1. (a) An eligible utility may:

   1. (1) simultaneously with filing a petition under section 13 of this chapter for approval to participate in the program; or

   2. (2) at any time after filing a petition under section 13 of this chapter for approval to participate in the program;

      file with the commission a petition for approval to incur, before obtaining a CPCN for the project to be developed under the program, eligible project development costs. The eligible utility must file with the petition the eligible utility's case in chief, which must contain the information and supporting documentation regarding the factors the commission must consider under subsection (b).

2. (b) In reviewing a petition and the supporting case in chief under this section, the commission shall consider the following:

   1. (1) The timeline set forth by the eligible utility under section 13(a)(7) of this chapter in the eligible utility's petition for approval to participate in the program.
   2. (2) The amount of eligible project development costs the eligible utility anticipates incurring.

3. (c) The commission shall review a petition filed under this section 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 eligible 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 under this section, the commission must make a finding as to the best estimate and reasonableness of eligible project development costs based on the evidence of record. If the commission denies the eligible utility's petition under section 13 of this chapter for approval to participate in the program, and the eligible utility seeks to pursue the development of an SMR outside the program, the eligible utility may:

   1. (1) proceed to develop an SMR under the procedures set forth in IC 8-1-8.5-12.1 ; and

   2. (2) request that the eligible utility's petition to incur eligible project development costs under this section be considered a petition to incur project development costs under IC 8-1-8.5-12.1 , subject to the eligible utility's right to supplement or revise the petition submitted under this section as necessary.

      However, an eligible utility or any other public utility (as defined in IC 8-1-8.5-1 ) that seeks to incur project development costs under IC 8-1-8.5-12.1 may recover under IC 8-1-8.5-12.1 only those project development costs that have not been and will not be recovered by the eligible utility or the public utility through contributions of any money, services, or property that have been or will be provided at no cost to the eligible utility or the public utility by any third party.

4. (d) If an eligible utility has received approval from the commission under subsection (c) to incur eligible project development costs, the eligible utility may, at any time before or during the development and execution of the project approved under the program, petition the commission for the approval of a rate schedule that periodically adjusts the eligible utility's rates and charges to provide for the timely recovery of eligible project development costs.

5. (e) If, after reviewing an eligible utility's proposed rate schedule in a petition filed under subsection (d), the commission determines that the eligible utility has incurred or will incur eligible project development costs that are:

   1. (1) reasonable in amount;
   2. (2) necessary to support the development of a project under the program; and

   3. (3) consistent with the commission's finding as to the best estimate of eligible project development costs in the commission's order of approval under subsection (c);

      the commission shall approve the recovery of the eligible project development costs, subject to subsections (f) and (g). However, an eligible 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.

6. (f) An eligible utility that recovers eligible project development costs under subsection (e) shall recover eighty percent (80%) of the approved eligible project development costs under the rate schedule approved under subsection (e) and shall defer the remaining twenty percent (20%) of approved eligible 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 eligible project development costs as part of the next general rate case that the eligible utility files with the commission.

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

   1. (1) the period over which the approved eligible project development costs are incurred; or

   2. (2) three (3) years;

      whichever is less.

8. (h) Eligible project development costs that are found by the commission to be reasonable, necessary, and consistent with the best estimate of eligible project development costs in the commission's order of approval under subsection (c) shall be recovered by an eligible utility by inclusion in the eligible utility's rates and charges. Eligible project development costs that are incurred by an eligible utility and that exceed the best estimate of eligible project development costs under subsection (c) may not be included in the eligible utility's rates and charges unless found by the commission to be reasonable, necessary, and prudent in supporting the development of the project for which they were incurred. Eligible project development costs that are incurred by an eligible utility for a project that is canceled or not completed may be recovered by the eligible 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. (1) the decision to cancel or not complete the project was prudently made for good cause;

   2. (2) the eligible project development costs incurred will be offset, as applicable, by:

      1. (A) funding opportunities from the United States Department of Energy that are pursued in good faith by the eligible utility;
      2. (B) a recoupment of revenues received by the eligible utility from one (1) or more third parties for the transfer of assets created through the costs incurred; or
      3. (C) a reimbursement of costs by a single customer or prospective customer at whose request the project was pursued; and
   3. (3) a return on the eligible project development costs incurred is appropriate under the circumstances to avoid harm to the eligible utility and its customers.
9. (i) An eligible utility may elect not to seek approval of, or cost recovery for, eligible project development costs under this section and instead seek approval from the commission to defer and amortize eligible project development costs in accordance with the procedures set forth in IC 8-1-8.5-6.5 with respect to construction costs.

As added by P.L.137-2025, SEC.1. Amended by P.L.23-2026, SEC.53.