Generation. Generations

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1 Generation for Generations Atlin Hydro Project The Sunny Atlin Experience Generation for Generations 17Jan2017 Peter Kirby President & CEO XEITL LIMITED PARTNERSHIP

2 Generation for Generations Atlin Hydro Project Atlin

3 Generation for Generations Atlin Hydro Project

4 Combining 3 Important Goals The TRTFN is actively building a working model that can help sustain our people for many generations to come. 1. Revival of cultural values and sustenance 2. Responsible management of resources 3. Sustainable economic development The Atlin Hydro Project is a critical component of achieving this vision:

5 Sustainable Development Cultural Revival Resource Management Development Corporations

6 TRTFN Development Corporations Taku River Tlingit First Nation Atlin Tlingit Development Corporation Xeitl Limited Partnership Atlin Hydro Project Taku Wild Corporation

7 2015 ALL TRTFN Corporations and Partnerships TRTFN Shareholders Taku Wild Salmon Products Common Shares 100% Common Shares 100% Ed Anderson Trustee Taku Land Corp Common Shares 100% 0.01 % Class A Units 0.01 % Class A Units Preferred Shares 100% 0.01 % Class A Units % Class A Units Atlin Tlingit Economic GP % Class A Units Atlin Power Ltd General Partner % Class A Units Tlingit Homeland Energy GP Atlin Tlingit Economic LP (ATELP) (Development Corporation) Xeitl Limited Partnership (XLP) (Existing Hydro Project) Tlingit Homeland Energy LP (THELP) (Hydro Expansion Feasibility Study)

8 Generation for Generations Atlin Hydro Project Economic Development Goals Create a Source of Our Own Money Create Employment Training & Capacity Building Use Local Natural Resources Environmentally Beneficial Stop $ Leakage from Community (this hydro project does all of the above)

9 TRTFN Shareholders Taku Land Corporation Atlin Hydro Project Atlin Tlingit Development Corporation Fuel Construction Services Transfer % Atlin Power General Partner Xeitl Limited Partnership (100% of Hydro Project) 0.01 % Sell fuel to Project Contractors during development Equipment, Manpower, Smaller Elements Project Management, Hydrology, Permitting, Development Financing 24 year Loan secured by 25 year Electricity Purchase Agreement

10 Generation for Generations Atlin Hydro Project Background 100 years ago

11 Generation for Generations Atlin Hydro Project Background Recent Efforts 1980 s and 90 s several studies for hydro on Pine Creek (6-8 MW scenarios) Late 1990s TRTFN pre-feasibility study for a small hydro project on Pine Creek (CESO) TRTFN approached BC Hydro 2002 TRTFN and BC Hydro agree to conduct CEP together 2003 Community Energy Plan (CEP) studies wind energy and hydro on Pine Creek, demand assessment

12 Generation for Generations Atlin Hydro Project Community Energy Planning

13 Generation for Generations Atlin Hydro Project The Atlin CEP (Community Energy Plan) Electricity Demand Assessment 20-Year Demand Projection Energy Efficiency Recommendations Power Supply Options Assessment: Wind study (wind towers) Connection to Yukon power grid (YEC) Hydro (full pre-feasibility study, 3 scenarios) 75% of Atlinites selected small hydro

14 Generation for Generations Atlin Hydro Project Permitting and Licensing

15 Generation for Generations Atlin Hydro Project Permitting Agencies 1. BC Min Environment Water Stewardship Division 2. BC Ministry of Agriculture and Lands 3. Canadian Environmental Assessment Act (CEAA) 4. Taku River Tlingit First Nation 5. Department of Fisheries and Oceans 6. BC Ministry of Transportation 7. BC Ministry of Forests 8. BC Ministry of Community Services 9. Atlin Advisory Planning Commission 10. Indian & Northern Affairs 11. Transport Canada Navigable Waters 12. Ministry of Energy, Mines and Petroleum Resources 13. Environment Canada 14. Natural Resources Canada

16 Generation for Generations Atlin Hydro Project Inter-Agency Site Visit at Surprise Lake Control Site.

17 Generation for Generations Atlin Hydro Project Environmental Impact Assessment Project Description Impact Assessment Land requirements Fisheries, habitat, quality Operation of works Watershed characteristics Water availability Market for Power Effects on other rights Development schedule Hydrology Wildlife and habitat Roads, bridges, crown Navigable waters, forests Existing rights mineral claims and other tenures First Nation, archeology Public, recreation, access Hazards, flood control Monitoring

