Plutonic Power Corporation

Plutonic Power Corporation

May 15, 2009 06:00 ET

Plutonic Power Issues Progress Update and First Quarter 2009 Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 15, 2009) - Plutonic Power Corporation (TSX:PCC) announced today a progress update and its financial results in Canadian Dollars for the first quarter ended March 31, 2009.


Of particular importance to the independent power industry in British Columbia was the re-election of the British Columbia Liberal Party, led by Premier Gordon Campbell, on May 12th. The Government has reiterated its commitment to becoming a global clean energy powerhouse. The Government's plan to accomplish this includes achieving electricity self sufficiency for British Columbia by the year 2016, with at least 90% of the electricity coming from clean renewable sources, including run-of-river hydroelectric generation facilities. The election results have provided the British Columbia Government with a renewed mandate to continue to include private sector investment to achieve its self sufficiency and clean energy goals. The election result has provided increased investment certainty in British Columbia for Plutonic Power.


Plutonic Power's 196 megawatt (MW), $660 million East Toba River and Montrose Creek run-of-river hydroelectric project (Toba Montrose), being built with our partner GE Energy Financial Services by the Toba Montrose General Partnership (TMGP) in conjunction with our First Nations partners, the Klahoose, Sliammon and Sechelt First Nations, is fully financed, on-budget and on-schedule to reach commercial operation during 2010. All the electricity to be generated from Toba Montrose will be sold to the British Columbia Hydro Authority (BC Hydro) under a 35-year sales contract.

In February 2009, TMGP and the Government of Canada formally signed an agreement under the ecoEnergy for Renewable Power program. This program provides incentive funding to increase Canada's supply of clean electricity from renewable sources, including low-impact hydro projects such as Toba Montrose. Once complete, Toba Montrose is expected to generate 727 gigawatt hours (GWh) of electricity annually net of transmission line losses, which will entitle TMGP to receive up to $72.8 million in funding under the ecoEnergy program during its first ten years of operations based on one cent per kilowatt-hour of electricity generated by Toba Montrose and sold to BC Hydro.

Other noted milestones during the first quarter of 2009 include:

- Continued excavations for the East Toba and Montrose powerhouses, and poured 4,200 cubic meters of concrete at East Toba.

- Began excavation for East Toba and Montrose penstock trenches in preparation for penstock installation.

- Received 366 penstock pipe sections, turbine runner pit housings, turbine distributors, and transformers at the site.

- Installed 21 km of transmission line conductor.

- Completed 844,000 cumulative project person-hours of work, approximately one-third of which was contributed by local and First Nations hires.


Noted recent milestones include:

- In early April 2009, the Company was granted a Provincial Environmental Assessment Certificate for the Upper Toba Valley Project.

- In early May 2009, the Federal Minister of Environment approved the Terms of Reference for the Bute Project's Federal environmental assessment process, which will be proceeding by way of panel review, together with the Project's Environmental Impact Assessment Guidelines.


For the first quarter ended March 31, 2009, Plutonic Power (the Company) incurred a net loss of $11.3 million ($0.26 net loss per share) compared with a net loss of $2.7 million ($0.06 net loss per share) in the same period in 2008. The Company's net loss for the quarter ended March 31, 2009 is comprised of $9.2 million (March 31, 2008 - $1.8 million) of non-cash expenditures, including share based compensation, share based guarantee fees, power project development costs written off and an unrealized loss on the fair value adjustment of interest rate swaps, and $2.1 million (March 31, 2008 - $0.9 million) of cash operating expenditures.

The Company and its TMGP partner, GE Energy Financial Services, signed an amendment to the TMGP partnership agreement which resulted in a reallocation of the gains and losses arising from the change in fair value of TMGP's two interest rate swap contracts. As a result, in March 2009, the Company recorded $8.8 million in unrealized losses from the change in fair value of the two interest rate swaps. See note 7 in the interim consolidated financial statements for more details. If and when interest rate trends reverse, the Company would record this reversal in the form of unrealized gains. In addition, as the short term interest rate swap contract approaches its maturity in November 2010, the Company expects to record additional reversals in the form of unrealized gains as the fair value of the interest rate swap decreases to nil on maturity.

The Company incurred higher operating costs to support the Company's increased development and growth activities related to the increased number of power projects under advanced development.

Excluding its proportionate share of Toba Montrose cash and working capital, as at March 31, 2009, the Company had $22.1 million in cash and $19.7 million in working capital.

As at March 31, 2009, the Company had recorded $90.6 million in long term debt, $131.5 million in property plant and equipment and $5.0 million in intangible assets, based on its 40% share in TMGP. The long term debt is secured by the assets of TMGP and is nonrecourse to the other assets of the Company.

This financial summary should be read in conjunction with the Company's March 31, 2009 unaudited consolidated interim financial statements and Management's Discussion and Analysis, both of which are available on and on the Plutonic Power Corporation web site at

About Plutonic Power Corporation

Plutonic Power's vision is to provide leadership and create a legacy through the development of renewable, reliable, clean energy. Its proposed Green Power Corridor™, comprised of 40 locations, not including the flagship $660 million, 196 MW East Toba River and Montrose Creek run-of-river hydro-electric project currently under construction, has the design capacity to generate enough energy to meet the annual needs of about 586,000 homes and create approximately 5,900 person years of employment. Once built, the Green Power Corridor™ could offset almost 4 million tons of CO2 emissions every year - the equivalent to taking as many as 760,000 vehicles off the road. Plutonic Power is committed to working in partnership with First Nations, stakeholder groups and local communities in the development of all of its run-of-river projects. Plutonic Power will help British Columbia realize its goals of becoming electricity self-sufficient by 2016, utilizing 90% clean domestic generation sources that will create employment opportunities and play a significant role in the fight against climate change.

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

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