Plutonic Power and GE will make joint bid for $4B hydroelectric project in B.C.
The Canadian Press
August 16, 2008

VANCOUVER — Plutonic Power Corp.(TSX:PCC) and GE Energy Financial Services are teaming up on a plan to build a $4 billion hydroelectric project in southwestern British Columbia.

The companies say the joint deal to build generating stations on the Toba and Bute inlets in B.C. would be the largest single private sector investment in hydroelectric generation in Canada.

The planned project responds to a request for new plant proposals from BC Hydro, the Crown owned provincial utility - a process that wraps up in November.

"With the support of GE Energy Financial Services as our partner, we are confident in submitting a very strong bid," said Plutonic CEO Donald McInnes.

"These projects have the potential to generate enough clean energy to meet the needs of over 300,000 homes and will position Plutonic and GE Energy Financial Services as leaders in the development of clean energy and reduction in reliance on fossil fuel-generated electricity by annually offsetting over 2.2 million tonnes of CO2 emissions."

The Upper Toba Valley project consists of three sites with a capacity of about 120 megawatts and the Bute Inlet project is made up of 18 sites with a capacity of 900 megawatts.

Both are in the permitting and review stages of the environmental assessment process.

If the joint bid is successful, GE Energy Financial Services, a unit of U.S. industrial giant General Electric (NYSE:GE), will invest $70 million for a 50 per cent stake in the Upper Toba Valley project. It will also contribute, by itself or with other partners, another $650 million for 60 per cent of the Bute Inlet project.

Prior to GE's investment, Plutonic Power would be responsible for all costs of permitting, public consultation and environmental assessment certification.

Plutonic can repurchase a 10 per cent interest in the Bute Project by making a $100 million contribution to capital costs.

As part of the deal, GE Energy will also be granted five million warrants to buy shares in Plutonic Power.

"This bid strengthens the existing relationship between Plutonic and GE Energy Financial Services and, if successful, would significantly expand GE's renewable energy base in the province of British Columbia," said Mark Tonner, managing director for Canada at GE Energy Financial Services.

The Bute project is located north of the Toba Valley, where Plutonic and GE Energy are already partnering on the $660 million, 196 megawatt East Toba River/Montrose Creek hydroelectric power project.

That project has been under construction since last July.

Plutonic Power's proposed Green Power Corridor is comprised of 40 generating plants, including East Toba River/Montrose Creek, with the design capacity to generate enough energy to meet the annual needs of about 630,000 homes.

Late Friday, Plutonic Power reported loss of $3.7 million or nine cents per share for the second quarter ended June 30. That compared with a net loss of $2.7 million or seven cents per share.

It said the increased loss resulted from higher operating costs it prepares to submit a proposal for as much as 1,000 megawatts of run-of-river capacity into British Columbia Hydro Authority's "clean power call."

The deadline for proposals to be submitted is Nov. 25. Awards are scheduled for mid April 2009 through June 2009. Shares in Plutonic Power traded up four cents on the TSX at $7.04.