East Bay Wind Power Project May 21, 2014 East Bay Hills Wind Power Project Cape Breton, Nova Scotia ENVIRONMENTAL ASSESSMENT REGISTRATION DOCUMENT Proponent Cape Breton Hydro Inc. Report Prepared by May 21, 2014 East Bay Hills Wind Power Project May 21, 2014 THIS PAGE INTENTIONALLY BLANK 2 East Bay Hills Wind Power Project May 21, 2014 Environmental Assessment Registration Document Name of Project: East Bay Hills Wind Power Project Location: East Bay Hills, Cape Breton Regional Municipality, Nova Scotia Size of the Project: Up to 50MW Proponent: Cape Breton Hydro Inc. Report Prepared by: McCallum Environmental Ltd. 3 East Bay Hills Wind Power Project May 21, 2014 ACKNOWLEDGEMENTS Cape Breton Hydro Inc. (a subsidiary of BluEarth Renewables Inc.) gratefully acknowledges the contributions to this report by the following: McCallum Environmental Ltd. Nortek Resource Solutions Davis McIntyre & Associates Membertou Geomatics Ltd. Boreal Environmental Unama’ki Institute of Natural Resources Hatch Energy Pinchin Leblanc CBCL Limited Andrew G. Horn, PhD. The reader should note that the project area started undergoing assessment in 2008 by CBCL and Pinchin Leblanc and Andrew Horn, PhD. In this 2014 report background information that was collected by those, or others is included, and perhaps without direct reference. This was done because the assessments that provide the basis for conclusions in this report were conducted for the same project lands unless otherwise noted. 4 East Bay Hills Wind Power Project May 21, 2014 EXECUTIVE SUMMARY Cape Breton Hydro Inc. (a subsidiary of BluEarth Renewables Inc.) is proposing to construct and operate a wind power project with the capacity to generate up to 50 megawatts (‘MW’) of renewable energy (the “Project”). The Project is referred to as the East Bay Hills Wind Project. The Project is expected to generate power from up to 31 GE-1.68 wind turbines (“WT”) each with a nameplate capacity of 1.68 MW. Headquartered in Calgary, Canada, BluEarth Renewables Inc. (‘BluEarth) is a private independent renewable power producer, focused on the acquisition, development, construction and operation of wind, water, and solar projects in North America, with a primary focus in Canada. With the most experienced renewable energy development team in Canada, BluEarth’s mission is to be the Canadian renewable energy leader by developing, building, and operating a portfolio that optimizes people, planet, and profit. BluEarth believes it has the power to change the future by demonstrating how to be sustainable and profitable, leaving the world a better place. The Company has a growing portfolio of renewable power generation facilities, including one solar facility as well as an interest in eight hydroelectric facilities, as well as five projects in various stages of development. In 2011/2012, BluEarth acquired Cape Breton Hydro Inc. (“CBHI”) from Cape Breton Explorations Ltd., which had previously proposed the development of a hybrid wind/hydroelectric pump storage power generating facility in the same general location as the currently proposed project. Upon completion of the acquisition, BluEarth confirmed the abandonment of the hydroelectric pump storage component of the facility. The Project is located on the hills above Lake Uist, located approximately 50 km southwest of Sydney Nova Scotia, on a large parcel of provincial Crown land near East Bay, Cape Breton Island, Nova Scotia. This Project is considered a Class I undertaking under the Nova Scotia Environmental Assessment Regulations. A Class I undertaking is defined as an “electrical generating facility which has a production rating of 2 megawatts or more derived from wind, tides, or waves”. As such, the Project is required to register for environmental assessment as identified under Schedule A of the Environmental Assessment Regulations (Nova Scotia). This Project is being developed in response to the Government of Nova Scotia introduction of the Electricity Reform Act (2013). It is CBHI’s understanding that the Act, and associated regulations will allow for the sale of electrical energy from Renewable Energy, which specifically include wind power. The regulations would permit licensed “retail suppliers” (i.e. CBHI) to sell renewable low-impact electricity generated within NS directly to “retail customers” within NS. Furthermore, CBHI is being developed for potential RFPs that may be brought by the Nova Scotia Government. Between 2007 and 2010, environmental assessment work continued on the Project. Between 2010 and 2014, Cape Breton Hydro Inc. complemented those past studies and the results support the conclusions in this assessment. The following is brief summary of findings: The Project Area is approximately 2829 hectares. The lands are mostly