023-3 Wyo. Code R. §§ 3-25 - Application to Sell an Otherwise Retiring Coal Fired Electric Generation Facility; Filing Requirements; Retention of an Independent Evaluator; Process and Procedure; Determination of Avoided Cost; Evaluation of Bids from Prospective Purchasers

(a) If a utility intends to retire a Coal Fired Electric Generation Facility and seeks approval of the process required to demonstrate a good faith effort to sell the Coal Fired Electric Generation Facility, the utility shall file an application, not less than twenty-four months prior to retirement, that includes:

(i) A proposed solicitation process for retaining an Independent Evaluator, including;

(A) A description of the Coal Fired Electric Generation Facility that has been identified for retirement, its operating specifications and any associated property or property interests included in the offer of sale;

(B) The utility's most recent integrated resource plan, including any updates or supplemental filings, demonstrating that:

(I) Retiring the Coal Fired Electric Generation Facility is consistent with the utility's obligation to obtain the least cost, least risk resources on behalf of customers;

(II) The Present Value Revenue Requirement impact to customers assuming that the Coal Fired Electric Generation Facility is retired and, conversely, the same analysis if the Coal Fired Electric Generation Facility is sold to a third party and the utility continues to purchase the output of the Coal Fired Electric Generation Facility under a power purchase agreement; and

(III) A demonstration that retirement of the Coal Fired Electric Generation Facility will not adversely impact the reliability of service or availability of resources used to serve Wyoming customers. Such a demonstration shall account for regional as well as local reliability impacts that result from the proposed retirement of the Coal Fired Electric Generation Facility.

(C) A draft request for proposal to retain Independent Evaluator services;

(D) The required minimum qualifications and deliverables for an Independent Evaluator;

(E) The estimated cost of obtaining Independent Evaluator services; and

(F) A draft contract including the proposed terms and conditions under which the Independent Evaluator will operate.

(ii) A proposed solicitation process for the sale of a Coal Fired Electric Generation Facility, including:

(A) The proposed solicitation for the sale of a Coal Fired Electric Generation Facility with appendices, attachments and a proposed asset purchase and sale agreement;

(B) A description of the Coal Fired Electric Generation Facility that has been identified for retirement, its operating specifications and any associated property or property interests included in the offer of sale;

(C) A current accounting of the utility's reserve for decommissioning and retiring the Coal Fired Electric Generation Facility and remediating the facility site, along with the utility's most current estimate of the actual net cost of decommissioning the facility and remediating its site;

(D) A detailed accounting of any known environmental compliance obligations under state or federal law that will or could impact the continued operation of the Coal Fired Electric Generation Facility or its retirement in the future, and an estimate of the cost to comply with such environmental obligations;

(E) A proposed schedule for solicitation, including:

(I) Issuance of request for proposals;

(II) Bid due dates; and

(III) A date when the utility will provide an initial short-list of qualified bidders eligible for more detailed negotiations.

(F) The contact information and/or website for questions and answers on the Coal Fired Electric Generation Facility solicitation process and review;

(G) A detailed plan describing how the utility will solicit prospective purchasers for the Coal Fired Electric Generation Facility, including a list of potentially interested parties and publications to whom the utility will send notices of the solicitation;

(H) A description of the process for prospective purchasers to obtain due diligence information and, if the Coal Fired Electric Generation Facility is not wholly owned and operated by the utility, a description of the other entities that own or operate a portion of the Coal Fired Electric Generation Facility, a copy of any agreements between the utility and the other entities that own or operate a portion of the facility, and a description of any consents, approvals, or votes by other owners that would be required to finalize a sale of the facility;

(J) For Coal Fired Electric Generation Facilities where the public utility will continue to own and operate one or more units, the proposed contractual terms and conditions for sharing of costs associated with joint or common facilities and any restrictions or requirements that may arise from the sale and assignment of the utility's share in that jointly owned facility;

(K) A proposed power purchase agreement, and a calculation of the proposed avoided cost, pursuant to subsection (c);

(L) A proposed form agreement with terms and conditions pursuant to which the utility would sell electricity on the prospective purchaser's behalf to an Eligible Retail Customer;

(M) The proposed terms and conditions for environmental remediation, liabilities and related financial security;

(N) The proposed terms and conditions for any non-environmental liabilities that are related to the sale of the Coal Fired Electric Generation Facility;

(O) A list of the local, state, or federal permits known to the utility to be necessary for the purchaser to own and operate the Coal Fired Electric Generation Facility; and

(P) A list of criteria to be used by the utility for screening and ranking of bids, including:

(I) Requirements for prospective purchasers to demonstrate it has, or has contracted for, financial, technical and managerial abilities sufficient to reasonably:

(1.) Operate and maintain the Coal Fired Electric Generation Facility, including disclosure of any fines, violations and/or citations issued to the prospective purchaser from any regulated entity for any of its operations within a previous five years;

(2.) Decommission and retire the Coal Fired Electric Generation Facility once it ceases operation; and

(3.) Satisfy any environmental obligations to operate and maintain and, if necessary, retire the Coal Fired Electric Generation Facility.

(II) Requirements for prospective purchasers to demonstrate financial ability by providing:

(1.) A complete corporate family tree, disclosing parent and/or subsidiary entities of the prospective purchaser and indicating if the prospective purchaser is liable for any debts of related entities; and

(2.) Complete audited financial statements and tax returns for previous five years, if available, for the prospective purchaser and any parent or subsidiary entities whose credit is being offered by the prospective purchaser to satisfy any financial commitment or obligation associated with the purchase.

