2008 FM Global Annual Report Canadian Hydro Developers client by klutzfu59

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									             Preparing for the Risks of Tomorrow    2008 ANNUAL REPORT 


Excerpt: Canadian Hydro Developers Client Profile
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          Michael Devonshire, manager of financial reporting, and Kathy Boutin, vice president, finance   Canadian Hydro developers 




Inset photo provided by McLarens Canada.                                                                                           11
Canadian Hydro developers 




      wInD power
     The three-bladed wind turbine, like this
     one installed by Canadian Hydro, is the
     most common modern design because
     it minimizes forces related to fatigue.

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Canadian Hydro Developers, Inc., based in Calgary, alberta, Canada, is committed to Building a
sustainable Future® and is considered a working model for the Green power industry in Canada. This
environmental focus, established when the company was formed 20 years ago, is the foundation of
Canadian Hydro’s success. The company’s operations harness clean energy produced from water, wind
and biomass in a simple manner, resulting in power plants that generate sound, predictable returns for
investors. Canadian Hydro’s 10-year vision is to be the premier independent builder, owner and operator
of renewable energy projects focusing on operational excellence, environmental stewardship and growth.

Company size 20 low-impact renewable power plants with a combined net capacity of 496 megawatts;
2007 net revenue: Ca$63.8 million (Us$64 million); 2007 earnings: Ca$8.3 million (Us$8 million);
number of employees: 144

Company type public

Years with FM Global Four




w
            olfe Island, a small community             supported by specialized cargo risk engineering
            off eastern Ontario, Canada, is            services, protected the prefabricated turbines
            separated by two waterways from            as they were shipped across the Atlantic
mainland centers of industry and commerce,             Ocean. Builder’s risk insurance and project
and removed from the vigorous dialogue about           planning engineering services help minimize
the need for more clean and renewable energy.          risk during construction. And, a comprehensive
Yet, through the construction of an 11,000 acre        insurance program covers all facilities for both
(4,452 hectares) wind power installation that          property damage and business interruption.
will spread over much of its surface, Wolfe
Island, and rural locations like it, is at the heart   For wind projects like Wolfe Island, FM Global
of the issue. The company behind the new               works alongside local management to safe-
installation, Canadian Hydro Developers, Inc.,         guard the plant against harsh elements and
based in Calgary, Alberta, Canada, specializes         keep it running, while providing the insur-
in alternative energy. The Wolfe Island                ance capacity Canadian Hydro requires as a
project—one of several now underway—is                 backstop. The risks are different, but no less
expected to power more than 75,000 house-              pronounced, at Canadian Hydro’s hydroelectric
holds and businesses when all of its 86 wind           and biomass facilities, and at its planned solar
turbines are spinning and generating electricity.      projects. “The fact that FM Global can protect
                                                       and insure us in each of these technologies is
There is little doubt that renewable energy            critical,” says Kathy Boutin, Canadian Hydro
is here to stay. The technology is continually         vice president, finance, noting that the com-
being refined, presenting new property                 pany can ill afford an outage for any length
protection challenges. FM Global works                 of time. The resulting loss of revenue, reputa-
closely with the company to manage risk                tion and public confidence would be a costly
at every stage. An FM Global Cargo policy,             setback to a power provider that recognizes
                                                       the imperative of moving forward.



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                                       in THeir Words 
                                       Michael devonshire, manager of financial reporting
                                       Kathy Boutin, vice president, finance
                                       Canadian Hydro developers




      Given the unique nature of our company, it’s essential we know underwriting will be
     consistent, so we can assure our lenders, directors and shareholders we are fully covered
     and properly insured.

      With an all-inclusive policy that covers us for property and business interruption, we feel
     much more comfortable knowing we’re insured under almost any circumstance.

      Before the Wolfe island project began, we sat down and discussed the risks to expect at
     every stage of development. after that, FM Global was by our side on all aspects of our program.

      We placed more than seven kilometers (four miles) of thick cable across the floor of the saint
     lawrence seaway. it’s the first cable of its kind, and this was the first time we’ve transported
     equipment of this nature from europe. FM Global gave us key advice on cargo loss prevention,
     and covered the entire transportation risk.

      These projects are so capital- and time-intensive to get up and running that our priority is to
     prevent any loss. if we have a problem with our turbines, we have to shut down. and we would
     lose money for every second that turbine isn’t running.

      We are an unconventional power company, and will be the first to say it. FM Global knows that
     about us. They don’t just call us a utility company and treat us the same as any other.

      our approach can be described as entrepreneurial. and FM Global’s been able to meet our
     needs in a way that best fits our business. We haven’t had to force the fit.

      our strategic plan is to grow to 900 megawatts in installed capacity by 2011 and have a pipeline
     of more than 1,500 megawatts of active prospects. We know FM Global has the financial strength
     we need from an insurer as we continue to grow.

      insurance questions come up at least on a weekly basis. if we have a unique question, we know
     that, with FM Global, we can get an answer right away.

      it’s reassuring for us to work with a company that doesn’t see just a small fragment of our
     business, but understands it in its entirety.




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 CanaDa’s FIrsT
Cowley ridge, a Canadian Hydro site,
was the first commercial wind installa-
tion in Canada, built in 1993. average
production from the plant is more than
60 million kilowatt hours of electricity
per year, enough to power 8,400
typical households.




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