Hallador Energy Company, Hoosier Energy announce agreement to transfer ownership of Merom Generating Station, multiyear PPA
February 15 2022 - 9:30AM
Hallador Energy Company (NASDAQ – HNRG), through its new subsidiary
Hallador Power Company, LLC, will acquire Hoosier Energy’s
1-Gigawatt Merom Generating Station, located in Sullivan County,
Indiana, in return for assuming certain decommissioning costs and
environmental responsibilities. The transaction, which includes a
3.5-year power purchase agreement (PPA), is scheduled to close in
mid-July 2022 upon obtaining required governmental and financial
approvals.
Per the agreement, Hoosier will purchase 100% of the plant’s
energy and capacity through May 2023, reducing purchases to 22% of
energy output and 32% of its capacity beginning in June 2023 and
through 2025. The companies’ existing renewable PPA – signed in May
2021 and representing 150 MW of solar generation and 50 MW of
battery storage – will be retained, with its start date delayed
until Merom’s eventual retirement.
“As the future owner and operator of Merom, Hallador secures
demand for up to half of its coal production for years to come,”
said Hallador Energy CEO Brent Bilsland. “With current and
anticipated market power and fuel prices, we’re confident this
investment will provide value to our shareholders. In addition, the
parties will be keeping their existing solar/battery storage PPA in
place providing a path for Merom’s transition to renewable energy
when the coal plant is eventually retired. This transaction is an
example of how Hallador intends to help the market transition from
coal to renewable energy by providing base load capacity in the
near term utilizing existing coal-fired power generation while
transitioning to renewables in the longer term. It’s a great
transaction for all involved parties.”
In January 2020, Hoosier Energy announced a new Long Range
Resource Plan, which included the expected retirement of Merom in
May 2023. Hoosier said at the time it would sell the plant if the
right deal came to fruition. After entertaining interest from a
number of different parties, the company found a unique partner in
Hallador, which is able to operate the plant at a much lower cost
given ownership and control of fuel supply.
“This is an ideal outcome for Hoosier Energy and its member
distribution cooperatives, continuing our commitment to provide
reliable, affordable and sustainable power,” said Hoosier Energy
President & CEO Donna Walker. “It’s a positive development for
current Merom employees and Sullivan County as well, preserving
more than 100 jobs and a major economic driver for the area.
Several milestones must still be achieved prior to completing the
transaction, and we will remain diligent as this process continues
to progress.”
Hoosier will retain approximately 5,760 acres of land, which has
potential for diverse economic redevelopment. Other benefits
include elimination of millions of dollars in costs for plant
decommissioning and long-term grounds maintenance. The new PPA
provides additional capacity to Hoosier as well, another important
element of the deal.
“Our 2020 Long Range Resource Plan was the right plan for
Hoosier Energy and its members, and it still is,” said Walker.
“This agreement creates a win-win dynamic, providing short- and
long-term cost savings and continued stability during the
transition of our resource portfolio, all while allowing Hoosier to
remain on course with the Long Range Resource Plan.”
Hallador will host an investor relations call on February 17,
2022, at 11 a.m. EST to further explain the transaction. See below
for details.
Participant Dial In
Information (External):
US dial-in number (Toll Free): 1 844 200 6205
US dial-in number: (Local): 1 646 904 5544
International: +1 929 526 1599
Access Code: 417976
***Webcast Details***
Webcast Title: Hallador Energy and Hoosier Transaction
Webcast Date: Thursday, February 17, 2022 at 11:00 AM Eastern
Standard Time
Audience URL:
Use this link to access the audience view of the webcast.
https://event.on24.com/wcc/r/3650521/8D7A2FC31917C732E2E3AC907146BCE4
###
Hallador Energy Company is headquartered in Terre Haute,
Indiana. To learn more visit halladorenergy.com.
Founded in 1949, Hoosier Energy is a generation and transmission
cooperative (G&T) with headquarters in Bloomington, Indiana.
The G&T provides electric power and services to 18 member
distribution cooperatives in central and southern Indiana and
southeastern Illinois. We are a community-focused organization that
works to efficiently deliver affordable, reliable and safe energy.
Collectively, our 18 members serve nearly 760,000 consumers.
Hoosier Energy is an equal opportunity provider and employer. For
more information, visit www.hoosierenergy.com.
Contact: Investor Relations
Phone: 812-299-2800
Email: Investorrelations@halladorenergy.com
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