Lawmakers betting state energy policy on speculative future and ancient past

Indiana’s appetite for economic growth continues to shape policy at a rapid pace — and that’s becoming a problem.

Two developments last week highlight how far the state is willing to go to support industrial expansion. First, the Indiana House advanced House Bill 1007, a measure that would fast track utility approvals, subsidize early-stage development of small modular nuclear reactors and impose new constraints on coal plant closures. SMRs are a promising technology, but there are no working models in the United States. Coal, by contrast, is a dirty energy that just won’t stay buried.

Then came word that electric demand for the Lebanon-based LEAP Innovation District has doubled. The Limitless Exploration/Advanced Pace district is now projected to need 1,200 megawatts — enough to power 1.2 million homes. Eli Lilly & Co. remains the anchor tenant, with Meta reportedly in the pipeline. This not only means high-paying jobs, but LEAP could be an economic development jewel the state needs to lure the tech sector here. But the state’s message is undeniable: Whatever it takes to attract high-tech development, Indiana is prepared even if it leaves Hoosiers guaranteeing the risk.

This comes from the party that prides itself on fiscal responsibility and practicality.

HB 1007 contains an 80/20 reimbursement model that should concern every Hoosier who pays a utility bill. It allows utilities to recover 80% of project development costs for small reactors from ratepayers before those projects are completed or even fully approved. The remaining 20% would be deferred to a future rate case. Supporters argue this reduces borrowing costs, but it effectively shifts financial risk from shareholders to customers. If an SMR project is delayed, canceled or over budget — a realistic possibility given the lack of proven examples — ratepayers are still on the hook.

Kerwin Olson, executive director of the Citizens Action Coalition, views HB 1007 as the latest in a long line of legislation that uses consumers as a backstop for speculative energy investments. “Ratepayers are being used more and more as economic development tools, which is a contributing factor underlying the utility affordability crisis Hoosier consumers are experiencing today,” Olson told The Journal Gazette Monday.

“Ratepayers pay for the provision of utility service,” Olson continued, “not for economic development subsidies — or even worse, ‘project development costs’ for commercially unavailable SMRs.”

Olson also pointed to the politics behind the policy. “Elected and public officials welcome economic development subsidies hidden in everyone’s monthly utility bills,” he said. “They don’t have to raise taxes, reduce services or otherwise reallocate tax revenues. And they can just blame the greedy utilities … while celebrating the new jobs at ribbon-cuttings and cocktail parties.”

HB 1007 needs far more scrutiny than it has been given, which is par for the course given how secretive the Indiana Economic Development Authority has been about LEAP. Hoosiers deserve an energy policy that prioritizes affordability and accountability, not blank checks and crossed fingers.