December 2, 2016 EAB File #: Transaction #:

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1 Ministry of Environment Environmental Assessment and Stewardship Branch 4 th floor, 3211 Albert Street Regina, Saskatchewan S4S 5W6 Phone: (306) Fax: (306) December 2, 2016 EAB File #: Transaction #: Jennifer Sargent-Horbay Environmental Assessment & Approvals SaskPower 6SE 2025 Victoria Avenue Regina SK S4P 0S1 Dear Ms. Sargent-Horbay: Re: Chinook Power Station Project The Saskatchewan Ministry of Environment (the ministry), Environmental Assessment and Stewardship Branch (EASB), has received your Application for Ministerial Determination and has completed a screening of SaskPower s proposed project, entitled Chinook Power Station Project (the project). The proposed project is described in the following documents, collectively termed the Application : The Swift Current Combined Cycle Power Station Project: Project Description and Technical Proposal, dated August 2016; Letter from SaskPower dated September 29, 2016, in response to a request for additional information. Based on the information presented in the Application, it is our determination that the project does not meet the criteria of section 2(d) of The Environmental Assessment Act (the Act) and, therefore, is not a development that is required to undergo an Environmental Impact Assessment (EIA). This determination is provided under the authority of section 7.3 of the Act and grants the proponent authorization to proceed with the subsequent regulatory approvals for this project. The project is deemed not to be a development as per the attached Reasons for Determination. In addition to advising of our determination, this letter also includes the following terms and conditions. 2

2 Jennifer Sargent-Horbay Page 2 December 2, 2016 The decision to not require an EIA pursuant to the Act is contingent on compliance with the following terms and conditions: 1. The project must be undertaken and environmental protection measures implemented in the manner described in the Application, except where alterations are required for compliance with other regulatory requirements. 2. EASB must be advised if you plan to alter the project significantly from that described in the Application. 3. EASB must be advised if work is not commenced within two years of the date of this letter. The Application s environmental acceptability would be re-examined in light of the circumstances of the day. 4. You must comply with all other federal, provincial and municipal regulatory requirements including those from the ministry. 5. You must comply with all reasonable follow up Ministerial requests to monitor compliance with these conditions. 6. Within one year of the date of this letter, SaskPower shall submit for approval by the EASB, a detailed wildlife habitat compensation plan to offset effects of the project on sharp-tailed grouse that will be displaced as a result of the construction and operation of the project. The compensation plan should be sufficient to conserve and enhance a comparable functional area of habitat for the species and consideration should be given to the quality of habitat and permanence of securement. The plan must include: A description of the process and methodology that will be used to identify, secure and manage the offset project; A science-based justification of the quantity and quality of offsite habitat required to offset impacts on sharp-tailed grouse at the development site; A description of candidate offset sites containing active sharp-tailed grouse lek(s) and suitable associated nesting habitat in the project region; Recommendation of a preferred offset option; A timeline for delivery of the offset plan; and, A monitoring program to assess the success of the offset plan. Please also be advised that: 1. This letter is NOT an approval to proceed with construction activities, it is simply provided by EASB to inform you that you may proceed to obtain other permits and approvals that may be required. Additional approvals from the ministry and other agencies may be required. 3

