Plutonic Power Corporation

Plutonic Power Corporation

December 21, 2006 09:31 ET

Plutonic Power Executes Term Sheet With the Klahoose First Nation on East Toba and Montrose Creek Projects

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 21, 2006) - Plutonic Power Corporation (TSX VENTURE:PCC) is pleased to announce that it has achieved a significant milestone that will help expedite the construction of the East Toba River and Montrose Creek run of river hydroelectric projects. Plutonic has signed a term sheet with the Klahoose First Nation which sets out the essential terms of an Impact and Benefits Agreement ("IBA") to be finalized between the two. Pursuant to the IBA the Klahoose First Nation will support Plutonic's construction and operation of a 196 megawatt run of river hydroelectric power project (the "Project") in the Toba River Valley area within the Klahoose traditional territory. Members of the Klahoose community have ratified the terms and conditions of the Term Sheet.

Plutonic and Klahoose will establish a Project Liaison Committee to facilitate development of the Project. In constructing the Project, Plutonic will recognize and respect Klahoose assertion of aboriginal title and rights, archaeological sites and artifacts and Klahoose traditional use in the area, and will provide Klahoose members with opportunities for employment, training and contracting. Klahoose will receive cash payments from Plutonic during construction of the Project and for the first 35 years after completion, and an annual royalty on revenue thereafter. Plutonic will be entitled to access to the Project site through Klahoose IR#1 and Klahoose traditional territory, and Klahoose will consent to and not impede, hinder or dispute the construction or operation of the Project. Klahoose will also consent to the issuance of an environmental assessment certificate and other necessary licenses, permits and authorizations for the Project.

Plutonic Power is an emerging renewable energy producer in British Columbia. Its proposed 22 run of river projects have a design capacity of over 870 MW and the potential to generate approximately 2900 GW.h per annum of green energy, enough energy to meet the annual energy needs of approximately 300,000 homes. Included in the 22 projects is the creation of the Green Power Corridor, a series of non-storage hydroelectric projects in southwestern BC, which hold the potential to catapult British Columbia to the forefront of green energy generation in North America. The completion of the Green Power Corridor would be financed through one of the largest single private sector green energy investments ever made in British Columbia and would create over 3,000 person-years of employment.

Plutonic is committed to continuously work with First Nations, stakeholder groups and local communities in the development of its run of river projects.

On behalf of the Board of Directors

Donald McInnes, President

Caution Regarding Forward-Looking Statements - This news release contains certain forward-looking statements, including statements regarding the business and anticipated financial performance of the Company. These statements are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements. The Company does not undertake to update any forward-looking statements, oral or written, made by itself or on its behalf.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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