(b) Retention of Independent Evaluator

(i) The Commission shall issue public notice of the utility's proposed Independent Evaluator solicitation and establish timelines for public comment and Commission approval of the Independent Evaluator solicitation.

(ii) When the notice process has concluded, the utility shall issue the Commission approved Independent Evaluator solicitation.

(iii) Following the deadline for submittal of bids, the utility shall submit bids it receives from prospective Independent Evaluators in response to the Commission approved Independent Evaluator solicitation along with the utility's rankings. The Commission and intervenors shall submit analysis and comment on bids received from prospective Independent Evaluators.

(iv) The Commission shall select an Independent Evaluator. Upon selection:

(A) The utility shall engage the services of the Independent Evaluator and pay all fees and expenses associated with engaging the Independent Evaluator's services.

(B) The utility may seek recovery of the cost billed to it by the Independent Evaluator. The utility may seek to defer such costs for later recovery in a general rate case filing or propose other methods to recover the cost of the Independent Evaluator, subject to Commission approval.

(c) Determination of Avoided Cost

(i) The Commission shall determine the avoided costs to set a maximum price for any proposed sale of energy and capacity from a Coal Fired Electric Generation Facility.

(ii) The Commission shall issue public notice of the utility's proposed avoided cost and establish timelines for public comment and Commission determination.

(iii) The following factors shall be considered as relevant when determining avoided costs for any proposed sale of energy and capacity from a Coal Fired Electric Generation Facility:

(A) The value of energy and capacity generated by the Coal Fired Electric Generation Facility, which may include:

(I) The usefulness of energy and capacity supplied from the facility during system emergencies, including its ability to separate its load from its generation;

(II) The value of energy and capacity from the facility to the utility's system; and

(III) The capacity increments and the lead times available with the addition of capacity from the facility.

(B) The value of the Coal Fired Electric Generation Facility's reliability benefits, which may include:

(I) The value of existing coal stockpiles at the facility;

(II) The ability of the facility to meet National Electric Reliability Corporation Blackstart Standards;

(III) The value of the facility in providing resilience to the grid in modeled weather and cyber events; and

(1.) The ability to avoid the need to add or accelerate other energy resources to cure shortfalls and meet reliability requirements; and

(2.) Transmission system reliability impacts, to the extent they can be reasonably estimated.

(C) And any other factor the Commission deems appropriate, which may include:

(I) The terms of the proposed power purchase agreement, including the duration of the obligation, termination notice requirement and sanctions for failure to perform;

(II) The lost opportunity costs and long-term pricing risks to customers based on the proposed term length for the utility's purchase from the facility;

(III) The extent to which scheduled outages of the facility can be coordinated with scheduled outages of the utility's facilities; and

(IV) The costs or savings resulting from variations in line losses, if measurable, from those that would exist in the absence of purchases from the facility.

(d) Coal Unit Solicitation

(i) The Commission shall issue public notice of the utility's proposed Coal Fired Electric Generation Facility solicitation and establish timelines for public comment and Commission approval of the Coal Fired Electric Generation Facility solicitation.

(ii) The Independent Evaluator shall:

(A) Oversee the Coal Fired Electric Generation Facility solicitation bid process to ensure it is conducted fairly, including that prospective purchasers are provided sufficient and timely access to financial information, operating data, site visits, management team members and other resources to make evaluations;

(B) Be available and responsive to the Commission throughout the Coal Fired Electric Generation Facility solicitation process; and

(C) Provide consultation and guidance to the utility as the Coal Fired Electric Generation Facility solicitation is conducted.

(iii) The utility shall issue the Commission approved Coal Fired Electric Generation Facility solicitation requesting sealed bids from prospective purchasers of the Coal Fired Electric Generation Facility.

(A) A bidders' conference, hosted by the utility, and attended by the Independent Evaluator, shall be held prior to the issuance of the Commission approved Coal Fired Electric Generation Facility solicitation.

(B) The deadline for submitting bids to acquire the Coal Fired Electric Generation Facility shall be no more than ninety days following the issuance of the Coal Fired Electric Generation Facility solicitation.

(iv) Upon receipt of offers to purchase the Coal Fired Electric Generation Facility, the utility, in the presence of the Independent Evaluator, shall unseal the bids and, in coordination with the Independent Evaluator, conduct a preliminary analysis of the bids received to determine compliance with the bid specifications.

(v) The utility shall, in consultation with the Independent Evaluator, select a winning bidder, if any. If a winning bidder is selected, the utility shall file an application pursuant to Section 21(h)(ii) within 30 days of the conclusion of the solicitation process. If there is no winning bidder, the utility shall file an application pursuant to Section 21(h)(i) within 30 days of the conclusion of the solicitation process.

(vi) The Independent Evaluator shall independently evaluate all bids, submit an analysis of the utility's scoring of the bids received and make a recommendation on whether the utility's selection for a winning bid, if any, was reasonable. If the Independent Evaluator determines that the utility's actions are unreasonable, the Independent Evaluator shall file a report within 30 days of the conclusion of the solicitation process explaining the findings and conclusions.

(vii) The Commission and interested parties may submit analysis and comment on bids received from prospective purchasers.

(viii) The Commission shall approve the utility's selection of the successful bid, if any.

Notes

023-3 Wyo. Code R. §§ 3-25

Adopted, Eff. 3/21/2016. Reserved, Eff. 4/8/2019. Reserved, Eff. 8/24/2020. Amended, Eff. 1/26/2021. Amended, Eff. 1/3/2022. Amended, Eff. 9/15/2022. Amended, Eff. 3/8/2023.