Hallador Energy Company (HNRG): Business Model Canvas [Dec-2025 Updated]

You're looking at Hallador Energy Company (HNRG) right now, and honestly, it's a fascinating case study in industrial transformation, moving from a pure coal miner to a vertically-integrated power producer (IPP). As an analyst who's seen a few pivots in my day, what stands out is how they are anchoring this shift: running the 1,080 MW Merom Generating Station while locking in value with $921.7 million in contracted forward sales through 2029, all while holding $69.0 million in liquidity as of Q1 2025. This Business Model Canvas lays out exactly how they plan to manage the transition from selling coal to delivering reliable, dispatchable baseload power in the MISO market-it's a complex map, but the destination is clear. Dive below to see the full nine blocks of their strategy, defintely.

Hallador Energy Company (HNRG) - Canvas Business Model: Key Partnerships

You're looking at the critical relationships Hallador Energy Company (HNRG) maintains to keep the Merom Generating Station running and to pivot toward future power generation. These aren't just casual contacts; these are the agreements that secure fuel, grid access, and long-term revenue streams. Honestly, the success of Hallador Power Company hinges on these external players.

MISO (Midcontinent Independent System Operator) for grid access

Hallador Energy Company operates the 1 GW Merom plant within the MISO region of Sullivan County, Indiana, where the capacity is designated as Z6 MISO. MISO is essential because it manages the grid, and Hallador is actively working to expand its footprint within that system. To secure future capacity growth, Hallador submitted an Expedited Resource Addition Study (ERAS) application in November 2025 for a 525 MW natural gas expansion at Merom. This ERAS filing is a key partnership move, aiming for an accelerated path to interconnection compared to the traditional MISO queue.

Utilities and Load-Serving Entities (LSEs) for PPAs

The relationship with Hoosier Energy Rural Electric Cooperative, Inc., the previous owner, established the foundation for current and future power sales. Under the existing Power Purchase Agreement (PPA) from the 2022 acquisition, Hoosier Energy was committed to purchasing 22% of the plant's energy output and 32% of its capacity from June 2023 through 2025. That PPA is set to reset at higher energy prices above $50/MWh starting in 2026. Based on that reset, Hallador Energy Company projects almost $164M in guaranteed power segment revenues (combining energy and capacity payments) from Merom in 2026, calculated at $67.40/MWh. Furthermore, Hallador is in active negotiations with multiple counterparties, including utilities, seeking long-duration (10+ year) agreements for accredited capacity.

The data center developer relationship is a major near-term focus:

• The initial exclusivity period with a leading global data center developer, which ran through early June 2025, involved cumulative payments to Hallador Power Company of up to $5 million.
• This potential deal was structured to support a 620 MW data center development.
• The non-binding term sheet suggested a supply commitment for 10+ years, with the offtaker receiving a "majority of the output of the plant" (the 1080 MW Merom Generating Station).

Here's a quick look at Hallador Energy Company's contracted sales position as of late 2025:

Rail and logistics providers for coal transport

Hallador's coal mining business, Sunrise Coal, LLC, is a key partner as the primary fuel supplier for the Merom power plant. The operational plan relies on these logistics to move fuel efficiently. For fiscal year 2025, Hallador's goal is to produce approximately 3.7 million tons of fuel. Merom is expected to consume about 2.3 million tons of coal from Sunrise and third parties in FY 2025. To be fair, logistics also involve selling excess production; Sunrise is expected to sell an additional ~2.5 million tons of coal to third parties in 2025. For context, Sunrise sold 3.9 million tons of coal in FY 2024.

Equipment and service vendors for Merom plant maintenance

The physical operation of the 1080 MW Merom Generating Station requires ongoing support from equipment and service vendors. You saw the impact of this partnership structure in Q2 2025 when a scheduled outage occurred, which was part of planned maintenance. The company's capital expenditures year-to-date through Q3 2025 totaled $44.3 million. This spending covers necessary upkeep and investments, like the completed studies for dual-fuel conversion with gas, which could further enhance the plant's economic life. The operational resilience of the platform, even with the outage, helped drive Q2 2025 revenue up 10% year-over-year to $102.9 million.

Key operational metrics related to plant activity:

• Merom Generating Station capacity: 1 GW or 1080 MW.
• Q3 2025 power delivered: 1.6 million MWh.
• Q3 2025 average power price: $49.29/MWh.
• Total liquidity at September 30, 2025: $46.4 million.

Finance: draft 13-week cash view by Friday.

