Indiana Coal Company Secures $ 10 Million Coronavirus Loan
The politically linked parent company of Sunrise Coal, Indiana’s second-largest coal company, will receive $ 10 million as part of a federal coronavirus relief program for small businesses.
Based in Terre Haute, Hallador Energy announced last week that he would use the funds to pay for two months’ pay and “other covered expenses”. A Hallador spokeswoman did not respond to a request for comment.
Thousands of small businesses across Indiana have closed their doors in response to the governor’s stay-at-home order. Owners of gyms, restaurants, lounges and more have seen their incomes evaporate. Numerous expressed their frustration process and large companies receive funding as they wait for the help they desperately need.
Meanwhile, Hallador – whose political ties extend beyond Indiana to the White House – announced he received the loan just a day before the program ran dry. Hallador has fought to keep coal alive in Indiana, even hiring former EPA chief Scott Pruitt to lobby the state. And a former business executive now works in the US Department of Energy.
Is Hallador a small business?
Hallador is one of several large publicly traded companies to receive a portion of the $ 349 billion in low-interest emergency loans intended to keep small businesses afloat amid stay-at-home orders.
At least 94 publicly traded companies or their subsidiaries will receive $ 365 million under the program, according to an opinion financial statements by The Associated Press.
Congress passed the Paycheck Protection Program as part of its $ 2 trillion Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, designed to boost a U.S. economy that slowed down as a result of the coronavirus.
Business closures and limited industrial activity will continue to reduce demand for electricity, especially that produced by coal-fired power plants, according to the U.S. Energy Information Administration. The agency predicts that coal production will decline by 20% in 2020, compared to a 1% increase in natural gas production.
But many of the cuts and financial pressures on the coal industry were apparent long before the coronavirus crisis. Coal was already facing competition from cheaper natural gas and renewables. The amount of electricity produced by coal has decreased by 30% over the past decade, according to the EIA – although 70% of Indiana’s electricity was still produced from coal in 2018.
Hallador Energy was not immune to the abandonment of coal. At the end of 2019, it operated four mines in southwest Indiana and had 915 full-time employees and temporary miners, according to SEC documents. But in January, the company laid off 90 workers and closed its Carlisle mine in Sullivan County, citing weak market conditions and a glut of domestic coal production.
a S&P Global Report released in February found that in the first three quarters of 2019, more than half of the coal delivered by Hallador went to factories that are expected to retire by 2025 or earlier.
“Do they really fit the description of a small business? Asked Kerwin Olson, executive director of the Citizens Action Coalition. His organization defends the interests of consumers in public service procedures. He applied for a PPP loan for his small nonprofit organization but got no response.
“It’s just another slap in the face,” Olson said. The well-connected people, the people who give to the campaigns, get help, he said, “while moms and dads continue to struggle.”
Hallador, although not a giant company, is far from being a family business. It has a market valuation of just over $ 20 million, according to market data for Tuesday. And in 2018, it was the 18th largest coal producer in the country, by weight, that year: it mined 7.6 million tonnes.
Hallador’s reported 768 employees would generally disqualify him from PPP loans, which are intended for companies with 500 or fewer employees. There are, however, some exceptions where several sectors, including coal mines, can have up to 1,250 or 1,500 employees and still be considered a small business by the federal government.
“If they’re losing sales and people are being made redundant, then I would say they have a legitimate reason to get the money,” said David Schlissel, director of resource planning analysis at the company. ‘Institute for Energy Economics and Financial Analysis. “It should go to the miners and their families. If it doesn’t go to the miners and they haven’t been closed, then they shouldn’t be getting the money.”
It is not known whether the company had to shut down production or lay off workers in the wake of the coronavirus pandemic. Spokespersons for Hallador did not respond to IndyStar’s questions. In an SEC file, the company said it expected to sell less coal in 2020 due to the pandemic – 6.5 million tonnes, up from 6.7 million.
Unlike the thousands of Hoosier businesses that have been forced to close their doors, Hallador and the utilities to which it sells coal are considered “essential” by order of the governor.
Links to the Trump administration
Hallador and its subsidiary Sunrise Coal, as well as the Coal Lobby, havemounted a strong front against any movement that threatened the coal. This includes intervening in tariff cases before the Indiana Utilities Regulatory Commission when utilities propose to move away from coal.
For lobbying help, Hallador turned to Pruitt, the beleaguered former EPA administrator who called efforts to tackle climate change a “war on coal.”
During Indiana’s 2019 legislative session, Hallador retained his services to lobby for a moratorium on new power generation projects in the state. The only new projects considered in Indiana were natural gas or renewables, respectively, from utilities such as Vectren and NIPSCO.
Pruitt’s lobbying is an “attempt to protect Indiana taxpayers from rate hikes by Vectren and NIPSCO,” Rebecca Palumbo, Hallador’s vice president of general affairs, said at the time in a statement. declaration to IndyStar.
Although that effort ultimately failed, Hallador and Sunrise brought Pruitt back for the 2020 session. This time he was lobbying for legislation this would make it more difficult to decommission coal-fired power plants.
Sunrise, along with another Oklahoma-based coal company that operates in the state, made campaign contributions to the bill’s mover, other lawmakers who would help push the legislation through, and Gov. Eric Holcomb. Last year.
Although the bill was watered down slightly from its original state, it was eventually passed and signed by the governor in March. The legislation also provided for additional resources and training to help workers in the coal industry who lose their jobs.
Sunrise and Hallador also have links at the federal level.
Suzanne Jaworowski was previously Director of Communications and Government Affairs for Hallador and its subsidiary. She then rose to the position of Indiana state campaign manager for Trump’s presidential race in 2016, before becoming a senior advisor in the Department of Energy’s office of nuclear energy.
Emily Hopkins is a data reporter for the IndyStar investigative team. Contact them at 317-444-6409 or [email protected].
Call IndyStar reporter Sarah Bowman at 317-444-6129 or email [email protected] Follow her on Twitter and Facebook: @IndyStarSarah.
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IndyStar’s environmental reporting project is made possible by the generous support of the non-profit Nina Mason Pulliam Charitable Trust.