Indiana Michigan Power and its parent company AEP are considering placing a small modular nuclear reactor on the site of its Rockport plant, which is set to retire in 2028. (Don Sniegowski/Flickr) (Don Sniegowski/Flickr)
A House bill, HB 1007, aims to help ensure AI data centers coming into Indiana have the massive amount of power they need — primarily by subsidizing small nuclear plants and keeping coal and natural gas plants online.
Consumer and environmental advocates worry this could mean higher electric bills for Hoosiers.
How would the bill support the development of small modular nuclear reactors?
The bill provides a tax incentive for businesses that manufacture small modular nuclear reactors in Indiana. It also allows an Indiana utility to pass along some of the cost of building a small modular nuclear reactor to its customers — even if the plant never gets finished.
So far, none of the ones in the U.S. have been completed. One federally-funded project was canceled in 2023 after more than a decade of work and nearly $9 billion in costs.
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David Van Gilder is with the Hoosier Environmental Council — which takes a neutral stance on nuclear energy in general. He said tech companies and other investors should be the ones to take on these financial risks.
“This is not the time for what is essentially a tax on Hoosier ratepayers to support an unproven technology," he said.
Suzanne Jaworowski is the new secretary of energy and natural resources under Gov. Mike Braun. She said these small nuclear projects can be expensive to build, but tech companies like Meta are willing to pick up 75 percent of the cost.
“Let’s take advantage of that. That generation can be on the grid for 80 to 100 years providing clean, 365 power for Hoosiers,” Jaworowski said.
The bill’s author, Rep. Ed Soliday (R-Valparaiso), said he’s open to further discussion on how the bill should address situations where a utility builds a small nuclear plant and then walks away from the project.
Similar bills have been proposed in South Carolina and Virginia.
What would utilities have to do in order to retire a coal or natural gas plant?
Under the bill, utilities that want to close a coal or natural gas plant — or repower it with a different source of energy — would also have to replace it with roughly the same amount of "accredited capacity" or more.
Capacity is the maximum amount of power an energy source can provide, but accredited capacity is a little different. It takes into account how reliable that energy source is to help a utility meet demand. Each regional grid operator — like MISO and PJM — decides how to assign accredited capacity to different resources.
That could put renewable energy like wind and solar at a disadvantage. Because they don't run 24/7, grid operators could assign them a lower accredited capacity than resources like coal and natural gas plants.
Joe Rompala represents Indiana Industrial Energy Consumers, Inc. (INDIEC), which opposes the bill. He said replacing energy capacity "megawatt for megawatt" also might not be the most efficient or optimal way for a utility to meet its customers' needs.
Utilities can explore things like having lower rates for customers who use energy when the demand is low — like late at night. Rompala said larger customers like data centers can also choose to generate some of their own power or shift their operations to those hours when demand is low.
If Indiana orders a utility to keep a plant open, the utility could get approval to charge ratepayers to continue running the plant as long as those costs are “just and reasonable.”
Supporters of the bill include Indiana utilities, the Nuclear Energy Institute, the Indiana Chamber of Commerce, and Reliable Energy Inc. — a trade group that promotes coal, natural gas and nuclear.
Consumer advocates and environmental groups oppose the bill. The Indiana Manufacturers Association remains neutral, but said that it agrees with INDIEC's concerns.
Rebecca is our energy and environment reporter. Contact her at rthiele@iu.edu or follow her on Twitter at @beckythiele.
