Small modular nuclear reactor development costs., the official text

First Regular Session of the 124th General Assembly (2025)

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  SENATE ENROLLED ACT No. 424

   AN ACT to amend the Indiana Code concerning utilities.

   Be it enacted by the General Assembly of the State of Indiana:

   SECTION 1. IC 8-1-8.5-12.1, AS AMENDED BY P.L.93-2024,
SECTION 67, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2025]: Sec. 12.1. (a) As used in this section, "project
development costs" means costs that have been incurred, or are
reasonably estimated to be incurred, in the development of one (1)
or more small modular nuclear reactors, including:

      (1) evaluation, design, and engineering costs;
      (2) costs for federal approvals and licensing;
      (3) costs for environmental analyses and permitting;
      (4) early site permit (as defined in 10 CFR 52.1) costs;
      (5) equipment procurement costs; and
      (6) authorized carrying costs.
   (a) (b) As used in this section, "small modular nuclear reactor"
means a nuclear reactor that:
      (1) has a rated electric generating capacity of not more than four
      hundred seventy (470) megawatts;
      (2) is capable of being constructed and operated, either:

         (A) alone; or
         (B) in combination with one (1) or more similar reactors if
         additional reactors are, or become, necessary;
      at a single site; and
      (3) is required to be licensed by the United States Nuclear

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      Regulatory Commission.
The term includes a nuclear reactor that is described in this subsection
and that uses a process to produce hydrogen that can be used for energy
storage, as a fuel, or for other uses.

   (b) (c) Not later than July 1, 2023, the commission, in consultation
with the department of environmental management, shall adopt rules
under IC 4-22-2 concerning the granting of certificates under this
chapter for the construction, purchase, or lease of small modular
nuclear reactors:

      (1) in Indiana for the generation of electricity to be directly or
      indirectly used to furnish public utility service to Indiana
      customers; or
      (2) at the site of a nuclear energy production or generating facility
      that supplies electricity to Indiana retail customers on July 1,
      2011.
   (c) (d) Rules adopted by the commission under this section must
provide for the following:
      (1) That in acting on a public utility's petition for the construction,
      purchase, or lease of one (1) or more small modular nuclear
      reactors, as described in subsection (b), (c), the commission shall
      consider the following:

         (A) Whether, and to what extent, the one (1) or more small
         modular nuclear reactors proposed by the public utility will
         replace a loss of generating capacity in the public utility's
         portfolio resulting from the retirement or planned retirement
         of one (1) or more of the public utility's existing electric
         generating facilities that:

            (i) are located in Indiana; and
            (ii) use coal or natural gas as a fuel source.
         (B) Whether one (1) or more of the small modular nuclear
         reactors that will replace an existing facility will be located on
         the same site as or near the existing facility and, if so, potential
         opportunities for the public utility to:
            (i) make use of any land and existing infrastructure or
            facilities already owned or under the control of the public
            utility; or
            (ii) create new employment opportunities for workers who
            have been, or would be, displaced as a result of the
            retirement of the existing facility.
      (2) That the commission may grant a certificate under this chapter
      under circumstances and for locations other than those described
      in subdivision (1).

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      (3) That the commission may not grant a certificate under this
      chapter unless the owner or operator of a proposed small modular
      nuclear reactor provides evidence of a plan to apply for all
      licenses or permits to construct or operate the proposed small
      modular nuclear reactor as may be required by:

