Hupacasath First Nation

The Hupacasath First Nation (HFN) is a member of the Nuu-chah-nulth Tribal Council. Its traditional territory spans 2290 square kilometres, including the entire Alberni Valley on Vancouver Island. Currently, HFN has five reserves on 230 hectares (570 acres), with approximately half of its 300 members living on two reserves, one in Port Alberni and another near Sproat Lake. HFN operates under the Indian Act political governance model of an elected Chief and two Councillors, with elections every two years.

When its Upnit Power Corporation (UPC) began generating power on China Creek in 2005, HFN became the first Indigenous community in BC to be majority-owners and operators of a hydro project in BC. Today, the project is hailed as a model of Indigenous resolve, environmental stewardship and an ability to create mutually beneficial partnerships with industry, municipal government, financial institutions and other First Nations.

A better way to create a power project

Hupacasath First Nation’s journey to becoming the leading Indigenous authority on hydroelectric power projects actually begins with HFN voicing its opposition to another proposed power project in the Port Alberni area.

In 2001, BC Hydro and Calpine, a California-based power company, proposed a natural gas-fueled generation plant in Port Alberni, known as the Port Alberni Generation Project (PAGP).

It was the second time a controversial power project had been proposed on or near Hupacasath traditional territory. In the mid-1990s, BC Hydro had dropped plans for a natural gas-fired power plant at Duke Point near Nanaimo amidst rising natural gas prices and opposition over environmental concerns.

PAGP met with considerable opposition. In addition to HFN issues, environmentalists raised concerns related to air emissions. At public hearings regarding the rezoning of the land for the project, Chief Judith Sayers spoke on behalf of the Hupacasath First Nation. In a speech that earned her a standing ovation, Sayers recognized Port Alberni’s need for jobs and a revitalized economy, as well as Vancouver Island’s need of electrical power, but suggested there was a better way to create a power project, both in terms of consultation with stakeholders, as well as in the project’s environmental impact.

China Creek

By 2001, Hupacasath First Nation’s economic and community development were guided by its land use plan, community plan and economic development plan, into which 92 per cent of community members had provided input through meetings and surveys. The plans identified sustainable resource and energy development as key priorities.

When PAGP was abandoned soon after the hearings, it left the Alberni Valley still in need of new power. Having suggested there was a better way to approach power projects, HFN now set out to prove it. What’s more, they didn’t just want be part of the solution, they wanted to lead it. It was an opportunity to demonstrate their capacity as a people, and also ensure that the next power solution for Port Alberni would provide them with economic benefits, while having minimal environmental impact on their traditional territory.

In the summer of 2001, HFN undertook a hydrological survey of their traditional territory, which looked at water flow and volumes of local waterways. The study was conducted by Sigma Engineering, a subsidiary of Synex Energy, and funded, in part, with a grant from the Pembina Institute, a BC-based environmental research and advocacy organization. The hydrology assessment identified 10 watersheds that would be commercially viable for run-of-river projects.

The preferred site was at China Creek, located approximately five kilometres south of Port Alberni. The site was selected because its location had several advantages for development, including:

  • As China Creek was a source of water for Port Alberni, the City had a monitoring station on the creek, which could provide HFN with ten years of water flow data. With that data, HFN could prove China Creek had enough flow to generate the power they wanted without having to conduct their own multi-year study.
  • The proposed site, above impassible falls that blocked the ability of fish to reach it, meant there would be little to no impact on salmon.
  • The land was owned by Island Timber and Timber West and already had road access to the site.
  • An existing three phase power connection near the proposed powerhouse provided an easy connection to the electricity grid.

The proposed project would be a 6.5 megawatt (MW) green run-of-river facility where water would run 4.5 kilometers down a five-foot wide underground penstock (pipe) to a powerhouse where the water would turn turbines generating power. That power would be directed from the powerhouse to the grid, generating enough electricity at peak operation to power 6,000 homes.

Upnit Power Corporation

As an equity-poor First Nations community operating under the Indian Act, HFN needed partners that could provide the expertise and equity to make the project a reality.

The City of Port Alberni was an obvious choice, given its interest in China Creek as the City’s source of water. Port Alberni’s participation would also be required for site access and obtaining the water license.

Through its subsidiary, Sigma Engineering, Synex Energy was already familiar with the project’s technical merits and HFN’s commitment to the project. Synex could contribute valuable technical and operating expertise.

After two years of discussion, Hupacasath First Nation created the Upnit Power Corporation (UPC), a limited partnership owned by the HFN (72 per cent), Synex Energy (12.5 per cent), Ucluelet First Nation (UFN) (10 per cent), and the city of Port Alberni (5 per cent). Its board included five directors: two from Hupacasath, one from Synex, one from UFN and one from Port Alberni.

In 2003, Upnit entered a 20-year Energy Purchase Agreement to supply power to BC Hydro in response to its 2002/03 Green Power Generation (GPG) Call for Tenders.

