By John Russell

john.russell@indystar.com

Indiana hasn't tried to build a nuclear power plant since two efforts fizzled in the 1980s over high costs, nearly bankrupting one of the companies in the process.

But an influential state senator says it's time to encourage nuclear power again and has introduced a bill that would provide financial incentives to utilities to build nuclear plants.

Sen. Jim Merritt, R-Indianapolis, chairman of the Senate Utilities Committee, says nuclear energy is clean, safe and reliable and should have a place in Indiana's energy lineup.

His bill, Senate Bill 302, would allow utilities to build a nuclear plant, or a small modular reactor, and pass along the construction costs to customers years before the plant goes into operation.

Small modular reactors, which are still on the drawing board, are less than a third the size of a standard 1,000-megawatt nuclear reactor. One manufacturer, Babcock & Wilcox, has designed a 180-megawatt nuclear reactor that can be built on assembly lines rather than built from scratch on-site.

Merritt said Tuesday that no utility has expressed direct interest in building a nuclear plant or small modular reactor in Indiana. "But this could be a reality in coming years," he said in an email.

Indiana is one of the few Midwest states with no nuclear plants. It has long relied on abundant coal reserves for energy.

The Midwest is awash in aging nuclear plants, some built in the mid-1970s. Illinois has 11 nuclear plants, Michigan has four, and Ohio has two. Many of them are approaching the end of their licensed life.

Two years ago, the Indiana Senate passed a set of financial incentives for nuclear power but backed off a month later, after a catastrophic failure at a nuclear power plant in Fukushima, Japan. The failure was caused when the plant was hit by a tsunami and released large amounts of radioactive material.

But Merritt defends nuclear power as a safe energy source. In a recent column on his Senate website, Merritt said today's plants are 1,600 times safer than the decades-old technology used at such accident sites as Three Mile Island and Fukushima, citing the Nuclear Energy Institute.

"While the costs of nuclear accidents have the power to be high and long-lasting, nuclear power is actually the safest energy source and the likelihood of accidents is comparatively low," Merritt wrote.

He said the point of his bill is "to start a serious conversation about the future of nuclear energy in Indiana." His bill was referred to his committee Tuesday.

Nuclear plants produce more kilowatts of electricity at a lower cost than coal, wind or solar, he said.

The federal government is pushing small reactors, too. The Department of Energy is offering $452 million in matching grants to subsidize design and licensing costs. It predicts a commercial small reactor could get online by 2020.

Some citizens groups and environmental groups oppose the push toward small modular reactors, especially if utilities begin charging ratepayers to help build them years before they go online. They say it is unfair for households to see their bills climb, sometimes sharply, to pay for an unproven technology.

The only power plant in Indiana to be built under this financing plan, known as Construction Work in Progress (or CWIP) is Duke Energy's coal-gasification plant in Edwardsport. The plant, originally approved at $1.9 billion, has soared to more than $3.3 billion, with ratepayers picking up much of the increase.

"It will take many years of manufacturing experience before the industry will be able to confirm that small reactors can be built as cheaply as they say," Edwin Lyman, senior scientist with the Union of Concerned Scientists, wrote in a statement last fall. "And that means that it will take massive taxpayer subsidies to get this industry off the ground."

The Citizens Action Coalition of Indiana said CWIP financing has stung Indiana ratepayers in the Edwardsport case and should be avoided for nuclear plants.

"The only reason utility companies need CWIP is because those investments are too risky, too expensive, and Wall Street won't support them, similar to the Edwardsport (plant)," said Kerwin Olson, the group's executive director. "If an investment is sound, then CWIP isn't needed. If it's not a good investment for shareholders, why is it a good investment for consumers?"

The Indiana Energy Association, which represents investor-owned utilities, including Duke Energy and Indiana Michigan Power, said Tuesday it was unaware of any utility planning a nuclear facility in Indiana.

"I don't know what to make of this bill, quite frankly," said Ed Simcox, the association's president.

Duke Energy, the largest utility in Indiana, operates 12 nuclear units at seven sites in the Carolinas and Florida. The company has no plans to build a nuclear facility in Indiana, a spokeswoman said Tuesday.

Two efforts to build nuclear power plants in Indiana in the 1980s were scrapped in the face of rising opposition and high costs.

The Northern Indiana Public Service Co. had proposed a 644-megawatt Bailly Nuclear Power Plant at a site near the Indiana Dunes National Lakeshore in 1967, at a cost of $1.8 billion. It was never built.

And Public Service Indiana proposed the Marble Hill Nuclear Power Station, with two nuclear reactors, in southeastern Indiana in 1973. The company halted the project in 1984 when it was half-built, after spending $2.5 billion, making it the most expensive nuclear construction project ever abandoned. PSI was nearly bankrupted by the effort and was later bought by Cinergy, now part of Duke Energy.

But Indiana does receive electricity from a nuclear plant in southern Michigan, less than an hour north of South Bend.

Most of the output from the Cook Nuclear Power Plant, operated by the Indiana Michigan Power Co., goes to power homes and businesses in Northern Indiana. The plant, with two reactors, went online in the mid-1970s and is licensed to operate for at least two more decades.

Call Star reporter John Russell at (317) 444-6283. Follow him on Twitter: @johnrussell99.