Hoosier Energy’s Merom Generating Station in Sullivan County has a new owner — Hallador Power Company, LLC, a subsidiary of Terre Haute-based Hallador Energy Company. The transaction — which includes a 3 ½ year power purchase agreement (PPA) — is scheduled to close in mid-July once required governmental and financial approvals are obtained.
Here’s what this means to you and Hoosier Energy:
How much power does the Merom Generating Station produce?
Why was the Merom plant sold?
In January 2020, Hoosier Energy announced a new Long Range Resource Plan, which included the expected retirement of Merom in May 2023. Hoosier Energy said at the time it would sell the plant if the right deal came to fruition. After entertaining interest from a number of different parties, the company found a unique partner in Hallador, which is able to operate the plant at a much lower cost given ownership and control of fuel supply. “This is an ideal outcome for Hoosier Energy and its member distribution cooperatives, continuing our commitment to provide reliable,
affordable and sustainable power,” said Hoosier Energy President and CEO Donna Walker.
How will the sale to HalLador affect Merom employees, as well as those who live in Sullivan County?
“It’s a positive development for current Merom employees and Sullivan County as well, preserving more than 100 jobs and a major economic driver for the area,” Walker said. “Several milestones must still be achieved prior to completing the transaction, and we will remain diligent as this process continues to progress.”
Will power from the Merom plant continue to be used for Hoosier Energy’s members’ needs?
Per the agreement, Hoosier will purchase 100% of the plant’s energy and capacity through May 2023, reducing purchases to 22% of energy output and 32% of its capacity beginning in June 2023 and through 2025. The companies’ existing renewable PPA – signed in May 2021 and representing 150 megawatts of solar generation and 50 MW of battery storage – will be retained, with its start date delayed until Merom’s eventual retirement.
How will the sale benefit Hoosier Energy’s members?
“Our 2020 Long Range Resource Plan was the right plan for Hoosier Energy and its members, and it still is,” Walker said. “This agreement creates a win-win dynamic, providing short- and long-term cost savings and continued stability during the transition of our resource portfolio, all while allowing Hoosier to remain on course with the Long Range Resource Plan.”
Other benefits include elimination of millions of dollars in costs for plant decommissioning and long-term grounds maintenance. The new PPA provides additional capacity to Hoosier as well — another important element of the deal.
Will HalLador be purchasing the land surrounding the Merom plant?
Hoosier will retain approximately 5,760 acres of land, which has potential for diverse economic redevelopment.
How will the sale impact consumers?
Hoosier Energy will provide safe, reliable, and sustainable power to its member distribution systems while also stabilizing rates. This positions the members to continue to provide consumers with high-quality service at affordable rates.