Hallador Energy Company (NASDAQ: HNRG) announced that its subsidiary, Hallador Power Company, was selected by the U.S. Department of Energy's Hydrocarbons and Geothermal Energy Office to begin award negotiations for up to $27.2 million in potential federal funding. The funds will support a comprehensive modernization project at the Merom Generating Station in Merom, Indiana, with a total estimated cost of $56.9 million. The initiative aims to upgrade the plant's water management systems to align with future federal Effluent Limitation Guidelines and enhance the delivery of reliable energy to MISO zone 6.

Brent Bilsland, Chairman and Chief Executive Officer, expressed gratitude to the DOE and emphasized the project's role in supporting grid reliability. He noted that modernizing the 1,080 MW rated facility would help power consumers, businesses, and infrastructure in the region for decades. The project focuses on upgrading water handling systems at Merom Units 1 and 2 to reduce environmental impact and achieve zero liquid discharge.

The modernization is expected to deliver several benefits to the region, including protecting local water resources through advanced treatment technologies and stabilizing the regional energy supply for rural and urban customers. Additionally, the project aims to support workforce development and regional economic activity by utilizing domestic sourcing and local contractors, while also contributing to local tax bases that fund schools and public services.

Hallador clarified that it does not anticipate the DOE funding will provide a material benefit to its 2026 financial results. The company also stated it cannot guarantee that any DOE funding will be awarded or received through the negotiations. The Merom Generating Station is a 1,080 MW rated coal-fired power plant that provides baseload power to utilities in southern Indiana, eastern Illinois, and northern Kentucky within the MISO grid.