FNPA. The Pathway to Powerful Opportunities

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Felicity Watson
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1 FNPA The Pathway to Powerful Opportunities

2 Why Invest in Power? Power industry requires unprecedented levels of investment in Saskatchewan over $15 Billion will be spent in renewing and building new power system infrastructure. The time is now! Power is a growing area of importance for First Nations economic development and investment 1. Reliability Issues 2. Rising Utility Costs 3. Environmental Impacts 4. Cornerstone Infrastructure to Attract and Build New Industry and New Businesses 5. Infrastructure Projects Generate Spin Off Business Opportunities 6. Long Term and Stable Investments 2

3 Because.Reliability Issues 1. What happens if the power isn t there when you need it? 2. Far North and Remote areas are disproportionately impacted with power reliability issues. 3. Power Outages vs Power Quality 3

4 Because Rising Utility Costs 1. Utility prices are on the rise! 2. Saskatchewan has some of the least expensive power rates in the country and needs to catch up predictably, more increases in the future. 3. Factors impacting power rates: Aging infrastructure Growing population Increased industrial demands Greenhouse Gas Emission Regulations shift away from coal power. SaskPower has applied for a 15.5 per cent rate increase over three years. Read more: seeks 15 5 per cent rate hike #ixzz2vW81koq8 4

5 Because Environmental Impacts 2011 Harvard report: external costs of coal up to $500 billion annually Land disturbance Methane emissions from mines Air pollutants from combustion Lost productivity from mercury emissions Climate damage from combustion emissions of CO 2 and N 2 O Cardiac health concerns Mine abandonment 1. >70% of Saskatchewan power production comes from coal and natural gas 2. <25% of Saskatchewan power production comes from renewable power generation. 3. Greenhouse Gas Regulation will change the playing field for thermal generation. 5

6 Because Cornerstone Infrastructure Large, distributed investments become significant economic drivers for new business opportunities At the Intersection (Canada West Foundation) proposes 5 recommendations for extracting maximal economic value from infrastructure investments: Continued and sustained and strategic investments Investment that enhances economic performance. Innovative approaches to the design Renewing existing public infrastructure as well as building new Ongoing analysis and evaluation and apply lessons 6

7 Because Spin-Off Business Opportunities releases/infrastructure investments driveproductivity Canada West Foundation high level of investment in public infrastructure because it is a key driver of economic productivity public and private infrastructure valued at $4 trillion in Canada 1. SaskPower will spend over $15 Billion in power infrastructure in Saskatchewan over next years unprecedented. 2. SaskPower is exploring best options to deploy and maximize outcomes from this investment. 3. By providing REAL solutions, First Nations can contribute to this growth. 7

8 Because Long Term and Stable Investments Power Projects have LONG TERM and GUARANTEED RETURN contracts Power Purchase Agreements 20 year government backed contracts are bankable documents (40 year in the case of hydroelectricity) Long term contracts provide stability to build capacity, balance sheets and invest in the future. 8

9 Power Industry Challenges? 1. Electricity, its transmission and distribution is a very complex system. It is very much like an ecosystem where an impact in one area will impact another very directly. 2. Highly technical and international regulated industry. 3. Performance standards must meet international requirements 4. Very specific needs must be met right project, right time and right place. 5. Long development timelines. 6. High upfront development costs. No guarantee of returns. 7. Despite the experience of many power developers in other jurisdictions Saskatchewan has its own approach and own regulatory environment. 9

10 Best Approach to Challenges 1. Do your homework. 2. Portfolio approach. 3. Credible partners. 4. Think long term / start now! 10

11 What you need to know to talk power! POWER INDUSTRY ESSENTIALS 11

12 What is Electricity? Electricity is a manufactured product packets of energy generated by a power generation facility Generation refers to the production of electricity Renewable Hydroelectricity, Biomass, Solar, Geothermal, Biofuel, Wind, Wave/Tidal Non Renewable fossil fuels: coal, gas, oil, diesel Combined Benefits/Challenges Nuclear

13 What is Transmission? What is Distribution? Power Transmission is the movement of electricity from its place of generation to a geographic location where there is demand for energy eg) towns, cities, large industrial users. Think large power lines as you drive down the highway! Power Distribution is the movement of electricity from a high volume transmission line (big buckets!) through a sub-station that brings electricity down to a lower voltage (small buckets!) where it can be consumed by a customer. Think power meter on your house! Together - the combined transmission and distribution network is known as "the grid". It takes lots of math, people, communication systems and infrastructure to make it all work together to deliver SAFE and RELIABLE power to your home!

