Hallador Merom: What the DOE Award Actually Is, and the NIPSCO-Hallador Capacity Deal That Isn't

On June 5, Hallador Energy announced its subsidiary was selected by the Department of Energy to negotiate up to $27.2 million in federal funding for the Merom Generating Station in Sullivan County, part of a $700 million federal coal initiative invoked under the Defense Production Act. Total project cost is $56.9 million. The award is not finalized and isn't expected to materially affect 2026 results.

The number that matters for your operating budget is the $1 billion-plus, 12-year NIPSCO-Hallador capacity agreement disclosed in a May 1 SEC filing, priced at approximately double historical capacity rates, contingent on IURC approval expected before September 30. That is the same date the Defense Production Act authorities underpinning the federal coal policy framework are scheduled to expire. If the NIPSCO-Hallador capacity deal closes at these rates before September 30, it sets a new regional cost floor in MISO Zone 6. If you are an Indiana operator buying power in that zone, model that scenario now.

One more wrinkle worth flagging: the EPA simultaneously has a May 2026 proposal to roll back the very wastewater standards this $56.9 million zero-liquid-discharge upgrade at Merom is being built to meet.