Hallador Energy Company (HNRG) - Canvas Business Model: Key Activities

You're looking at the core engine of Hallador Energy Company, the day-to-day work that turns fuel into revenue as of late 2025. It's a vertically-integrated setup, meaning they manage the fuel supply right up to selling the electrons into the grid. Here's the quick math on what they are actively doing.

Operating the 1,080 MW Merom Generating Station

Hallador Energy Company's primary power generation activity centers on the Merom Generating Station, which has a capacity of 1,080 MW, often referred to as its One-Gigawatt (GW) asset in the MISO Zone 6 area. The activity here is keeping this dispatchable coal-fired plant running efficiently to meet grid needs, especially as reliable baseload power becomes scarce.

The operational output shows recent performance:

• Produced 4.2 million MWh in 2024.
• In the third quarter of 2025, the station delivered 1.6 million MWh.
• The average sales price achieved for that Q3 2025 power was $49.29 per MWh.

This facility is key to their strategy, as they expect it to consume approximately ~2.3 million tons of coal from Sunrise Coal and third parties in Fiscal Year 2025.

Coal mining and production at the Oaktown complex

The Sunrise Coal, LLC subsidiary manages the Oaktown 1 underground mining complex, which is the primary fuel supplier for Merom and also sells to external customers. The stated productive capacity for the Oaktown complex is 8 mtpa (million tons per annum).

The 2025 production targets and actuals show a focus on meeting internal and external demand:

Coal sales revenue for the third quarter of 2025 reached $51.3 million, marking a 42% year-over-year increase. The activity involves using room and pillar mining methods and leveraging rail connections serviced by CSX Railroad and Indiana Railroad for shipments.

Energy and capacity sales/trading in the MISO market

Hallador Energy Company actively trades the electricity and capacity generated at Merom within the MISO market, specifically in Zone 6. This activity is driving significant top-line growth, with Q3 2025 total operating revenue hitting $146.8 million, a 40% increase year-over-year. Electric sales alone in Q3 2025 were $93.2 million, up 29% year-over-year.

The forward sales book provides visibility into future trading activity:

• Forward energy and capacity sales position as of September 30, 2025: $571.7 million through 2029.
• Total forward sales book (including coal) as of September 30, 2025: Approximately $1.3 billion.

The company generated $23.9 million in Net Income for Q3 2025, with Adjusted EBITDA reaching $24.9 million.

Developing the 525 MW natural gas expansion (ERAS application)

A major current activity is the strategic development to diversify fuel sources and increase dispatchable capacity. In early November 2025, Hallador Energy Company filed an application with MISO under the Expedited Resource Addition Study (ERAS) program. This application seeks to add 525 MW of natural gas generation capacity at the Merom site.

This development activity has clear targets:

• The proposed addition represents roughly 50% additional generating capacity to the existing fleet.
• The targeted on-line date for this new gas generation is the fourth quarter of 2028.

This move is in response to accelerating demand for accredited capacity from entities like data centers.

Securing long-term Power Purchase Agreements (PPAs)

A critical ongoing activity is locking in long-term revenue streams through PPAs, often with data center developers or utilities, seeking long-duration agreements of a decade or more.

Recent contract activity includes:

• Total forward energy, capacity, and coal sales to third-party customers as of September 30, 2025, stood at $921.7 million through 2029.
• Hallador executed a $20.0 million prepaid forward sales contract during Q3 2025, with deliveries scheduled between January 2027 and May 2027.
• The largest existing PPA contract is set for a price step-up of more than $20 per megawatt hour in 2026 compared to 2025, covering approximately 1.6 million megawatt hours.

The company generated $23.2 million in operating cash flow in Q3 2025, partly supported by these forward sales, and used this to partially fund capital expenditures of $19.5 million for the quarter. Finance: draft 13-week cash view by Friday.

Hallador Energy Company (HNRG) - Canvas Business Model: Key Resources

You're looking at the core assets Hallador Energy Company (HNRG) relies on to execute its Independent Power Producer (IPP) strategy. These aren't just line items; they are the physical and financial foundations supporting their pivot away from pure coal production.

The primary physical asset is the Merom Generating Station, which you noted has a capacity of 1,080 MW. To be fair, the latest reports refer to it as a one Gigawatt (GW) facility, but the key is the grid interconnection rights within the MISO footprint that come with it. This dispatchable generation capability is what management believes is gaining value as other non-dispatchable resources increase on the grid. Furthermore, Hallador Energy Company is actively seeking to enhance this resource, filing an application in early November 2025 to expand generation capabilities at the Merom site by 525 MWs via MISO's Expedited Resource Addition Study (ERAS) program, targeting a fourth quarter of 2028 on-line date.