3 Jennifer Sargent-Horbay Page 3 December 2, As noted above, EASB has made a determination that the proposed undertaking is not a development. The purpose of providing a determination is to provide some certainty that the ministry will not initiate any action to require an EIA pursuant to the Act. 3. The province recognizes its constitutional obligation to consult with potentially affected First Nations and Métis communities when making decisions that may adversely impact the exercise of Treaty and Aboriginal rights. If the project may have an impact on Treaty or Aboriginal rights, decisions by other government agencies during permitting may trigger the Crown s duty to consult. Should you have any questions regarding the content of this letter, please feel free to contact Brianne England, Senior Environmental Assessment Administrator at (306) Sincerely, for Original signed by Sharla Hordenchuck Wes Kotyk A/Assistant Deputy Minister Acting for and on behalf of the Minister of Environment Phone: (306) Enclosure: Reasons for Determination cc: Sharla Hordenchuk, Environmental Assessment and Stewardship Branch, Ministry of Environment Brady Pollock, Environmental Assessment and Stewardship Branch, Ministry of Environment Brianne England, Environmental Assessment and Stewardship Branch, Ministry of Environment Brant Kirychuk, Fish, Wildlife and Lands Branch, Ministry of Environment Jeff Hovdebo, Water Security Agency Lynn Kelley, Technical Resources Branch, Ministry of Environment Ash Olesen, Environmental Protection Branch, Ministry of Environment Matt Nasehi, Climate Change Branch, Ministry of Environment Bram Nelissen, Lands and Mineral Tenure, Ministry of the Economy EA Records

4 Reasons for Determination Date: December 2, 2016 EAB File #: Transaction #: Project Title: Chinook Power Station Project Proponent: Saskatchewan Power Corporation (SaskPower) Proposal: SaskPower is proposing to construct and operate a nominal 350 megawatt (MW) combined cycle natural gas power station at SE W3M approximately 11 kilometers (km) northwest of Swift Current, Saskatchewan (the project). The project is intended to supplement an increase in wind and other renewable energy generating capacity, which is intermittent in nature, in order to provide SaskPower added flexibility with the ability to ramp up or down quickly to provide a continuous supply of electricity to meet demand. The Chinook Power Station project also includes a switchyard to interconnect to the 230 kilovolt (kv) transmission system and an 18 kilometer (km) underground water pipeline. The information provided in the project proposal has led to the determination that the described project does not trigger the criteria of section 2(d) of The Environmental Assessment Act (the Act) and therefore is not considered a development and will not require an Environmental Impact Assessment (EIA). The determination that this project is not a development is based on the potential to meet the following criteria of section 2(d) of the Act being met: a) have an effect on any unique, rare or endangered feature of the environment; The project facility footprint will affect an area of 29.2 hectares (ha) (27 ha of tame pasture and 2.2 ha of modified native vegetation). The water pipeline will affect an area of 27 ha but will be primarily confined to road right of ways to avoid impacts to sensitive habitat and native vegetation. The project has been sited in an agricultural area to minimize disturbance to native vegetation and the potential for impacts to species at risk. The facility will also be located adjacent to the Swift Current industrial landfill. No federally or provincially listed plant species were found in the project area during field surveys conducted in 2015 and The project has been sited to avoid wetlands to the extent feasible. No wetlands will be directly impacted by the construction and operation of the facility. There are wetlands occurring along both route alternatives for the water pipeline; however, construction will either utilize directional drilling under the wetlands to avoid impacts or occur during frozen or dry conditions to minimize disturbance. Desktop surveys conducted for the project indicated the potential for northern leopard frog (Lithobates pipiens) and long-billed curlew (Numenius americanus) to occur in the project area. Field surveys were conducted in the project vicinity in August 2015 and spring A northern 1