18 Generation for Generations Atlin Hydro Project Public Consultation AAPC involved in review process and sent all information and referrals Assessment Report and Appendices at Atlin Government Agents Office for public viewing Open Houses and Community Updates, Prospector, Atlin Claim Advertising for Navigable Waters Application public comment Advertising for Lands Application public comment and AAPC input Ongoing Open door information policy

19 Generation for Generations Atlin Hydro Project Fisheries Field Assessment

20 Generation for Generations Atlin Hydro Project Snorkel Fish Survey

21 Generation for Generations Atlin Hydro Project Hydrology Assessment

22 Generation for Generations Atlin Hydro Project Surprise-Pine Drainage Basin Pine Creek Drainage Basin 557 km 2 Surprise Lake Drainage Basin 467 km 2 Intake Location

23 Generation for Generations Atlin Hydro Project Pine Creek Discharge at Intake Pine Creek Discharge at INTAKE LOCATION ba se d on wa t e r she d a r e a r a t i o of WS C P i ne / S pr uc e D a t a c ol l e c t e d be l ow c onf l ue nc e (chart ed 2004 S. Simpson) y Av 1955 MAD 15%MAD

24 Generation for Generations Atlin Hydro Project Streamflow Measurements near Intake Location on Pine Creek

25 Generation for Generations Atlin Hydro Project Streamflow Measurements near Intake Location on Pine Creek

26 Generation for Generations Atlin Hydro Project Project Description

27 Generation for Generations Atlin Hydro Project Project Description Project Elements (moving downstream) 1. Discharge control structure and fish ladder at Surprise Lake bridge 2. Intake and Weir on Pine Creek inch Penstock-pipeline 3.9 km from intake to powerhouse 4. Powerhouse and switch-yard near confluence of Pine and Spruce Creeks km Powerline from powerhouse to interconnection with existing grid

28 Generation for Generations Atlin Hydro Project Google Looking North Surprise Lake Control Structur Powerline Powerhouse Penstock Intake

29 Generation for Generations Atlin Hydro Project Surprise Lake Used for seasonal water storage. Area 31 square km.

30 Generation for Generations Atlin Hydro Project Surprise Lake Outflow with remains of historic control works

31 Generation for Generations Atlin Hydro Project CONSTRUCTION The Atlin Hydro Project

32 Generation for Generations Atlin Hydro Project Control Structure and Fish Ladder Surprise Lake bridge was replaced Worked with MoTH on design for hydro structures within the highway right of way, adjacent to the new bridge Optimal that construction coincided with planned 2007 replacement of the bridge Flow control gate Overflow spillway Fish ladder bypass

33 Generation for Generations Atlin Hydro Project Overflow Spillway Fish Passage Improved Channel Discharge Control Structure

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40 Generation for Generations Atlin Hydro Project Intake on Pine Creek Concrete diversion weir for power flows into penstock Headpond for hourly fluctuation in demand Low-level weir for in-stream flow release Overflow bypass Minimal fisheries impacts

41 Generation for Generations Atlin Hydro Project Intake Location Intake Weir Intake Pipe

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54 Generation for Generations Atlin Hydro Project Penstock Pipeline 3.95 km length 105 m gross vertical head 48 diameter high density polyethylene Buried 2 m deep, minimal impacts to wildlife and human movement

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67 Generation for Generations Atlin Hydro Project Powerhouse and Powerline Located just above confluence of Pine and Spruce Creeks 2.1 MW pelton turbine generator Tailrace channel back into Pine Creek Transformer and Switchyard 0.8 km of 25kV powerline connecting to existing local grid at Surprise Lake road Land tenures required Will cross active mining tenures

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90 Generation for Generations Developing Atlin Projects Hydro Project in Small Northern Aboriginal Communities

91 Generation for Generations Atlin Hydro Project Challenges in a Small Northern Aboriginal Community Atlin: No municipal or regional government (unincorporated) Limited attention from BC government Limited local services & O/M budgets Implication: Many community services & projects must be initiated by TRTFN or their development corporations, as there is no other organization who can (ie. potable water, waste water, land use planning, community services, renewable electricity supply )

92 Generation for Generations Atlin Hydro Project Challenges in Small a Northern Aboriginal Community Limited financial and human resource capacity Same people wear many hats Each new project has it s own specific learning curve Employee & volunteer burn-out is a concern and affects projects High costs to bring in technical expertise

93 Generation for Generations Atlin Hydro Project Challenges in Small a Northern Aboriginal Community Lack of investment equity available within the First Nation, or in Atlin Reliance on building in-kind equity to leverage financial resources Reliance on government assistance during development of projects IT DOESN T MATTER - YOU STILL CAN DO IT!