The second major physical resource is the fuel source, managed through the Sunrise Coal, LLC subsidiary. While the company took a significant non-cash write-down of approximately $215 million on Sunrise Coal in the fourth quarter of 2024 due to shifting away from higher-cost reserves, the remaining operation is optimized to support internal needs and external sales. The operational focus is clearly on cost management, as evidenced by the Q1 2025 production of approximately 1.0 million tons of coal.

Here's a quick look at how these physical assets translated into operational statistics for the latest reported quarter, Q3 2025:

Financially, Hallador Energy Company has built a strong wall of contracted revenue visibility. As of the third quarter of 2025, the company had total forward energy, capacity, and coal sales to third-party customers amounting to $921.7 million through 2029. This forward book provides substantial revenue certainty, which is critical for an IPP model. For context, at the end of Q1 2025, the total forward book was reported as $1.1 billion through 2029.

Liquidity remains a key resource for flexibility, especially when pursuing growth. As of the first quarter of 2025, Hallador Energy Company reported total liquidity of $69.0 million. This improved position followed significant debt reduction, with total bank debt falling to $23.0 million at March 31, 2025, down from $44.0 million at the end of 2024.

Finally, the human capital is centered around the leadership driving the strategy. You have an experienced management team, led by President and CEO Brent Bilsland, explicitly focused on the IPP strategy. This focus is translating into tangible results, with electric sales comprising 73% of total revenue in Q1 2025.

The core elements supporting the business model are:

• Merom Generating Station: 1,080 MW capacity and grid rights.
• Sunrise Coal: Optimized, lower-cost reserves supporting internal fuel needs.
• Contracted Sales: $921.7 million in third-party forward sales through 2029 (as of Q3 2025).
• Liquidity: $69.0 million as of March 31, 2025.
• Management Focus: Clear strategic shift to vertically integrated IPP model.

Finance: review the impact of the proposed 525 MW expansion on the current $921.7 million forward book by next Tuesday.

Hallador Energy Company (HNRG) - Canvas Business Model: Value Propositions

You're looking at how Hallador Energy Company delivers unique value to its customers in late 2025. The core is reliable, always-on power from their One Gigawatt (GW) Merom Generating Station.

Reliable, dispatchable baseload power (Always On)

Hallador Energy Company provides power when you need it, which is critical as intermittent renewables grow and the MISO area faces a NERC-rated 'High Risk' of shortfalls from 2024 to 2028. The Merom plant operates as a dispatchable coal-fired facility, fully supported by MISO for its essential role. In the third quarter of 2025, Hallador Power delivered 1.6 million megawatt-hours (MWh), up from 1.2 million MWh in the third quarter of 2024, demonstrating its ability to increase dispatch when needed. The average sales price for that Q3 2025 power was $49.29 per megawatt-hour.

Vertically-integrated, low-cost power generation (self-supplied fuel)

The vertical integration through Sunrise Coal, LLC, is a key cost advantage, allowing Hallador Power Company to convert fuel into higher value wholesale electricity. For fiscal year 2025, the expectation is that the Merom Power Plant will consume approximately 2.3 million tons of coal sourced from Sunrise and third parties. Sunrise Coal itself is targeting production of approximately 3.7 million tons of fuel in 2025, with an expected ~2.5 million tons to be sold to third parties. This self-supply chain helps control operating expenses.

Fuel flexibility (coal, evaluating natural gas co-firing)

While the primary fuel is coal from Sunrise Coal, Hallador Energy Company is actively assessing the addition of natural gas co-firing capabilities at Merom. This evaluation is intended to provide fuel flexibility, letting the company capitalize on the best fuel cost scenario and better control operating expenses, especially given that Q3 2025 revenue benefited from stronger natural gas prices.

Accelerated path to new capacity via MISO ERAS program

Hallador Energy Company is pursuing a significant organic growth path by filing an application in early November 2025 under MISO's Expedited Resource Addition Study (ERAS) program. This filing seeks to add 525 MW of new gas generation at the Merom site, which represents unlocking approximately 50% of additional generation capacity. The ERAS program offers a faster, more predictable path to interconnection versus the traditional MISO queue, with a targeted on-line date in the fourth quarter of 2028.

