The announcement this week that Hallador Energy, through a new subsidiary Hallador Power Company LLC, will acquire the Merom Generating Station in Sullivan County from Hoosier Energy is good news, some county and city officials say.
Hallador will be able to operate the power plant at a much lower cost, as it can supply its own coal. Hallador owns Sunrise Coal LLC, which operates two coal mines in Knox County and one mine — Ace in the Hole — in Clay 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,” Hoosier President and CEO Donna Walker said in a news release.
Sullivan County Commissioner John Waterman, a strong advocate for coal, said keeping the one-gigawatt coal-fired Merom Generating Station in Sullivan County operating “is a triple win for the county and taxpayers.”
“We get to keep the jobs in the power plant, and jobs stay in coal mines, then also the tax base for the county,” Waterman said.
Hoosier Energy had slated the power plant for retirement in May 2023, however, Waterman said he thinks coal is a cheaper energy source and provides electricity at lower monthly rates to Hoosiers.
“With coal, it is a lot cheaper power than alternatives. There is not enough acreage on that site to make a difference with the solar input. We would have to have half the state covered in solar power to make up the difference,” Waterman said.
Waterman said he thinks “without subsidies paid in by the federal government, solar would not exist if they had to function on their own, same way with wind,” he said. “With all the things done with coal, taking the sulfur out and heavy metals and scrubbers, it is more efficient and safer than it used to be.”
Yet alternative solar power remains a viable option for the site. An existing power purchase agreement between the companies — which includes 150 megawatts of solar generation and 50 megawatts of battery storage will be retained, with its start date delayed until Merom’s eventual retirement.
Hoosier will retain approximately 5,760 acres of land, which has potential for economic redevelopment, potentially including solar power.
“… Although still early in the process, with several milestones yet to be completed (such as regulatory approvals), the specific strategy and timeline for Hoosier’s acreage will continue to be discussed with high regard being placed on its potential for diverse redevelopment,” said Curt J. Durnil, spokesman for Hoosier Energy.
Waterman said the power plant is among the top 10 taxpayers in Sullivan County for both real and personal property taxes.
“It would be a real significant loss for the county if we had lost the power plant,” he said. Sullivan County Commissioner Ray McCammon agrees, adding the Hallador acquisition “gives us a couple more years of them being in business, more than we had thought, with employees having a job and hopefully taxes still coming in as they are now. We really have not gotten much more information,” he said.
McCammon said there are solar projects that Hallador and Hoosier Energy can do in the future and there are other solar projects proposed in the county. One involves a $180 million solar farm for Duke Energy Renewables Solar LLC, which will be in southern Vigo County and northern Sullivan County. About 60 percent of the project will be located in Vigo County, where it has already received approval and tax abatement.
McCammon said the Duke Energy project has not gone through approvals before Sullivan County officials yet.
On the Merom Generation Station, McCammon said he would like to “see more equipment that will make sure that we have sustainable energy here… like a gas-fired power plant.”
Clint Lamb, mayor the city of Sullivan, said he thinks the acquisition shows the continued need to diversify the economy of both the county and city. Lamb said coal has been a big part of the community, adding his great father was a coal miner.
“Obviously (keeping the Merom power plant open) will have a bigger impact on the county government than the city,” Lamb said, adding both the county and city are interdependent.
“Anytime you lose a major employer and a tax base, it will trickle down and could hinder the city. However, I think this just solidifies and continues to prove our administration’s vision on creating a resilient sustainable community. We can’t be dependent on one power plant,” he said.
“While I celebrate with the folks at Hallador of their acquisition of the plant and it is promising they want to extend that for several years… at the same time we must continue to plan and we can’t have all of our coal in one bucket, so to speak,” Lamb said.
Lamb said the county and city must work at other economic development opportunities. The key to economic improvement is population, he said. People are needed and growth efforts must be done regionally.
Lamb said he thinks renewable energy will continue to play an important role in the future, saying “it is not a political issue, but an economic one and not an American issue but an international issue.” It all comes down to population growth and retention, he said. Hallador Energy CEO Brent Bilsland, in a company statement, said the acquisition will retain power plant workers, but will also enable the company to secure “demand for up to half of its coal production for years to come.
“With current and anticipated market power and fuel prices, we’re confident this investment will provide value to our shareholders. In addition, the parties will be keeping their existing solar/ battery storage power purchase agreement in place providing a path for Merom’s transition to renewable energy when the coal plant is eventually retired,” Bilsland said.
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