Our utility client owns and operates coal-fired generating stations in the Midwestern U.S. After deciding to retire certain coal-fired generating assets, the company’s decommissioning team faced the challenge of determining the highest and best use for each retired site. The objective was to identify the best use for each site, considering the surrounding community, while also protecting the interests of the company’s ratepayers and ensuring the process would withstand regulatory scrutiny.
To begin, our team conducted a comprehensive assessment of each site scheduled for retirement. This assessment considered several factors, including: 1) the projected retirement schedule; 2) site specific attributes; 3) the interests of neighbors and businesses in the vicinity; 4) end-use efforts conducted to date; and 5) the interests and needs of various stakeholders. Collaborating with our client, we developed screening tools to identify, evaluate, and refine the potential end-uses for each site. This groundwork established an analytical foundation to guide our client through the decommissioning and redevelopment of their various generating sites.
Based on our analysis, the client decided to bring one particular generating site to market. Working closely with the client, we developed a marketing approach for the asset, which included preparing a site-specific solicitation of interest (SOI). The outreach process involved sending the SOI to a targeted group of interested parties identified through our extensive marketing database, developing a press release for the asset, and compiling a comprehensive list of documents that would be made available to interested parties.
Following this outreach, we managed the site’s sale process, which included reviewing responses to the SOI, reaching out to those who expressed interest, inviting potential bidders to 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 these proposals.
Our client received numerous indicative bids for the asset, and we collaborated with the client to review and evaluate these bids. Upon completing 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 aligned with the goals of the ratepayers, the regulators, and the client.
