Hallador Energy Secures Three-Year Capacity Deal at Twice Forward Prices, Generating $86M
Hallador signed a three-year agreement selling its accredited capacity for planning years 2026 through summer 2028 at prices twice its current forward contract levels, generating about $86 million in revenue. Maintaining these levels could lift capacity revenue above $130 million annually from 2029, converting to cash flow at Merom plant.
1. Agreement Terms
Hallador Energy has executed a three-year capacity sale covering planning years 2026 through summer 2028, agreeing to prices approximately double those embedded in its current forward sales book. The transaction encompasses nearly all remaining accredited capacity from the Merom Generating Station, expected to yield $86 million in cumulative revenue.
2. Financial Impact
At these elevated pricing levels, the Merom plant’s largely fixed cost base means most incremental capacity revenue converts directly to operating cash flow. The deal establishes a new pricing benchmark and strengthens Hallador’s negotiating position for future long-term capacity agreements.
3. Future Outlook
Assuming sustained pricing, capacity revenues could surpass $130 million annually from 2029 onward, adding to energy sales and bolstering cash flow ahead of the proposed 515MW natural gas simple cycle project. This revenue boost underpins Hallador’s expansion and fuel supply strategies at Merom.