Long-term price stability through contracted PPAs

The company secures long-term revenue visibility by entering into Power Purchase Agreements (PPAs) with counterparties like utilities and data center developers, often seeking agreements 10+ years in length. As of September 30, 2025, Hallador had a total forward energy, capacity, and coal sales book to third-party customers valued at $921.7 million through 2029. The contracted power revenue component (energy + capacity) alone stood at $571.7 million at that quarter-end. This forward book shows increasing realized prices, with contracted energy prices escalating from $37.20 /MWh in 2025 to $54.66 /MWh in 2027.

Here's a quick look at the Q3 2025 operational and forward book metrics:

The company is also focused on securing its financial footing to support this growth, as evidenced by its balance sheet management:

• Total bank debt was $44.0 million at September 30, 2025.
• Total liquidity stood at $46.4 million at September 30, 2025.
• Capital expenditures year-to-date were $44.3 million as of Q3 2025.
• A $20.0 million prepaid forward sales contract was executed during the quarter.

What this estimate hides is that the Q3 performance was described as exceptional, with management indicating Q4 might be more typical unless extreme cold boosts demand.

Hallador Energy Company (HNRG) - Canvas Business Model: Customer Relationships

You're looking at how Hallador Energy Company (HNRG) manages its customer interactions as of late 2025, which is heavily weighted toward securing long-term power contracts while still managing legacy coal sales. The core strategy is clearly the pivot to being a vertically integrated Independent Power Producer (IPP) based in Terre Haute, Indiana.

Direct, high-touch negotiation for long-term PPAs (10+ years)

The company is actively engaged in high-touch negotiations for long-term Power Purchase Agreements (PPAs), often seeking terms of 10+ years, driven by strong interest from load-serving entities and data center developers. This is the central focus for the Hallador Power Company, LLC segment, which operates the one Gigawatt (GW) Merom Generating Station. Management noted in August 2025 that they were evaluating multiple offers from utilities and data center developers following the conclusion of an exclusivity period in May 2025. The narrative stresses the structural scarcity of dispatchable capacity in the MISO region, making reliable power valuable.

The company's forward-looking contracted position shows the tangible results of these efforts, though the total book value has been decreasing as deliveries are made and new, shorter-term deals are signed:

Specific contract details show future price step-ups, which is a key part of the value proposition for long-term holders. For instance, the largest PPA contract is set to increase by more than $20 per megawatt hour in 2026 compared to 2025 volumes, covering approximately 1.6 million megawatt hours. Furthermore, a new 5-month, $20.0 million prepaid forward sales contract was signed in Q3 2025 for delivery between January 2027 and May 2027.

Transactional sales for spot market energy and capacity

While long-term deals are the goal, a significant portion of revenue still comes from current energy and capacity sales, reflecting transactional market activity. Electric sales were 73% of total revenue in Q1 2025, totaling $85.9 million out of $117.8 million. This segment continues to benefit from strong pricing, as evidenced by Q3 2025 electric sales reaching $93.2 million, a 29% year-over-year increase. The MISO capacity auction provided a strong indicator of transactional value, with accredited capacity selling for prices exceeding $600 per MW Day during the peak summer season.

Hallador Energy Company has a substantial portion of its near-term output already committed, which reduces exposure to pure spot pricing volatility:

• Contracted approximately 3 million megawatt-hours (MWh) for the balance of 2025 at an average price of $37.20/MWh.
• Contracted 3.4 million MWh for 2026 at an average price of $44.43/MWh.

Dedicated sales team for third-party coal customers

The Sunrise Coal, LLC division maintains a dedicated focus on selling fuel to external customers, even as production is strategically aligned with the Merom Power Plant's needs. The company expects Sunrise to sell an additional ~2.5 million tons of coal to third parties in FY 2025, against a total production goal of approximately 3.7 million tons for the year. Coal sales to third parties in Q3 2025 were $51.3 million. This is part of a broader strategy where the Merom Power Plant is expected to consume ~2.3 million tons of coal from Sunrise and third parties in FY 2025.

Investor relations focused on the IPP transition narrative

Investor relations communications are tightly focused on framing Hallador Energy Company as a successful, vertically integrated IPP, leveraging the energy transition. The latest Investor Presentation was released in November 2025. The key narrative points used to engage this customer segment (investors) include:

• Highlighting the strategic shift, noting electric sales comprised 73% of revenue in Q1 2025.
• Emphasizing the goal to capture expanding margins from the growing demand for reliable electricity.
• Detailing the submission of an Expedited Resource Addition Study (ERAS) application in November 2025 for a 525 MW natural gas expansion at Merom, signaling diversification and growth potential.

