Season 1 Episode 1: Statehouse Seizure

House Enrolled Act No. 1007 (HEA 1007) enacts two distinct but interconnected incentives aimed at accelerating nuclear energy development and power infrastructure in Indiana, primarily to support rapid industrial load growth.

1. 20% Tax Credit for Small Modular Nuclear Reactor (SMR) Manufacturing

• Eligibility: Applies to any taxpayer (individual, corporation, partnership, or pass-through entity) incurring manufacturing expenses for an SMR in Indiana.¹
• SMR Definition: A nuclear reactor with ≤470 MW capacity, operable alone or in combination at one site, NRC-licensed, and may include hydrogen production for energy storage or fuel.²
• Credit Amount: 20% of qualified investment (manufacturing costs in Indiana), applied against adjusted gross income tax, financial institutions tax, or insurance premiums tax.³
• Carryforward: Excess credit carries forward indefinitely; no carryback or refund.⁴
• Pass-Through Entities: Credit flows to shareholders/partners based on distributive income share; only one credit per investment.⁵
• Filing Requirement: Taxpayer must submit proof of Indiana manufacturing and supporting data to the Department of State Revenue.⁶
• Effective: Taxable years beginning after December 31, 2024 (retroactive to January 1, 2025).⁷

Taxpayer Impact: Reduces state tax revenue by subsidizing SMR manufacturers. No direct benefit to general taxpayers or ratepayers; lost revenue may increase pressure on other tax sources or reduce public services.

Industry Profit: SMR manufacturers (e.g., NuScale, TerraPower, GE-Hitachi) gain a direct 20% cost reduction for Indiana-based production, incentivizing factory location and job creation in the state.⁸

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2. Expedited Regulatory Approval for New Generation (EGR Plans & Large Load Customers)

• Two Pathways:
  1. Expedited Generation Resource (EGR) Plan: For utilities facing load growth >5% of 3-year average peak or >150 MW.⁹
     • Requires 5+ year load forecast, customer commitments, pre-filing meeting (≥30 days prior), and consideration of grid-enhancing technologies.¹⁰
     • Caps expedited capacity at 75% of forecast peak.¹¹
     • IURC must rule within 90 days; auto-approved if no order issued.¹²
  2. Large Load Customer Projects: For 1–4 customers with:
     • 150 MW aggregate demand
     • ≥$500M capital investment in Indiana
     • ≥50 full-time jobs at ≥ national average wage¹³
     • Dedicated infrastructure allowed; may include risk premium paid to utility.¹⁴
     • IURC ruling in 60 days (clean energy) or 90 days.¹⁵
• Cost Recovery: Utilities may recover planning, construction, operating, and financing costs post-IURC order.¹⁶
• No Preclusion: Does not block standard regulatory pathways (e.g., IC 8-1-8.5).¹⁷

Taxpayer/Ratepayer Impact:

• Ratepayers: Risk higher electric rates as new plant costs are passed through in revenue requirements, even under “economical rates” standard.¹⁸
• Existing Customers: May subsidize infrastructure primarily serving large new users.
• General Taxpayers: Indirect cost via economic development incentives tied to large load projects.

Industry Profit:

• Utilities (Duke Energy Indiana, AES Indiana, NIPSCO): Faster approvals, guaranteed cost recovery, reduced regulatory risk.¹⁹
• Large Industrial Users (data centers, AI facilities, manufacturers): Near-certain, rapid power access for billion-dollar projects.²⁰
• Construction/Engineering Firms: Accelerated timeline for multi-billion-dollar generation projects.

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Overall Effect

HEA 1007 uses tax incentives and regulatory fast-tracking to position Indiana as a hub for SMR manufacturing and high-load industrial growth (especially data centers and advanced manufacturing). It shifts financial risk from private industry to taxpayers (via lost revenue) and ratepayers (via potential rate increases), while bypassing traditional oversight to meet aggressive timelines.

This is a targeted industrial subsidy favoring nuclear technology firms and mega-power users, justified under economic development and energy reliability goals. While it may attract investment and jobs, it prioritizes large corporate interests over broad public cost scrutiny.

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1. IC 6-3.1-45-6 (added by SECTION 1)
2. IC 6-3.1-45-4
3. IC 6-3.1-45-7
4. IC 6-3.1-45-8
5. IC 6-3.1-45-9
6. IC 6-3.1-45-10
7. SECTION 1 (effective date clause)
8. IC 6-3.1-45-3, -7
9. IC 8-1-7.9-8
10. IC 8-1-7.9-18(c)(3), (10), (11)
11. IC 8-1-7.9-18(c)(8)(B)
12. IC 8-1-7.9-19(d)
13. IC 8-1-7.9-10
14. IC 8-1-7.9-16
15. IC 8-1-7.9-21(d) (partial text in document)
16. IC 8-1-7.9-4, -5, -15
17. IC 8-1-7.9-17(c)
18. IC 8-1-7.9-18(c)(13)(B), -20(c)(8)(B)
19. IC 8-1-7.9-19, -21
20. IC 8-1-7.9-10, -14