Hallador Prices Six-Year Power and Energy Agreement at More Than $80 per Megawatt-Hour
Key Facts
Hallador Energy announced on October 8 that it had priced a new agreement combining capacity and energy sales at more than $80 per megawatt-hour, the highest price the company has contracted so far. The figure is the price of the new agreement, not the average prices at which the company has actually sold electricity in the market. Hallador Power signed the agreements with an investment-grade-rated utility in MISO Zone 6. The agreement covers supply from the Merom generating station over six years. Deliveries begin on June 1, 2029, and end on May 31, 2035. The company said the agreement lifts the sector-wide value of its forward sales backlog to about $3 billion.
The record price marks an advance over the capacity agreement Hallador announced in March, exceeding it by more than 20%, according to the company’s filing with the Securities and Exchange Commission. Hallador said this was the third agreement it had announced during 2026 and the highest capacity price it had contracted in its history. Expected revenue from the capacity component is about $271 million over the agreement term. For the energy component, the company estimates revenue of about $422 million over the full term, based on current forward prices. These estimates reflect revenue associated with a long-term contract, not revenue realized to date. The announcement did not specify a single combined total value for the agreements in the figures given for each component.
The agreement includes the purchase of an average 225 megawatts per year of Merom’s accredited capacity. The average base energy quantity is also 200 megawatts per year, subject to seasonal curtailment rights. Following the two agreements, about 95% of Merom’s accredited capacity is contracted through 2035. About two-thirds of capacity is contracted for the period from 2036 to 2040. This coverage gives the company contractual visibility extending beyond the start of deliveries scheduled for 2029. Hallador describes Merom as a one-gigawatt plant, and also operates Sunrise Coal, which produces fuel for the plant and other companies.
The company’s forward sales data show contracted capacity and energy revenue per megawatt-hour rising from $46.07 in 2026 to $73.26 in 2030. This comes as seasonal capacity auction prices for MISO Zone 6 varied during the 2025–2026 planning year. Prices reached $666.50 per megawatt-day in summer, compared with $91.60 in fall, $33.20 in winter and $69.88 in spring. These are seasonal capacity prices in a different unit from the announced agreement price per megawatt-hour, so the two prices are not directly comparable. Hallador says demand for reliable, accredited power supports the opportunity in Indiana. Chief Executive Brent Belsland attributed this to investment shifting to the state as data center projects move to or are delayed in other states, saying that this “drives demand for reliable, accredited power.”
The agreement follows quarterly results that showed pressure on Hallador’s financial performance. The company reported a net loss of $15.2 million in the second quarter of 2026, compared with net income of $8.2 million in the same period of 2025. Adjusted earnings before interest, taxes, depreciation and amortization showed a loss of $2.9 million, compared with a profit of $3.4 million a year earlier. The company attributed some of the pressure to planned maintenance on Merom’s Unit 1 and a limited, unplanned outage at Unit 2 that coincided with higher electricity prices. It said this forced it to buy electricity to meet delivery obligations. This context underscores the importance of locking in revenue through forward contracts, while actual operating results remain affected by generating-unit availability and purchase costs.
Alongside the Merom contracts, Hallador is developing the adjacent Turtle Creek natural gas project, designed for 460 megawatts. The company submitted an environmental permit application for the project on September 25, 2026. It had targeted commercial operations in the second half of 2028, with financing, infrastructure connections and construction scope remaining essential steps before a final investment decision. The company disclosed liquidity of $84.2 million on June 30, 2026. It also cited a remaining equipment purchase balance of about $338.8 million after payments through July 31, in addition to expected transportation, refurbishment, insurance and logistics costs of about $100 million. It said these cash requirements substantially exceed its available liquidity, making project financing a key factor in its next phase.