or lease of small modular
16 nuclear reactors:
17 (1) in Indiana for the generation of electricity to be directly or
18 indirectly used to furnish public utility service to Indiana
19 customers; or
20 (2) at the site of a nuclear energy production or generating facility
21 that supplies electricity to Indiana retail customers on July 1,
22 2011.
23 (c) (d) Rules adopted by the commission under this section must
24 provide for the following:
25 (1) That in acting on a public utility's petition for the construction,
26 purchase, or lease of one (1) or more small modular nuclear
27 reactors, as described in subsection (b), (c), the commission shall
28 consider the following:
29 (A) Whether, and to what extent, the one (1) or more small
30 modular nuclear reactors proposed by the public utility will
31 replace a loss of generating capacity in the public utility's
32 portfolio resulting from the retirement or planned retirement
33 of one (1) or more of the public utility's existing electric
34 generating facilities that:
35 (i) are located in Indiana; and
36 (ii) use coal or natural gas as a fuel source.
37 (B) Whether one (1) or more of the small modular nuclear
38 reactors that will replace an existing facility will be located on
39 the same site as or near the existing facility and, if so, potential
40 opportunities for the public utility to:
41 (i) make use of any land and existing infrastructure or
42 facilities already owned or under the control of the public
ES 424—LS 7481/DI 101 3
1 utility; or
2 (ii) create new employment opportunities for workers who
3 have been, or would be, displaced as a result of the
4 retirement of the existing facility.
5 (2) That the commission may grant a certificate under this chapter
6 under circumstances and for locations other than those described
7 in subdivision (1).
8 (3) That the commission may not grant a certificate under this
9 chapter unless the owner or operator of a proposed small modular
10 nuclear reactor provides evidence of a plan to apply for all
11 licenses or permits to construct or operate the proposed small
12 modular nuclear reactor as may be required by:
13 (A) the United States Nuclear Regulatory Commission;
14 (B) the department of environmental management; or
15 (C) any other relevant state or federal regulatory agency with
16 jurisdiction over the construction or operation of nuclear
17 generating facilities.
18 (4) That any:
19 (A) reports;
20 (B) notices of violations; or
21 (C) other notifications;
22 sent to or from the United States Nuclear Regulatory Commission
23 by or to the owner or operator of a proposed small nuclear reactor
24 must be submitted by the owner or operator to the commission
25 within such times as prescribed by the commission, subject to the
26 commission's duty to treat as confidential and protect from public
27 access and disclosure any information that is contained in a report
28 or notice and that is considered confidential or exempt from
29 public access and disclosure under state or federal law.
30 (5) That any person that owns or operates a small modular nuclear
31 reactor in Indiana may not store:
32 (A) spent nuclear fuel (as defined in IC 13-11-2-216); or
33 (B) high level radioactive waste (as defined in
34 IC 13-11-2-102);
35 from the small modular nuclear reactor on the site of the small
36 modular nuclear reactor without first meeting all applicable
37 requirements of the United States Nuclear Regulatory
38 Commission.
39 (d) In adopting the rules required by this section, the commission
40 may adopt rules under IC 4-22-2.
41 (e) A public utility may petition the commission for approval to
42 incur, before obtaining a certificate under this chapter, project
ES 424—LS 7481/DI 101 4
1 development costs for the development of one (1) or more small
2 modular nuclear reactors. The public utility must file with the
3 petition the public utility's case in chief, which must contain the
4 information and supporting documentation regarding the factors
5 the commission must consider under this subsection. In reviewing
6 a petition and the supporting case in chief under this subsection,
7 the commission shall consider the following:
8 (1) Whether a project by the utility to construct, purchase, or
9 lease a small modular nuclear reactor is reasonably consistent
10 with:
11 (A) this section and rules adopted by the commission under
12 this section; and
13 (B) the purposes set forth in IC 8-1-8.8-1(b), as applicable.
14 (2) The following factors with respect to the project
15 development costs and the project for which they are to be
16 incurred:
17 (A) The amount of project development costs the public
18 utility anticipates incurring.
