Business in Vancouver May 1-7, 2007; issue 914

Victoria OKs huge run-of-river project

Plutonic Power Corp. plans $550 million renewable energy development in province’s northwest

Krisendra Bisetty

Shares in Vancouver-based Plutonic Power Corp. (TSX-V: PCC) surged to their highest level last Thursday after the Vancouver company received a vital green light from the B.C. government.

The awarding of provincial environmental certification moves Plutonic another step closer to building B.C.’s largest renewable energy undertaking: a $550 million set of run-of-river projects in the province’s northwest region.

The project still needs a federal environmental approval.

“It’s a huge win for us,” said Donald McInnes, its president and CEO.

Plutonic, whose shares on the Toronto Stock Exchange’s venture exchange rose $0.55 to a high of $6.30 after the announcement, from a 52-week low of $0.83, is developing the 196-megawatt run-of-river hydroelectric project, together with a 145-kilometre-long transmission line that will be connected to the electricity grid.

The project will be located on two sites on the East Toba River and Montrose Creek, 150 kilometres north of Powell River.

The provincial ministries of Environment and Energy, Mines and Petroleum Resources said in a release that the approval followed an environmental assessment report that concluded the project would have “no significant environmental, social or health effects” on the surrounding area.

But Guy Dauncey, president of the B.C. Sustainable Energy Association, said “green” power micro-hydro projects were not always a good thing.

“Each project exists in a different landscape and some can be benign and some can cause much more destruction,” he said in an interview, stressing he had not analyzed Plutonic’s project.

Another concern was the value of the sale of the water license, he said.

“I’m just not sure that’s it’s always in the public benefit to be selling off the water licences.”

The provincial environmental assessment certificate contains more than 77 commitments that Plutonic will be required to implement throughout the various phases of the project, which would take about three and a half years to build.

The commitments include mitigation measures to protect wildlife and fish and their habitats and protection of areas of cultural significance to the Klahoose, Sliammon and Sechelt first nations.

The company signed an impact benefit agreement April 19 with the Sliammon band – an earlier deal was signed with the Klahoose band – over whose traditional land the transmission infrastructure will be developed.

McInnes said the provincial government approval was the culmination of over two years of environmental fieldwork, analysis and community and government consultation.

“This project will make a significant contribution in helping B.C. achieve energy self-sufficiency and provide numerous economic benefits to residents in the Powell River area,” he said.

McInnes, a director of the company, formed Plutonic in 2003, a decade after founding several other public companies, mainly in the natural resources sector.

Last fall, the company said it had secured a deal with Connecticut-based GE Energy Financial Services for a $100 million equity investment in the company.

That deal, it added at the time, would also enable another subsidiary of blue chip conglomerate General Electric Co. – General Electric Finance – to lead a $400 million debt financing for the project.

The financing arrangement would give GE a 49% equity and 60% economic interest in the project in return for its $100 million outlay.

But McInnes said Thursday that deal had not yet closed, because it was dependent on the environmental permit approval.

Plutonic’s project was one of 38 approved last July by BC Hydro, which later signed two 35-year electricity purchase agreements with Plutonic.

kbisetty@telus.net