Our utility client owns and operates coal-fired generating stations in the Midwestern U.S. Following the decision to retire certain coal-fired generating assets, the company’s decommissioning team was faced with the challenge of determining how to realize each retired site’s highest and best use. The goal was to find the best use for each site specific to its surrounding community while protecting the interests of the company’s ratepayers and ensuring the process would withstand regulatory scrutiny.
Our team began by performing a detailed assessment of each site slated for retirement which considered several factors, including: 1) the projected retirement schedule; 2) site specific attributes; 3) the interests of neighbors and businesses surrounding the site; 4) end-use efforts conducted to date; and 5) the interests and needs of various stakeholders. Working with our client, we developed screening tools to identify, evaluate and refine the potential end-uses for each site. This work established a foundation of analysis to inform our client through the decommissioning and redevelopment of its various generating sites.
Based on our analysis and assessment, the client decided to take one particular generating site to market. Working collaboratively with the client, we developed a marketing approach for the asset, which included preparing a site-specific solicitation of interest (“SOI”). The process for disseminating the SOI included developing and sending the SOI to a targeted group of interested parties based on a screening of our extensive marketing database, developing a press release for the asset, and compiling a complete list of documents that would be made available to interested parties.
Following this outreach, we managed the site’s sale process, which included reviewing the responses to the SOI, reaching out to those groups that responded and inviting potential bidders to do additional due diligence, and conducting site tours. Following the site tours, we developed an indicative bid letter requesting bidders to provide indicative proposals for the site and worked with the client to evaluate the indicative proposals.
Our client received numerous indicative bids for the asset, and we worked with the client to review and evaluate these bids. Upon completion of the evaluation, we developed a short list of bidders with whom to execute term sheets and conduct negotiations to ultimately achieve a sale of the asset that meets the goals of the ratepayers, the regulators, and the client.
