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VANCOUVER, BRITISH
COLUMBIA--(Marketwire - July 30, 2009) - NaiKun Wind Energy Group Inc.
(TSX VENTURE:NKW) distributed a quarterly project update to
shareholders after the close of markets yesterday. The content of the
update appears below.
NaiKun Wind Quarterly Shareholder Update
Welcome to the NaiKun Wind Quarterly Shareholder Update for
July-September 2009. The focus of this issue will be on the decision
released this past Monday by the British Columbia Utilities Commission
(BCUC; BC's electricity industry regulator), as our share price
suffered seriously in its wake and we feel that investors may be acting
on inaccurate information. In addition, we will explain progress made
with several key development objectives, including our environmental
assessment and strategic partnering.
Interpreting the BCUC Decision
On July 27, the BCUC released its decision on the numerous aspects of
BC Hydro's long-term acquisition plan (LTAP), a set of electricity
demand forecasts, conservation programs and resource acquisition
recommendations. The content of the ruling came as a surprise to many
in the industry. The BCUC declined to endorse several key elements of
the plan, saying, "The commission panel believes that the parts of
the LTAP it has rejected represent a level of individual and collective
materiality that removes the underpinnings of the entire 2008
LTAP." In its next sentence, it stated that it was rejecting the
plan.
What ensued was a wave of confusion among power developers and analysts
regarding the future of the Clean Power Call. Unfortunately, news media
and other reports emerged suggesting that the Call was in jeopardy and
might be cancelled altogether. For multiple reasons, this is a
misinterpretation.
Although the BCUC rejected the LTAP, it stated clearly in more than one
section of its report that BC Hydro is free to move forward with the
Clean Power Call and award Electricity Purchase Agreements as it sees
fit. There is no ambiguity in the BCUC ruling: it rejected the LTAP and
declined to provide Commission endorsement of any specific GWh target
for the Clean Power Call, but did not reject the Clean Power Call or
the need for clean energy. Another misinterpretation prevailing in the
media is that the BCUC rejected the BC Government's Energy Plan. In
fact, part of the reason the Commission rejected numerous elements of
the LTAP is that they were not consistent with the policy directions of
the BC Energy Plan. The Energy Plan provides guidance to the Commission
in its review of BC Hydro.
Officials from the Government of British Columbia have advised NaiKun
Wind that the government remains committed to moving forward with the
Clean Power Call. They made it clear that the government is firmly
committed to the BC Energy Plan and that development of clean energy
resources in the province remains a priority. Comments to this effect
are beginning to appear in the media, and the province's energy
minister made the decision to speak with equity analysts covering the
sector to clarify the government's position.
At over 250 pages, the BCUC report is quite long and BC Hydro will need
time to assess its content and determine the next step in acquiring
energy for the province. As we await a statement bringing further
clarity to the process, we take confidence knowing that British
Columbia's government remains committed to building on the province's
legacy as a leader in the development of clean energy resources.
Environmental Assessment
NaiKun Wind's project must undergo a rigorous environmental review
prior to moving into the construction stage and we spent much of 2008
and the early part of 2009 preparing our Environmental Assessment
application for Phase 1 for submission to British Columbia's
Environmental Assessment Office (EAO). On May 20, we received official
word that our application had been accepted (no small feat) and that
the assessment was officially under way.
As the assessment process moves forward in accordance with legislated
timelines (180-day limit for joint assessment review by the responsible
provincial and federal agencies and 45 days for provincial/federal
ministers to grant approval), we are on track to receive environmental
approval and permitting by the end of 2009. The environmental
assessment being conducted by the Haida Nation follows a similar
process and timeline.
Since acceptance of the application we have completed open houses in
Prince Rupert, Masset and Queen Charlotte City (organized by the EAO to
gather opinion directly from residents of Haida Gwaii and Prince
Rupert) as well as Haida community meetings in Old Massett and
Skidegate. NaiKun Wind representatives and its consultants who authored
the environmental studies that formed part of the application were on
hand at each of the open houses and community meetings to explain the
project. Questions and feedback point to support for the project
overall and for NaiKun Wind's program for ongoing monitoring, with
clear interest from residents in being kept informed as plans evolve so
everyone can be confident that the project is developing in a
responsible manner that minimizes impacts and maximizes benefits.
In early August, a consultation summary report will be submitted by
NaiKun Wind explaining progress with the assessment to date and what
the next steps will be. Forming part of the summary report will be a
table summarizing the many comments submitted to the EAO during the
public comment period, which ended July 12. In addition, NaiKun Wind
will prepare a response to each comment which, together with the
summary report, will be publicly available on the EAO website and
NaiKun's website.
Early Construction Planning
At this point in development, it is important to begin assembling the
right team to plan and undertake project construction and we are
speaking with several world renowned companies that would support our
contracting effort as we move into the building stage. Our plan has
Siemens responsible for both supply and installation of the turbines
and HVDC transmission system, with other resources handling procurement
and installation of turbine foundations, inter-array cables, scour
protection, management of staging areas and general project oversight.
We are currently in discussions with a shortlist of companies that can
assist us in management and implementation of the project as a whole
and of the specialized marine construction activities. We expect to
make a final decision in the near future.
Strategic Partner Selection
Another high-priority file for us over the next quarter or two is selecting
a second strategic/equity partner for Phase 1. NaiKun Wind's strategy
from the outset has been one of leveraging our role as project
developer and we thus seek to bring a second strategic partner on board
to join ENMAX Corporation and NaiKun Wind as Phase 1 owners.
Ideally, the new partner will bring specific strategic value that
enhances our potential for success in important ways. We are continuing
discussions with a number of parties regarding potential investment and
support.
Conclusion
The NaiKun Wind team is continuing to achieve its internal development
objectives on schedule and with each passing month we grow more
confident in the future of our project and its potential to bring
significant benefits to local communities and the province of British
Columbia as a whole. We are also confident the Clean Power Call will
move forward and that BC Hydro and the provincial government will soon
determine how to proceed. Additionally, the government reiterating this
week that it does not want to make greater use of the Burrard Thermal
natural gas-fired generating facility bodes well for the size of the
Call.
We are heartened that British Columbia continues to exhibit strong
leadership in environmental stewardship and economic development
through clean energy in the implementation of its Energy Plan. Our
province is in good company to be sure, with Ontario exhibiting similar
vision through its Green Energy Act, 2009 and the United States
progressing with the American Clean Energy and Security Act.
NaiKun Wind continues to move forward with multiple initiatives that
add value to the corporation, while at the same time conserving cash
($19.52 million as of March-end) until the day we have a power sale
agreement in place. I hope you'll be watching closely as an exciting
second half of 2009 unfolds for NaiKun Wind.
Sincerely,
Paul Taylor, President and CEO
NaiKun Wind Energy Group Inc.
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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