         (A) the United States Nuclear Regulatory Commission;
         (B) the department of environmental management; or
         (C) any other relevant state or federal regulatory agency with
         jurisdiction over the construction or operation of nuclear
         generating facilities.
      (4) That any:
         (A) reports;
         (B) notices of violations; or
         (C) other notifications;
      sent to or from the United States Nuclear Regulatory Commission
      by or to the owner or operator of a proposed small nuclear reactor
      must be submitted by the owner or operator to the commission
      within such times as prescribed by the commission, subject to the
      commission's duty to treat as confidential and protect from public
      access and disclosure any information that is contained in a report
      or notice and that is considered confidential or exempt from
      public access and disclosure under state or federal law.
      (5) That any person that owns or operates a small modular nuclear
      reactor in Indiana may not store:
         (A) spent nuclear fuel (as defined in IC 13-11-2-216); or
         (B) high level radioactive waste (as defined in
         IC 13-11-2-102);
      from the small modular nuclear reactor on the site of the small
      modular nuclear reactor without first meeting all applicable
      requirements of the United States Nuclear Regulatory
      Commission.
   (d) In adopting the rules required by this section, the commission
may adopt rules under IC 4-22-2.
   (e) A public utility may petition the commission for approval to
incur, before obtaining a certificate under this chapter, project
development costs for the development of one (1) or more small
modular nuclear reactors. The public utility must file with the
petition the public utility's case in chief, which must contain the
information and supporting documentation regarding the factors
the commission must consider under this subsection. In reviewing
a petition and the supporting case in chief under this subsection,
the commission shall consider the following:

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      (1) Whether a project by the utility to construct, purchase, or
      lease a small modular nuclear reactor is reasonably consistent
      with:

         (A) this section and rules adopted by the commission under
         this section; and
         (B) the purposes set forth in IC 8-1-8.8-1(b), as applicable.
      (2) The following factors with respect to the project
      development costs and the project for which they are to be
      incurred:
         (A) The amount of project development costs the public
         utility anticipates incurring.
         (B) The anticipated timeline for incurring the project
         development costs.
         (C) The anticipated date by which the public utility will
         make a decision as to whether to seek a certificate under
         this chapter.
The commission shall review a petition submitted under this
subsection and issue a final order approving or denying the petition
not later than one hundred eighty (180) days after receiving the
petition and complete case in chief. However, if the commission
makes a docket entry extending the procedural schedule and the
public utility does not object to the entered extension, the
commission may extend the one hundred eighty (180) day time
frame for issuing a final order under this subsection for the
amount of time set forth in the docket entry. In an order approving
a petition, the commission must make a finding as to the best
estimate and reasonableness of project development costs based on
the evidence of record.
   (f) If a public utility has received approval from the commission
under subsection (e) to incur project development costs, the public
utility may petition the commission at any time before or during
the development and execution of a small modular nuclear reactor
project 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. A petition under this
subsection must describe any efforts by the public utility to pursue
funding opportunities from the United States Department of
Energy to offset the project development costs that the public
utility seeks to recover under the proposed rate schedule.
   (g) If, after reviewing a public utility's proposed rate schedule
in a petition submitted under subsection (f), the commission
determines that the public utility has incurred or will incur project

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development costs that are:
      (1) reasonable in amount;
      (2) necessary to support the construction, purchase, or lease
      of a small modular nuclear reactor; and
      (3) consistent with the commission's finding as to the best
      estimate of project development costs in the commission's
      order of approval under subsection (e);

the commission shall approve the recovery of the project
development costs, subject to subsections (h) and (i). However, a
public utility may not file adjustments to a rate schedule to adjust
for cost recovery approved under this subsection more than one (1)
time every twelve (12) months.

   (h) A public utility that recovers project development costs
under subsection (g) shall recover eighty percent (80%) of the
approved project development costs under the rate schedule
approved under subsection (g) and shall defer the remaining
twenty percent (20%) of approved project development costs,
including, to the extent applicable, depreciation, allowance for
funds used during construction, and post in service carrying costs,
based on the overall cost of capital most recently approved by the
commission, and shall recover those project development costs as
part of the next general rate case that the public utility files with
the commission.

   (i) The recovery of a public utility's project development costs
through a periodic rate adjustment mechanism approved by the
commission under subsection (g) must occur over a period that is
equal to:

      (1) the period over which the approved project development
      costs are incurred; or
      (2) three (3) years;
whichever is less.
   (j) 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

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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.
   (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.
   (l) The commission may adopt rules under IC 4-22-2 to
implement subsections (e) through (k).
   (e) (m) This section shall not be construed to affect the authority of
the United States Nuclear Regulatory Commission.

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President of the Senate

President Pro Tempore

Speaker of the House of Representatives

Governor of the State of Indiana

Date:                             Time:

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