19 (B) The anticipated timeline for incurring the project
20 development costs.
21 (C) The anticipated date by which the public utility will
22 make a decision as to whether to seek a certificate under
23 this chapter.
24 The commission shall review a petition submitted under this
25 subsection and issue a final order approving or denying the petition
26 not later than one hundred eighty (180) days after receiving the
27 petition and complete case in chief. However, if the commission
28 makes a docket entry extending the procedural schedule and the
29 public utility does not object to the entered extension, the
30 commission may extend the one hundred eighty (180) day time
31 frame for issuing a final order under this subsection for the
32 amount of time set forth in the docket entry. In an order approving
33 a petition, the commission must make a finding as to the best
34 estimate and reasonableness of project development costs based on
35 the evidence of record.
36 (f) If a public utility has received approval from the commission
37 under subsection (e) to incur project development costs, the public
38 utility may petition the commission at any time before or during
39 the development and execution of a small modular nuclear reactor
40 project for the approval of a rate schedule that periodically adjusts
41 the public utility's rates and charges to provide for the timely
42 recovery of project development costs. A petition under this
ES 424—LS 7481/DI 101 5
1 subsection must describe any efforts by the public utility to pursue
2 funding opportunities from the United States Department of
3 Energy to offset the project development costs that the public
4 utility seeks to recover under the proposed rate schedule.
5 (g) If, after reviewing a public utility's proposed rate schedule
6 in a petition submitted under subsection (f), the commission
7 determines that the public utility has incurred or will incur project
8 development costs that are:
9 (1) reasonable in amount;
10 (2) necessary to support the construction, purchase, or lease
11 of a small modular nuclear reactor; and
12 (3) consistent with the commission's finding as to the best
13 estimate of project development costs in the commission's
14 order of approval under subsection (e);
15 the commission shall approve the recovery of the project
16 development costs, subject to subsections (h) and (i). However, a
17 public utility may not file adjustments to a rate schedule to adjust
18 for cost recovery approved under this subsection more than one (1)
19 time every twelve (12) months.
20 (h) A public utility that recovers project development costs
21 under subsection (g) shall recover eighty percent (80%) of the
22 approved project development costs under the rate schedule
23 approved under subsection (g) and shall defer the remaining
24 twenty percent (20%) of approved project development costs,
25 including, to the extent applicable, depreciation, allowance for
26 funds used during construction, and post in service carrying costs,
27 based on the overall cost of capital most recently approved by the
28 commission, and shall recover those project development costs as
29 part of the next general rate case that the public utility files with
30 the commission.
31 (i) The recovery of a public utility's project development costs
32 through a periodic rate adjustment mechanism approved by the
33 commission under subsection (g) must occur over a period that is
34 equal to:
35 (1) the period over which the approved project development
36 costs are incurred; or
37 (2) three (3) years;
38 whichever is less.
39 (j) Project development costs that are found by the commission
40 to be reasonable, necessary, and consistent with the best estimate
41 of project development costs in the commission's order of approval
42 under subsection (e) shall be recovered by a public utility by
ES 424—LS 7481/DI 101 6
1 inclusion in the public utility's rates and charges. Project
2 development costs that are incurred by a public utility and that
3 exceed the best estimate of project development costs under
4 subsection (e) may not be included in the public utility's rates and
5 charges unless found by the commission to be reasonable,
6 necessary, and prudent in supporting the construction, purchase,
7 or lease of the small modular nuclear reactor for which they were
8 incurred. Project development costs that are incurred by a public
9 utility for a project that is canceled or not completed may be
10 recovered by the public utility if found by the commission to be
11 reasonable, necessary, and prudently incurred, but such costs shall
12 be recovered without a return unless the commission also finds
13 that:
14 (1) the decision to cancel or not complete the project was
15 prudently made for good cause;
16 (2) the project development costs incurred will be offset, as
17 applicable, by:
18 (A) funding opportunities from the United States
19 Department of Energy that are pursued in good faith by
20 the public utility;
21 (B) a recoupment of revenues received by the public utility
22 from one (1) or more third parties for the transfer of assets
23 created through the costs incurred; or
24 (C) a reimbursement of costs by a single customer or
25 prospective customer at whose request the project was
26 pursued; and
27 (3) a return on the project development costs incurred is
28 appropriate under the circumstances to avoid harm to the
29 public utility and its customers.
