The Indiana Utility Regulatory Commission (“IURC”) is conducting a “strawman draft” process to develop a new rule in the Indiana Administrative Code (“IAC”) at 170 IAC 4-11 pertaining to the construction, purchase, or lease of small modular nuclear reactors (“SMR”) by a public utility.
The deadline for initial round comments and feedback from the public on IURC RM #22-05 regarding 170 IAC 4-11 is January 12, 2023. The proposed rule is available at the link below.1 All responses should be sent electronically to the IURC at URCComments@urc.in.gov, and the proposed effective date for 170 IAC 4-11 is June 30, 2023. This rulemaking is being done in consultation with the Indiana Department of Environmental Management. The “strawman draft” process is in the Rule Development Step, and Final Rule, and Effective Rule are the remaining steps in Emergency Rulemaking Procedures.
Initially, it is helpful to consider the definitions of a few key terms. A “public utility” means: (1) a public, municipally-owned, or cooperatively-owned utility; or (2) a joint agency created under Ind. Code ch. 8-1-2.2. “Public utility service” means the services rendered by a public utility. Both terms are defined by Ind. Code § 8-1-8.5-1(b).
“NRC” means the U.S. Nuclear Regulatory Commission, according to 170 IAC 4-11-4. “High Level Radioactive Waste” is defined by Ind. Code § 13-11-2-102 and 42 U.S.C. § 10101 and means: (A) the highly radioactive material resulting from the reprocessing of spent nuclear fuel, including liquid waste produced directly in reprocessing and any solid material derived from such liquid waste that contains fission products in sufficient concentrations; and (B) other highly radioactive material that the [NRC], consistent with existing law, determines by rule requires permanent isolation. “Spent Nuclear Fuel” is defined by Ind. Code § 13-11-2-216 and 42 U.S.C. 10101 and means: fuel that has been withdrawn from a nuclear reactor following irradiation, the constituent elements of which have not been separated by reprocessing.
Proposed 170 IAC 4-11-1 would establish procedures for a public utility’s construction, purchase, or lease of SMRs as follows: (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.
While 170 IAC 4-11 would apply to any public utility that petitions the IURC for approval of the construction, purchase, or lease of a SMR to provide utility service to Indiana customers, it would not replace other IURC requirements: (1) to request a certificate of public convenience and necessity (“CPCN”) in Ind. Code ch. 8-1-8.5; or (2) to conduct integrated resource planning in 170 IAC 4-7.
Under proposed 170 IAC 4-11-5(a), a public utility seeking to construct, purchase, lease, or otherwise own or operate a SMR must first obtain a CPCN from the IURC (pursuant to the extensive requirements in Ind. Code ch. 8-1-8.5). Further, proposed 170 IAC 4-11-5(b)(1)-(2) requires the public utility to provide the following detailed evidence in its case-in-chief:
(b)(1) Whether, and to what extent, the SMRs 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 or more of the public utility's existing electric generating facilities that:
(b)(2) Whether one or more of the SMRs 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:
(b)(3) Its plan to apply for all licenses or permits to construct or operate the proposed SMR as may be required by:
Under 170 IAC 4-11-5(c): the IURC may grant a CPCN under circumstances and for locations other than those described in (b)(1) regarding loss of generating capacity and in (b)(2) regarding replacement of an existing facility. However, the plain language does not specifically require the IURC to grant a CPCN when a public utility provides the required evidence. In other words, the proposed rule allows the IURC to deny a CPCN even when an applicant provides all required evidence.
Proposed 170 IAC 4-11-6 would establish reporting requirements to ensure that the IURC is kept informed of NRC developments. It requires that reports, notices of violations, or other notifications to and from the NRC by or to the owner or operator of a proposed SMR must be submitted to the IURC within 30 days of being sent or received.
Additionally, the IURC proposes in 170 IAC 4-11-7 that any person that owns or operates an SMR in Indiana may not store spent nuclear fuel or high level radioactive waste from the SMR on the site of the SMR without first meeting all applicable requirements of the NRC.
Finally, Dentons has a team of experienced Indiana energy lawyers that are available to advise clients on their responses to the IURC’s proposed new rule 170 IAC 4-11.