94 Generation for Generations Atlin Hydro Project BENEFITS in Small Northern Aboriginal Communities More of a focus regarding climate change in northern communities Assistance is available Governments Human resource capacity is forced to develop to fill void in manpower and services We can learn from each other

95 Generation for Generations Atlin Hydro Project Project Timeline Project Milestones Completion date Public Consultation & Information (ongoing) Completion of Strategic Plan 2001 Approached BC Hydro to initiate CEP 2002 Community Energy Planning Project 2003 Applied for Water Licence - LWBC 2004 Secure Development Financing Project Permitting Studies 2005 Developed Proposal to BC Hydro 2005 Negotiated EPA with BC Hydro 2005 Submitted Final Development Plan & EA 2006 Financing 2006/08 Final Design and Tenders 2006 Environmental Approvals, Permitting 2006 Construction Operation 2009 April 1st

96 Generation for Generations Atlin Hydro Project Major Tasks Risk Management Schedule Updates Costing and Cost Control Budget and Cost Management Insurance Project Manager Training Financial Advice Legal Company Structure Bridge Financing Filing and Record Keeping Tendering and Sourcing Coordination of Procurement & Construction

97 Generation for Generations Atlin Hydro Project Lessons Learned Research the requirements of the entire development process way ahead of time. Use all available handbooks, guides, websites and previous reports. Talk to regulators early. (Try to) nail them down regarding your permitting requirements and process. Have an Inter-Agency meeting. Develop a detailed multi year plan, with critical milestone dates identified. Talk to others who have done it. Learn from them. Engage them to help you.

98 Generation for Generations Atlin Hydro Project Lessons Learned Even though you think you have hired the best, get a second opinion occasionally. Our project design changed a few times as we eliminated un-necessary features. We didn t push hard enough for the technical support available from NRCan Continually double-check your important assumptions, many of them change as the project evolves. Even good engineers can miss important things that can seriously increase costs.

99 Generation for Generations Atlin Hydro Project Financing the Project Look past the banks for long term money. Hire a financial advisor with familiarity negotiating loans for large projects. Realize your lender will require ENORMOUS security and will own your project until the loans are paid off. Do not underestimate the legal side of borrowing large amounts. The paperwork is incredibly complex and onerous. Don t forget about loan conversion and follow-up Find bridge financing early to cover grants approved but not yet received

100 Generation for Generations Atlin Hydro Project Financing the Project We borrowed long term money (1 year less than EPA = 25 year EPA, 24 year loan) Financial crash occurred just when we needed money AND construction prices increased Shadow bid for one contract was $3.0 - $3.5M Actual bids next spring were.... More, waaaaayyyy more, things can and do change during project development (both up and down) We needed more money and Ecotrust stepped up, later they were replaced by the Regeneration Fund That money was expensive! Prime plus a % that was more than any mortgage in the last 20 years

101 Generation for Generations Atlin Hydro Project Financing the Project The extra money we needed was very expensive but we needed it to make the project work and had no where else to go so we accepted high rates The First Nations Financial Authority was not operational at that time When FNFA came on line TRTFN worked hard to use FNFA money to buy out the expensive sub debt We were able to meet FNFA/FMB requirements with internal forces and then had legal review done We bought out the expensive sub debt with FNFA financing On $2M we saved over $100k per year!!!! 100k annually that now stays in Sunny Atlin!!

102 Generation for Generations Atlin Hydro Project Lessons Learned You can do much of the development work in house (supervised by professionals if needed). 1. TRTFN provided fisheries and wildlife expertise for the biological impacts assessment. 2. Rather than hire a company to do it all, we hired them to train our people to do all the hydrology work. 3. Other areas we did in-house: Project Management, Administration, Technical Reporting, Field Recon, Preliminary Mapping, Photography. This helps increase owner equity, provides local employment, and builds HR capacity.

103 Generation for Generations Atlin Hydro Project Lessons Learned The owner must plan for: multi-year dedicated commitment of resources. Continuity of FN Leadership support Multi year project champion (project team, coordinator or manager). Getting community support and involvement. Appropriate technical support to address knowledge gaps. Cost of financing, to get it, and interest rates to be paid long term, and how those costs marry to project revenues (PF surcharge) Need to learn and understand long term financing

104 Generation for Generations Atlin Hydro Project Contact Information: Peter Kirby President & CEO Phone: Xeitl Limited Partnership Box 408, Atlin BC, V0W1A0