Finance: draft 13-week cash view by Friday.

Hallador Energy Company (HNRG) - Canvas Business Model: Channels

The channels Hallador Energy Company (HNRG) uses to reach its customers and deliver its value proposition are multifaceted, spanning regulated wholesale markets, direct commercial negotiations, and physical commodity movements.

MISO wholesale electricity market (energy and capacity auctions)

Hallador Power Company, LLC channels its generated electricity and capacity directly into the Midcontinent Independent System Operator (MISO) wholesale market, specifically operating within MISO Zone 6, which covers Indiana and parts of western Kentucky. Hallador Power operates its one Gigawatt (GW) Merom Generating Station to serve this market.

The performance through the first three quarters of 2025 shows strong revenue generation from this channel:

The company maintains a significant forward-sold position to secure future revenue from this channel, which is critical given the structural scarcity of dispatchable capacity in MISO.

• Forward energy and capacity sales position as of September 30, 2025: $571.7 million.
• Forward energy and capacity sales position as of March 31, 2025: $630.4 million.
• Approximately 3 million MWh contracted for the balance of 2025 at an average price of $37.20/MWh.
• Approximately 3.4 million MWh contracted for 2026 at an average price of $44.43/MWh.
• MISO capacity auction prices exceeded $600 per MW Day during the highest demand summer season.

Direct sales and business development for PPAs

Hallador Energy is actively pursuing direct, long-term Power Purchase Agreements (PPAs) with counterparties like utilities and data center developers to move sales up the value chain. This is a key focus for margin expansion.

Commercial activity in 2025 included:

• Active negotiations with multiple counterparties for long-term PPAs.
• Concluding exclusive discussions with a major data center developer in May 2025.
• Announcing a $35 million prepaid firm energy sale with deliveries scheduled throughout 2025 and 2026.
• The largest existing PPA contract is set for a price increase of more than $20 per megawatt hour in 2026 compared to 2025, on expected volumes of approximately 1.6 million megawatt hours.
• The company executed a 5-month, $20.0 million prepaid forward sales contract in Q3 2025, scheduled for delivery between January 2027 and May 2027.

Rail and truck shipments for third-party coal sales

Sunrise Coal, LLC channels its product through rail and truck shipments to both the internal Merom Power Plant and external third-party customers. The Coal Operations segment generated $51.3 million in third-party coal sales revenue in Q3 2025.

The expected physical movement and sales targets for 2025 are:

Third-party coal sales customers are located in Indiana, as well as Florida, North Carolina, Alabama, and Georgia.

Investor presentations and financial filings

The final channel involves communicating the business model, performance, and outlook to the investment community through official disclosures. These filings and presentations are the mechanism for conveying the value proposition to capital providers.

Key documents and figures related to this channel as of late 2025 include:

• Latest Investor Presentation released in November 2025.
• Q3 2025 financial results reported on November 10, 2025.
• Total forward energy, capacity and coal sales to 3rd party customers as of September 30, 2025: $921.7 million through 2029.
• Total forward sales book as of September 30, 2025: approximately $1.3 billion.
• Total forward sales book as of March 31, 2025: approximately $1.5 billion (including fuel and intercompany sales).

Hallador Energy Company (HNRG) - Canvas Business Model: Customer Segments

Utilities and Load-Serving Entities (LSEs) in the MISO region

• Electric Operations segment operates in MISO Zone 6, covering Indiana and parts of western Kentucky.
• Electric sales represented 73% of total revenue in Q1 2025, amounting to $85.9 million.
• Q3 2025 electric sales reached $93.2 million.
• Hallador Power submitted an application to MISO's Expedited Resource Addition Study program to add 525 MW of gas generation at the Merom site, targeting online in Q4 2028.

High-demand industrial users, specifically data center developers

• A proposed datacenter project involves 620MW capacity.
• The potential agreement was for a term of 10+ years.
• An exclusivity agreement, which concluded in May 2025, included cumulative payments up to $5 million.
• A potential PPA contract could see an increase of more than $20 per megawatt hour in 2026 compared to 2025 on expected volumes of approximately 1.6 million megawatt hours.

Existing PPA counterparty, Hoosier Energy

• Hoosier Energy's purchase commitment reduced to 22% of energy output and 32% of capacity beginning in June 2023 and through 2025.
• The original transaction involved a 1-Gigawatt Merom Generating Station.
• An existing renewable PPA included 150 MW of solar generation and 50 MW of battery storage.

