Hallador Energy Secures $700 Million Power Agreements, Raising Contracted Sales to $3 Billion

Hallador Energy Company (NASDAQ:HNRG) has announced approximately $700 million in new electricity capacity and energy supply agreements through its subsidiary, Hallador Power Company, LLC, increasing the company’s total forward sales book to approximately $3 billion.

The six-year agreements were signed with an investment-grade utility operating in MISO Zone 6 and cover electricity capacity and energy supplied by Hallador’s Merom Generating Station.

Deliveries are scheduled to begin on 1 June 2029 and continue until 31 May 2035.

According to the company, the agreements became effective immediately upon signing and do not require regulatory approval.

The transactions represent Hallador’s third announced capacity agreement of 2026, with the latest capacity contract priced more than 20% above the agreement disclosed in March.

The higher contracted pricing reflects improved revenue terms for the company’s generating capacity and strengthens the visibility of its future electricity sales.

Capacity and Energy Contracts Expected to Generate Nearly $700 Million

The newly announced arrangements comprise separate agreements covering generating capacity and electricity supply.

Under the capacity agreement, the utility will purchase an annual average of 225 megawatts (MW) of accredited generating capacity from the Merom facility.

Hallador expects the capacity contract to generate approximately $271 million in revenue over its six-year duration.

The accompanying energy agreement provides for an average annual base energy quantity of 200 MW.

Based on current forward electricity prices, the energy contract is expected to generate approximately $422 million in revenue during the agreement’s term.

Together, the two contracts represent approximately $693 million in anticipated revenue, which Hallador has rounded to approximately $700 million.

The agreements provide additional contracted income for the Merom facility while reducing the company’s exposure to fluctuations in future electricity market prices.

The company will supply the contracted capacity and energy over the six-year period beginning in mid-2029.

Merom Generating Station Secures Long-Term Revenue Visibility

Following the latest agreements, Hallador has contracted approximately 95% of Merom’s accredited generating capacity through 2035.

The company has also secured contracts covering approximately two-thirds of the facility’s accredited capacity for the period from 2036 through 2040.

This contracted position provides substantial visibility over the plant’s future capacity revenues and supports longer-term planning for its electricity generation operations.

Hallador reported that its combined contracted capacity and energy revenue is expected to increase from $46 per megawatt-hour (MWh) in 2026 to an average of $73 per MWh in 2030.

The corresponding average for the period from 2031 through 2035 is expected to reach $75 per MWh.

The increase in contracted revenue per unit of electricity reflects the pricing achieved through the company’s more recent agreements.

Hallador’s total forward sales book now stands at approximately $3 billion at the segment level, incorporating the newly announced contracts.

The company continues to pursue long-term agreements intended to provide greater certainty over future revenue and support investment in its generating assets.

Hallador Advances 460 MW Turtle Creek Natural Gas Project

Alongside the new power supply agreements, Hallador provided an update on its proposed Turtle Creek natural gas generation project.

The company submitted an air permit application on 25 September for the planned 460 MW facility, which would be developed adjacent to the existing Merom Generating Station.

If approved and completed, Turtle Creek would increase Hallador’s total electricity generating capacity by more than 40%.

The proposed development represents a potential expansion of the company’s power generation portfolio beyond its existing Merom operations.

However, the project remains subject to the necessary permitting and development requirements.

Hallador has not announced a final construction timetable or confirmed commercial operating date for the facility.

CEO Highlights Potential for Further Power Supply Agreements

Hallador President and Chief Executive Officer Brent Bilsland said the latest contracts reinforced management’s confidence in the company’s proposed generating capacity expansion.

“Every contract we sign strengthens our conviction in Turtle Creek and our ability to sell its output on favorable terms,” Bilsland said.

The new agreements demonstrate Hallador’s ability to secure multi-year electricity supply commitments at higher contracted prices than those achieved earlier in 2026.

They also provide a potential commercial reference point for future agreements involving the proposed Turtle Creek facility.

The combination of approximately $3 billion in forward contracted sales, extensive capacity coverage at Merom and the planned natural gas development supports Hallador’s strategy of expanding its electricity generation business.

The company will now focus on fulfilling its existing supply commitments while progressing the permitting process for Turtle Creek and evaluating further opportunities to contract future generating capacity.

Hallador Energy Company stock price