30 (k) A public utility may elect not to seek approval of, or cost
31 recovery for, project development costs under subsections (e)
32 through (i) and instead seek approval from the commission to defer
33 and amortize project development costs in accordance with the
34 procedures set forth in section 6.5 of this chapter with respect to
35 construction costs.
36 (l) The commission may adopt rules under IC 4-22-2 to
37 implement subsections (e) through (k).
38 (e) (m) This section shall not be construed to affect the authority of
39 the United States Nuclear Regulatory Commission.
ES 424—LS 7481/DI 101 7
COMMITTEE REPORT
Mr. President: The Senate Committee on Utilities, to which was
referred Senate Bill No. 424, has had the same under consideration and
begs leave to report the same back to the Senate with the
recommendation that said bill be AMENDED as follows:
Page 2, line 27, delete "(c)" and insert "(c),".
Page 5, line 30, delete "Actual project development costs that are".
Page 5, delete lines 31 through 36.
Page 6, line 3, delete "Reasonable and necessary project
development costs that are" and insert "Project development costs
that are found by the commission to be reasonable, necessary, and
consistent with the best estimate of project development costs in
the commission's order of approval under subsection (e) shall be
recovered by a public utility by inclusion in the public utility's
rates and charges. Project development costs that are incurred by
a public utility and that exceed the best estimate of project
development costs under subsection (e) may not be included in the
public utility's rates and charges unless found by the commission
to be reasonable, necessary, and prudent in supporting the
construction, purchase, or lease of the small modular nuclear
reactor for which they were incurred. Project development costs
that are incurred by a public utility for a project that is canceled
or not completed may be recovered by the public utility if found by
the commission to be reasonable, necessary, and prudently
incurred, but such costs shall be recovered without a return unless
the commission also finds that:
(1) the decision to cancel or not complete the project was
prudently made for good cause;
(2) the project development costs incurred will be offset, as
applicable, by:
(A) funding opportunities from the United States
Department of Energy that are pursued in good faith by
the public utility;
(B) a recoupment of revenues received by the public utility
from one (1) or more third parties for the transfer of assets
created through the costs incurred; or
(C) a reimbursement of costs by a single customer or
prospective customer at whose request the project was
pursued; and
(3) a return on the project development costs incurred is
appropriate under the circumstances to avoid harm to the
public utility and its customers.
ES 424—LS 7481/DI 101 8
(k) A public utility may elect not to seek approval of, or cost
recovery for, project development costs under subsections (e)
through (i) and instead seek approval from the commission to defer
and amortize project development costs in accordance with the
procedures set forth in section 6.5 of this chapter with respect to
construction costs.".
Page 6, delete lines 4 through 17.
Page 6, line 18, delete "(k)" and insert "(l)".
Page 6, line 19, delete "(j)." and insert "(k).".
Page 6, line 20, delete "(l)" and insert "(m)".
Page 6, line 22, delete "(m)" and insert "(n)".
Page 6, line 22, delete "(k)" and insert "(l)".
and when so amended that said bill do pass.
(Reference is to SB 424 as introduced.)
KOCH, Chairperson
Committee Vote: Yeas 8, Nays 3.
_____
COMMITTEE REPORT
Mr. Speaker: Your Committee on Utilities, Energy and
Telecommunications, to which was referred Senate Bill 424, has had
the same under consideration and begs leave to report the same back
to the House with the recommendation that said bill be amended as
follows:
Page 6, delete lines 40 through 41.
and when so amended that said bill do pass.
(Reference is to SB 424 as printed January 28, 2025.)
SOLIDAY
Committee Vote: yeas 10, nays 3.
ES 424—LS 7481/DI 101