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The Aboriginal Advantage (Procurement)

The Aboriginal Advantage (Procurement). OPG was created in 1999 from the assets of Ontario Hydro. 2. Who and Where We Are. 19,051 MW generating capacity 65 hydro, 2 nuclear, 5 thermal 2 leased nuclear stations Produces about 60% of Ontario’s electricity 10,800 employees

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The Aboriginal Advantage (Procurement)

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  1. The Aboriginal Advantage (Procurement)

  2. OPG was created in 1999 from the assets of Ontario Hydro 2

  3. Who and Where We Are • 19,051 MW generating capacity • 65 hydro, 2 nuclear, 5 thermal • 2 leased nuclear stations • Produces about 60% of Ontario’s electricity • 10,800 employees • 2012 net income – $367 million • 2012 revenue – $4.7 billion • Over $37 billion in assets • Investment Grade credit ratings • Ontario’s low-cost electricity producer

  4. OPG Nuclear GS OPG Thermal GS OPG Hydro Facility OPG Hydro Dam First Nations Reserves 4

  5. The Aboriginal Advantage • Resolving past issue between OPG and First Nation communities is the “right thing to do”. This changing the starting point of the relationship between OPG and First Nation and Métis communities and also helps mitigates project and operational risks . • Recent Supreme Court decisions have changed the nature of the working relationship with Aboriginal communities (Duty to Consult) • Healthy relationship with Aboriginal Communities aids in a predictable renewal of our operational licenses and regulatory requirements. • OPG has been mandated to explore new Hydro Business Development opportunities. OPG is looking to develop these opportunities in partnership with First Nation communities. • Having an effective Aboriginal Relations program is seen as “table stakes” for resource development in Canada • Corporate Social Responsibility /Sustainable Development /Social Licence (We have control over the nature of our relationships)

  6. OPG’s First Nations and Métis Relations Policy • OPG is committed to building long term, mutually beneficial working relationships with First Nation and Métis communities proximate to its present and future operations • OPG is committed to continuing efforts to reach mutually satisfactory resolution of grievances with respect to past generation related development • Where appropriate, OPG will pursue prospective generation related developments with First Nation and Métis communities that can provide the basis for long term, mutually beneficial commercial arrangements • OPG is committed to community outreach, capacity building ,and employment and contracting opportunities 6

  7. Contracting Opportunities There are two streams for Procurement at Ontario Power Generation: 1. Projects: Major construction projects (Lower Mattagami) 2. Operations: Related to our ongoing operations (Bio-mass)

  8. Lower Mattagami Hydroelectric Expansion Project • Partnership with Moose Cree First Nation for up to 25% ownership • 438MW, hydroelectric development ($2.6B) • Employment and contracting opportunities • 350 person years of Aboriginal employment and counting

  9. Lower Mattagami Contracting Successes • Set aside work; First bid rights for EA First Nation businesses where existing business capacity was identified. • Unbundling requirements on the Design Build Contractor to provide further opportunity to small businesses and entrepreneurs. • Price preference (10%) on all sub-contracting opportunities (EA requirement) • Support; for Aboriginal contactor to participate in bidding process. Contracts included: Catering, Security, Batch Plant, Roads Drill & Shoot, Hydro Seed, Air Carrier, Land Freight, Electrical, Surveying, Clear/Grub, Camp, Bussing, Roofing, etc. Total value to date: approximately $280M

  10. Key Operational Successes OPG’s contract for supply of wood pellets for our Atikokan GS • Up to 20% weighting preference was provided for Aboriginal participation in the bidding process. • The two contracts awarded both have First Nation partners.

  11. Best Practices • Potential Tools: • Set asides • Price Preference • Weighting Preference • Unbundling • Capacity support Program Considerations: • Competitive bidding process must be maintained • Must work within existing supply chain processes with exceptions where appropriate. • A good working relationship and early communication with all parties (contactor, unions, owner) is critical to success. • Capacity support should not be underestimated in driving success. • Utilizing best practices will foster long-term success for Aboriginal communities by addressing barriers.

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