disturbed forested areas but does support other habitats including wetlands, disturbed habitats and waterbodies such as ponds and streams. Forests in the Project Area consist mainly of softwood stands (976 ha, 36% of the Project Area) followed by mixedwood (290 ha, 11 %) and hardwood stands (116 ha, 4 %). The Project Area has been harvested for timber in the last 10 years (762 ha, 28%). Existing forestry roads within the Project lands encompass 16.85 hectares (0.6%). Total existing disturbance (i.e. 5 East Bay Hills Wind Power Project May 21, 2014 roads + clear-cuts) within the Project lands is 780 hectares (29%). There is no active agricultural land present within or adjacent to the Project Area. Land use within the Project area is for timber harvesting and hunting/recreation. No other land uses are present. Adjacent land use is similar, with the exception of an overhead 340 kV power line running adjacent to the southern boundary. All Project lands are owned by the Nova Scotia Department of Natural Resources. The total footprint that will result from the Project infrastructure is estimated at 144 hectares. However, 22 hectares of this footprint is existing forestry roads that will be used. Furthermore, 46.48 hectares of proposed infrastructure was moved into clear-cuts to limit further impacts to habitat and future land use. Therefore the total new impact resulting from Project infrastructure is 75.23 hectares. This 75 hectares is only 3% of the total project land area. The existing length of forestry access roads on the Project lands is 21,063 metres. An additional 15,284 metres of road will be constructed for this Project. Of this 15,284 metres, 8190 metres is located in clear-cuts to reduce impacts to vegetation and wildlife. Therefore 7094 metres of new linear cut is required. In May 2012, a total of thirty-one candidate turbine site locations were assessed. Of the 31 sites assessed, 14 were located in disturbed sites that had been previously logged. These sites were characterized by recent (<10 year) timber harvesting operations, leaving very little canopy coverage, other than the occasional mature legacy tree or wildlife clumps. Five proposed turbine locations were within intolerant hardwood stands, 2 located in tolerant hardwood stands, and 6 were proposed within varying softwood stands. Four candidate turbine sites were located within wetland habitat. Since initial assessments were completed in 2012, a detailed design review occurred which took into account environmental constraints. The project team strived to relocate candidate turbine locations from intact forest stands into disturbed areas (i.e. clear-cuts) and from wetland habitats into upland habitat. The candidate turbine locations were reassessed in 2013. Of the 31 candidate turbine locations, 24 are now located in disturbed habitats with the remaining in existing forest stands. With the exception of Boreal Felt Lichen, no other rare plant species that were identified during a desktop analysis, or interviews with DNR, were found in the 2012 or 2013 field assessments within the Project footprint. As a result of Boreal Felt Lichen being found within the Project lands during previous surveys for the Port Hawkesbury Mill harvesting operations, a specific assessment was completed for Boreal Felt Lichen. Following identification of Boreal Felt Lichen in the field, a 100 metre setback was imposed as a protection buffer, and no infrastructure is proposed within this buffer. Deer wintering habitat is the only species specific significant habitat within the Project area, but the extent of this habitat is limited in the Project area. All turbines and proposed access roads are located greater than 100 metres from open water lake boundaries. 6 East Bay Hills Wind Power Project May 21, 2014 The landscape within the East Bay Hills Wind Power Project area is positioned at a primary watershed divide [Salmon & Mira River, and Grand River] and is generally flat at the top of the plateau. Where topography is flat or at a low slope, wetland formation is prominent given the headwater position and soil types within the development area. Fifty wetlands were identified that lie within or adjacent to proposed project infrastructure. These wetland boundaries were assessed where they intersect with proposed project infrastructure. Studies of the wetlands for species at risk during vegetation surveys did not reveal the presence of species at risk in any wetland encountered. Wherever possible, turbines and access roads have been moved to avoid wetlands. However, due to the terrain and topography within the Project area, all wetlands cannot be avoided. For the Project to proceed, development in some wetlands will have to occur. Extensive field assessment work was completed