5 leopard frog was observed during field surveys; however, the facility will be sited to the north part of the quarter section to avoid potential effects to the wetland and associated species. A sharp tailed grouse (Tympanuchus phasianellus) lek with approximately 50 adults was detected in the project area during field surveys in April Sharp tailed grouse populations in Saskatchewan are ranked provincially by the Saskatchewan Conservation Data Centre as S5 which is defined as, secure/common- demonstrably secure under present conditions; widespread and abundant. SaskPower has explored facility positioning and design options to reduce effects to the lek but given the close proximity to the project has acknowledged that the project will result in direct effects to the lek as well as sensory disturbance and displacement of sharp-tailed grouse throughout construction and operation of the project. SaskPower has committed to offsetting the lek disturbance and will be required to mitigate for the loss of wildlife habitat as a result of the project. As a condition of this determination, SaskPower must submit a wildlife habitat offset plan for approval by the ministry. A screening for heritage resources was undertaken for the project. No heritage resources occur on the project facility footprint however a heritage resource impact assessment (HRIA) will likely be required for the final potable water pipeline route once it has been selected. Construction for the water pipeline will be confined to the developed portion of the road allowances where feasible to minimize any potential for disturbance to heritage resources. SaskPower will require final clearance for the project from the Ministry of Parks, Culture and Sport Heritage Conservation Branch prior to construction. Adverse effects of the project on rare or endangered features of the environment are not anticipated based on the measures proposed to avoid, minimize and compensate for impacts. b) substantially utilize any provincial resource and in so doing pre-empt the use, or potential use, of that resource for any other purpose; The facility will require approximately 180 liters/minute of water from the City of Swift Current via an underground pipeline from the South Hill Reservoir. Water can be provided within the existing allocation to the City issued by the Water Security Agency. Approximately 70% of the process water will be recovered and recycled. The combined cycle natural gas design of the Chinook Power Station Project has been selected to maximize efficiency and the project will further minimize water usage by installing an air cooled condenser rather than water cooling. There will be no substantial use of a provincial resource pre-empting its use for other purposes. 2

6 c) cause the emission of any pollutants or create by-products, residual or waste products which require handling and disposal in a manner that is not regulated by any other Act or regulation; The Chinook Power Station Project has been designed to be highly efficient and will emit 60% less carbon dioxide than conventional coal-fired generation. Carbon dioxide equivalent emissions (CO 2 E) (includes carbon dioxide, methane, and nitrous oxide) will average a total of 1,038,463 tonnes annually. CO2 emissions will range from 370 to 400 kilograms per megawatt hour. Air emissions will conform to Saskatchewan and Canadian Ambient Air Quality Standards. Waste water will be discharged to a lined evaporation pond on-site and will be regulated under The Environmental Management and Protection Act, All waste and debris generated by the project will be collected and disposed of by licensed contractors in accordance with federal, provincial and municipal regulations. d) cause widespread public concern because of potential environmental changes; SaskPower has conducted public engagement on the project since June 2012, and has been engaging directly with nearby landowners since January Landowners were contacted in June 2015 and were notified that the final site had been selected for the project. Concerns were expressed about water usage and transmission line routing and SaskPower has worked to address all concerns to the extent feasible. Water will be sourced from the City of Swift Current and will not affect nearby groundwater users. SaskPower held an open house in Swift Current to discuss the project on October 13, No widespread public concern regarding environmental change has been identified with this project. The project will likely cause minor environmental change during the construction phase; however, residual effects will not be significant and therefore widespread public concern is not anticipated. e) involve a new technology that is concerned with resource utilization and that may induce significant environmental change; or No new technology is being used. Although this project will be the first combined cycle gas power station in Saskatchewan similar power stations are in use in other jurisdictions and are favored because of increased efficiency. SaskPower will minimize natural gas, water usage and greenhouse gas emissions by utilizing this facility design. 3

7 f) have a significant impact on the environment or necessitate a further development which is likely to have a significant impact on the environment The majority of the project area is cultivated and tame pasture. The water pipeline route alternatives are located in existing road allowances and adjacent to cultivated land. Impacts to vegetation will be minimized through careful siting and following construction disturbed areas will be reclaimed, reseeded (using native seed in areas of modified native vegetation) and monitored. An environmental monitor will be on site to address potential environmental issues during construction and to confirm mitigation and environmental protection measures described in the proposal are carried out. The criterion is not met. Conclusion: Based on the above considerations, the ministry s review of the proposal concludes that the project is not a development that is required to undergo an EIA and require a Ministerial Approval as identified in Section 8 of the Act. The project is subject to all other regulatory requirements, the protection measures in the proposal, and the stipulations in the attached letter. 4