The disclosure and our analysis
Evidence dates
Evidence: Hallador Energy Company press release furnished with a Form 8-K, dated October 8, 2026, describing agreements executed October 7, 2026. Forward sales figures are as of September 30, 2026 and include the October 7 contract. The plant's county comes from a Hoosier Energy release dated February 15, 2022.
What Hallador disclosed
**Counterparty and term:** Hallador Power Company, a wholly owned subsidiary of Hallador Energy (Nasdaq: HNRG), signed six-year capacity and energy agreements with an investment-grade MISO Zone 6 utility. The release does not name the utility. Deliveries come from the Merom Generating Station and run from June 1, 2029 through May 31, 2035. [Source 1]
**Capacity:** The utility will buy an annual average of 225 MW of Merom's accredited capacity, for about $271 million of capacity revenue over the term. Hallador says this is its third capacity agreement announced in 2026, the highest capacity price it has contracted to date, and more than 20% above the capacity contract it announced in March. [Source 1]
**Energy:** The energy agreement has an annual average base energy quantity of 200 MW, subject to seasonal reduction rights. The utility can reduce the base quantity to zero for up to 90 days a year. Hallador estimates about $422 million of energy revenue over the term at current forward prices. It estimates energy quantities of 0.9 million MWh for 2029, 1.4 million MWh for 2030 and 6.1 million MWh for 2031 to 2035. Hallador labels these figures as estimates that could vary materially. [Source 1]
**Risk allocation:** The energy sale is unit contingent. Deliveries follow the actual output of Merom's two units, and Hallador has no obligation to buy replacement power when a unit is offline or in required maintenance. Energy pricing includes a fuel price floor and recovery of qualifying excess fuel costs. Hallador notes that unit contingent sales price lower than firm sales because they carry no replacement power risk. [Source 1]
**Approvals:** Hallador says the agreements are effective on signing and require no regulatory approval. Separately, it says certain other contracted positions in its forward book are subject to Indiana Utility Regulatory Commission approval. [Source 1]
The forward price curve
Hallador published its total contracted position by year, as of September 30, 2026 and including this contract. These are portfolio averages across all of its executed contracts, not the price of this deal alone. [Source 1]
**Average contracted accredited capacity price:** $244 per MW-day for 2026, $262 for 2027, $324 for 2028, $478 for 2029, $502 for 2030, $499 for 2031 to 2035 and $480 for 2036 to 2040.
**Combined capacity and energy revenue per MWh:** $46.07 for 2026, rising to $73.26 for 2030 and $75.35 for 2031 to 2035. Hallador computes this by spreading capacity revenue over an assumed 5.2 million MWh of annual generation and adding the average contracted energy price.
**Average contracted energy price:** $42.93 per MWh for 2026, $47.73 for 2030 and $50.91 for 2031 to 2035.
**Coverage:** About 95% of Merom's accredited capacity is under contract through 2035, and about two thirds for 2036 to 2040. The total forward sales book is about $3 billion at the segment level.
The release headline describes the sale as priced at more than $80 per MWh. On our arithmetic, the company's $271 million capacity figure plus its $422 million energy estimate, divided by its 8.4 million MWh energy estimate, comes to about $82 per MWh, which is consistent with that claim. The same arithmetic puts the capacity component at roughly $550 per MW-day, based on the 225 MW annual average. Both are our calculations from averages, not disclosed contract prices.
Turtle Creek and data center demand
Hallador says it submitted an air permit application on September 25 for its 460 MW Turtle Creek natural gas project at Merom, which it says would expand its generating capacity by more than 40% once approved. Turtle Creek still needs an interconnection agreement and a final investment decision, according to the release's risk factors. [Source 1]
The release ties demand to data centers only in general terms. CEO Brent Bilsland is quoted saying that as data center projects shift or are delayed in other states, investment is flowing into Indiana. No data center customer is named or party to these agreements. [Source 1]
Buyer analysis
This is our analysis.
**This is a wholesale power deal, not data center capacity.** No megawatt here is a data center load, IT load or leasable space. The 225 MW is accredited generating capacity sold to a utility, and the 200 MW is an average energy delivery quantity.
**It is a public price point for firm capacity in Indiana.** Hallador's average contracted capacity price rises about 80% from 2027 to 2029. Utilities buy accredited capacity to meet reserve obligations, and those costs generally flow into retail and large load rates over time. Buyers and operators planning Indiana or wider MISO deployments for 2029 and later should expect capacity costs to be a larger share of delivered power price than today, and should ask how their utility tariff or contract passes those costs through.
**The risk terms matter as much as the price.** The utility accepted unit contingent energy, a fuel floor and fuel cost recovery. That shows how much leverage owners of existing, accredited generation currently have. Operators negotiating their own supply should not assume firm, fixed price terms are on offer at similar levels.
**Watch Turtle Creek.** New gas capacity at Merom would be one of the few named additions in the area. It is proposed, not permitted.