The $14-million China Creek project was financed with $5 million in equity and $9 million in debt financing, which was facilitated by UPC’s Energy Purchase Agreement with BC Hydro.

Funding sources included:

  • Indian and Northern Affairs Canada’s Economic Development Opportunities Fund (EDOF) ($2 million equity grant)
  • Indian and Northern Affairs Canada’s Aboriginal and Northern Community Action Program (a greenhouse gas reduction program) ($250,000 grant)
  • Western Economic Diversification Canada’s Softwood Industry Community Economic Adjustment Initiative ($945,000 loan)
  • VanCity Capital ($8.5 million debt syndicate)

Construction of the China Creek project lasted 13 months. The facility began generating power on December 5, 2005, and since then HFN has been responsible for its day-to-day management.

As a penstock operation, limited manpower is required to run the facility. It currently employs two HFN members as plant manager and assistant. Since the facility began operations, additional HFN members have taken the Aboriginal Skills Group’s Independent Power Plant Operator Technical Training Program in Sechelt and worked at the facility.

With only 50 homes on its reserve in Port Alberni, HFN sells Upnit’s excess power to the grid. UPC will provide revenue to the band once the debt is retired. China Creek is the largest Nuu-chah-nulth-owned economic development project and it continues to be the only hydro project in the province operated by a First Nation.

Fisheries

The Hupacasath First Nation is also involved in a commercial fisheries corporation partnership with the Tseshaht First Nation (TFN), who are also members of the Nuu-chah-nulth Tribal Council. The partnership, called Tsumas Seafood, was made possible through funding by the Department of Fisheries and Oceans Canada (DFO) and its Pacific Integrated Commercial Fisheries Initiative Canada (PICFI) program.

PICFI is aimed at achieving environmentally sustainable and economically viable commercial fisheries that provide increased opportunities for First Nations involvement. The $175-million program was originally slated to run between 2008 and 2012, but was extended one year to March 31, 2013 as part of the 2012 federal budget and Economic Action Plan.

With equal partnership, HFN and TFN receive expanded access to marine resources through $2 million in quotas and licenses. The partners are currently looking at value added opportunities for the venture such as an ice plant, smoking operations and custom processing.

Forestry and Tourism

On the forestry side, Hupacasath First Nation has several economic development opportunities and potential partnerships on the horizon.

In July 2012, HFN signed an agreement with the Province, which increased its access to timber from 400 to 2,400 hectares, and allowed for the development of new tourism opportunities. The agreement compensates HFN for the 2004 removal of 70,000 hectares of land from Tree Farm License 44 on Hupacasath traditional territory. The agreement gives HFN:

  • An 800-hectare First Nation Woodland Licence and 20,000-cubic metre short-term non-replaceable forest licence at Great Central Lake.
  • One new woodlot tenure at Sproat Lake and an expansion of the Hupacasath Woodlot Licence.
  • $305,000 over five years for consultation purposes.
  • Replacement of its 400-hectare woodlot with a 500-hectare woodlot in the Beaver Creek area.
  • Establishment of a Collaborative Forest Council, providing HFN with greater input in land management issues on its traditional territory.
  • Recreational and sustainable tourism opportunities at Great Central Lake.

HFN has since hired its own professional forester and is building a portable saw mill at Great Central Lake.

With access to lots on Great Central Lake for recreational development, HFN is now exploring potential float home projects. To that end, HFN is developing lake standards on a wide variety of issues, including sewage, and the more than 40 float homes currently on the lake will be moved to one of three locations that HFN will operate.

Eagle Rock Quarry Project

The Eagle Rock Quarry Project is an aggregate extraction project owned by Polaris Materials (70 per cent), Hupacasath First Nation (10 per cent) and Ucluelet First Nation (10 per cent), with 10 percent held in trust. The project entails extracting granite at a quarry 15 kilometers south of Port Alberni and shipping it to California to produce asphalt and concrete.

In 2002, drilling tests confirmed granite resources of 757 million tons. The following year, the project received an Environmental Assessment Certificate and Mine Permit, for the production of 6.6 million tons per year, which, at the permitted production rate, suggests a potential life for the quarry in excess of 100 years.

While Eagle Rock Quarry has the potential to become one of the largest aggregate quarries on the west coast of North America, the project is on hold due to market weakness in Polaris Materials’ primary market of California. To date, Polaris has paid for all costs related to the quarry project, with Hupacasath and Ucluelet First Nations not scheduled to provide any equity until construction would take place at the quarry site.

Final quote:

From energy projects and forestry to fisheries and mining, partnerships have played a key role in the economic development of the Hupacasath First Nation. HFN’s belief in the power of partnerships was best described by former Chief Judith Sayers in a 2005 interview:

“Anything is possible if you have a good support network and good relations with people,” said Sayers. “Find the best project possible and the best people to work with, contractors, engineers, and lawyers. Surround yourself with supportive people. That is the key to your success in getting a project off the ground.”