Hallador Energy Co: enters power purchase and ZRC sale agreements with Duke Energy Indiana

What happened Hallador Energy Company’s wholly owned subsidiary Hallador Power Company, LLC entered into a six-year Power Purchase Agreement (PPA) with Duke Energy Indiana on Oct 7, 2026 for an annual average base energy quantity of 200 MW from the Merom Generating Station from Jun 1, 2029 through May 31, 2035. On the same date Hallador Power and Duke Energy Indiana entered into an agreement under their Master Power Purchase and Sale Agreement (MPPSA) for Hallador Power to sell an annual average of 225 zonal resource credits (ZRCs) per day from Jun 1, 2029 through May 31, 2035; Duke Energy Indiana will pay approximately $271,000,000 for the ZRCs over the six-year term. The company issued a press release on Oct 8, 2026 announcing these transactions.

Key details

• The PPA is unit contingent; deliveries follow actual output of Merom Station’s two generating units and Hallador Power has no obligation to purchase replacement power when a unit is offline or under maintenance. Duke Energy Indiana may reduce purchases to zero for up to 90 days per contract year, subject to seasonal limitations.
• PPA pricing is based on a Fuel Price Floor and a seasonal Base Adder that increase over the contract term, with provisions to allow recovery of certain excess fuel costs.
• Standby letters of credit secure obligations: for the PPA, $3,500,000 initially, $7,000,000 in Jan 2029, $4,500,000 in Jun 2031, and $2,700,000 in Jun 2033 through the end; for the MPPSA ZRC sales, $6,000,000 initially, $12,000,000 in Jan 2029, $8,000,000 in Jun 2031, and $3,000,000 in Jun 2033 through the end.
• The filing lists Item 1.01 (entry into material definitive agreements), Item 2.03 (creation of a direct financial obligation or obligation under an off-balance sheet arrangement), and Item 7.01 (Regulation FD disclosure via press release).

Why it may matter The filing reports entry into material agreements (Item 1.01) that set future energy and capacity deliveries and prices, creation of related financial obligations including standby letters of credit (Item 2.03), and a Regulation FD disclosure via press release (Item 7.01). The filing does not show why the company acted.