14 The Power System

15 Centralized Power vs. Distributed Power ONE PROJECT VS MANY PROJECTS

16 FNPA HOW CAN WE HELP?

17 FNPA began as What? A membership based not for profit corporation in SK. Why? Arose of out a growing interest among First Nations and Independent Power Producers (IPP) to work together in SK. Our Role? Facilitate the creation and development of First Nations led projects in the power industry through a long term agreement with SaskPower. 17

18 FNPA Long Term Goals To reduce project development risk for First Nations and Industry Members in the power sector. To build First Nation CAPACITY governance, corporate, organizational, individual. To facilitate First Nation s genuine engagement in the economy fill a gap that is being experienced by both the market and within First Nation communities. To provide First Nations multiple and non restrictive opportunity pathways to power industry related projects. 18

19 Why FNPA? Provincial directive / SaskPower Buy in / First Nation validated Level the playing field for First Nations FNPA provides access to basic industry information at an affordable price. Facilitate First Nations Involvement without compromising technical, financial and operational requirements. Partnerships are essential to First Nation s success in power industry FNPA facilitates the partnerships to allow First Nations to choose their own pathway. 19

20 FNPA Members General Members and Industry Members. We are our members and we have a healthy ecosystem of members. Large and small Geographically diverse Different project interests Different strengths, capabilities and partnership needs

21 FNPA Members General Members: FHQ Developments, Flying Dust First Nation, Cumberland House Saskatchewan River Business Corporation, Canoe Lake First Nation, Ministikwan First Nation, Fond Du Lac Denesuline, Makwa Sahgaiehcan First Nation, Key First Nation, Waterhen Lake First Nation, Buffalo River Dene Nation, Clearwater River Dene Nation, Birch Narrows Dene Nation, English River First Nation Industry Members: Algonquin Power (HQ: Ottawa, International); BluEarth Renewable Energy (HQ: Calgary, National); Energizing Co (HQ: Los Angeles, International); GE Energy (HQ: Ottawa, International); Leader Resources (HQ; New York, International); Lockheed Martin Canada (HQ: Kanata, International); Petro Nation Resources LLC (HQ: USA, International); Renewable Energy Systems Canada (HQ: Montreal, National) 21

22 FNPA Building Bridges, Building Partnerships Concept build a bridge between FN business interests in the power sector and SaskPower. Founders Meeting in Oct Joint MOU Province of Saskatchewan, SaskPower and a newly created FNPA. Then the work began. 22

Building Bridges Start with the customer Who is our customer? Customer is the one who writes the cheque SaskPower. Meet the customer s needs! Understand well the customer s needs and priorities.

23 Building Bridges Start with the customer Who is our customer? Customer is the one who writes the cheque SaskPower. Meet the customer s needs! Understand well the customer s needs and priorities. Solidify the opportunity with the customer Master Agreement. Identify specific project opportunities to fall under a Master Agreement. Master Agreement was finalized and announced in February 2013.

24 FNPA Relationship to SaskPower 1. Master Agreement 10 year agreement to share their strategic plans for new power plants every three months. 2. Real Projects 30MW of renewable power under development. 3. Working Partnership FNPA works continually with SaskPower to identify real opportunities for First Nations contracts! 4. Improve the Dialogue FNPA is working to improve SaskPower s success in redefining their relationship with First Nations people. 24

25 Building Bridges Members are Key Member Business Needs General Members and Industry Members: Common Interests Business opportunities in the power industry in Saskatchewan. What do they need to be successful in securing those opportunities? How can we add to the success rate?

Building Bridges Making the connection How can we add to the success rate? Identify Marketable and Economic Project Opportunities. Engagement at concept stage.

26 Building Bridges Making the connection How can we add to the success rate? Identify Marketable and Economic Project Opportunities. Engagement at concept stage. Enhance technical expertise for our General Members more informed and cost effective decision making. Clear pathways to opportunities. Opportunity to customize and build creative solutions to meet customer and member needs policy, procurement, processes and procedures.

27 FNPA The Path Forward P A R T N E R S H I P S FNPA Members

Advantages of PARTNERSHIP Gain specialized and broader expertise quickly sometimes available by no other means Gain access to new business

28 Advantages of PARTNERSHIP Gain specialized and broader expertise quickly sometimes available by no other means Gain access to new business networks Creates & expands a collective bargaining tool Encourages government to actively participate The broader the partnership multiplier effect

29 FNPA Team FNPA Staff Resources Tracey Pascal Membership Coordinator Brad Wolbaum Business Analyst Al Thibeault P.Eng. PMP, Project Manager Jason Pollock Senior Advisor Leah Nelson Guay Executive Director Board of Directors Ben Voss,Chairman (MLTC RDI) Vern Bachiu, Vice Chair (Triall Consulting) Tribal Chief Felix Thomas (Saskatoon Tribal Council) Paul Martin (Martin Charlton Communications) Lee Ahenakew, Governance & Nominations Committee Chair (BHP Billiton Canada) Harvie Campbell, Projects Committee Chair (Bastion Power) Mariana Mora, Finance & Audit Committee Chair (RBC Commercial) 29

30 QUESTIONS? web: Tracey Pascal Membership Coordinator phone: toll free:

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