Third-party industrial and utility coal customers

Revenue Mix Snapshot (Q1 2025)

• Electric Sales: $85.9 million (73% of revenue).
• Coal Sales: $30.2 million.
• Other Revenue: $1.7 million.

Hallador Energy Company (HNRG) - Canvas Business Model: Cost Structure

You're looking at the core expenditures that keep Hallador Energy Company running, which is a mix of power generation, coal mining, and significant long-term liabilities. Honestly, understanding these costs is key to seeing where the cash is going before the revenue hits.

The Capital Expenditures (CapEx) are a clear, measurable outflow. For the year-to-date through the third quarter of 2025, Hallador Energy reported total CapEx of $44.3 million. Just for the third quarter of 2025, the capital spending was $19.5 million.

Debt service is a fixed commitment you need to track. You noted that the bank debt service was reduced to $23.0 million in the first quarter of 2025. By the end of the third quarter of 2025, the total bank debt stood at $44.0 million.

The Asset Retirement Obligations (ARO) represent future decommissioning costs for the mines and the Merom plant. The balance sheet data shows the total ARO liability as of the third quarter of 2025 was reported as $16,268 (compared to $14,957 at the end of the third quarter of 2024). Separately, the accretion expense related to ARO for the first three months of 2025 totaled $4.3 million.

For the operational side, fuel costs are intertwined with the Sunrise Coal Division's output and third-party purchases, which Hallador Energy seeks to optimize. While the direct fuel cost isn't explicitly broken out for Merom, the coal sales revenue from the third party was $51.3 million in Q3 2025. For Operating and Maintenance (O&M) costs, we can look at the first quarter of 2025, where total Other operating and maintenance costs were $28.389 million (or $28,389 thousand).

Here's a quick look at some of the key financial figures related to costs and liabilities as of late 2025 data points:

The company's operational focus is clear:

• Optimize fuel costs at Merom.
• Maintain adequate fuel supply for winter dispatch.
• Continue supplementing internal coal production with low-cost third-party purchases.
• Manage the ARO liability for long-lived assets.

The cost structure is heavily influenced by the vertical integration, where internal coal production offsets some third-party fuel needs, but O&M for the Merom plant remains a substantial, ongoing expense.

Hallador Energy Company (HNRG) - Canvas Business Model: Revenue Streams

You're looking at the core ways Hallador Energy Company brings in cash, and as of late 2025, it's heavily weighted toward power generation and coal sales, especially following a strong summer dispatch period.

For the third quarter ended September 30, 2025, Hallador Energy Company posted total operating revenue of $146.8 million, which was a 40% increase year-over-year. This revenue is split between two main operational segments: electric sales from Merom and third-party coal sales from Sunrise Coal.

Electric sales, which include both energy and capacity components from the Merom generating station, totaled $93.2 million in Q3 2025. That's a 29% rise compared to the same period last year. To give you a sense of the underlying volume and pricing, Hallador Power delivered 1.6 million megawatt-hours during Q3 2025 at an average sales price of $49.29 per megawatt-hour.

Third-party coal sales were also strong, bringing in $51.3 million for the quarter. This segment saw a 62% increase year-over-year, showing that optimized fuel production and increased shipments are definitely paying off for Hallador Energy Company.

Here's a quick look at the Q3 2025 revenue breakdown:

Capacity payments from the MISO market are a key component embedded within those electric sales, especially as the market continues to price accredited capacity at higher levels. You should know that capacity revenues at Merom were roughly $65M in 2024, showing the importance of this revenue stream even before the full impact of 2025 pricing.

Hallador Energy Company also uses forward sales to lock in future revenue and boost immediate liquidity. During Q3 2025, the company executed a 5-month, $20.0 million prepaid forward sales contract scheduled for delivery between January 2027 and May 2027. This type of transaction helps shore up the balance sheet, as evidenced by the $23.2 million in operating cash flow generated in the quarter.

The company maintains a significant book of contracted future sales, which provides revenue visibility. You can see the scale of their forward positioning:

• Total forward energy, capacity and coal sales to 3rd party customers: $921.7 million through 2029.
• Forward energy and capacity sales position as of September 30, 2025: $571.7 million.
• Total forward sales book (including intercompany sales to Merom): approximately $1.3 billion as of September 30, 2025.

Also, keep in mind that after 2029, all of Merom's electricity sales are expected to get market prices, which management sees as being in a healthy contango (upward trajectory).

Finance: draft 13-week cash view by Friday.