INSIDE INDIANA BUSINESS - Terre Haute-based Hallador Energy Co. says work is progressing on its planned natural gas generation project at the Merom Generating Station in Sullivan County.

In the company’s quarterly earnings report, CEO Brent Bilsland said the project, now dubbed Turtle Creek, is expected to cost less than initially estimated.

Hallador is planning to expand its electric generation capacity with a new, natural gas-fired combustion turbine project at the Merom station. The company is seeking approval through the Midcontinent Independent System Operator’s Expedited Resource Addition Study, or ERAS, program.

In June, the company announced a $450 million agreement with Australia-based Energy World Corp. for the acquisition and delivery of equipment that will be used in the project. The agreement includes approximately 460 megawatts of Siemens gas turbines, generators, a stream turbine and ancillary equipment.

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Bilsland said members of his team recently completed a site visit to get an update on the disassembly of the equipment before it is delivered to Indiana in September, noting that the company is “pleased with both the progress of the disassembly efforts and the condition of the turbine equipment.”

As the process continues, Bilsland said the economics of the project have become more compelling.

“We now expect total project cost to be below $800 million, or approximately $1,700/kW — which we believe is a significant cost advantage relative to competing new-build capacity — while moving forward our targeted commercial operation timeframe to the second half of 2028, a timeline we believe is materially ahead of comparable projects,” he said.

Hallador said it expects to receive the results of the ERAS process later this month, and the company is finalizing the construction scope and evaluating the capital structure for the project.