TAC - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the TransAlta Corporation Third Quarter 2020 Results Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Chiara Valentini, Managing Director, Investor Relations. Thank you. Please go ahead.

Chiara Valentini

Thank you, Mariana, and good morning everyone and welcome to TransAlta's third quarter 2020 conference call. and Dawn Financial and Operating Affairs Officer; Gellner, Development are Todd Executive Officer; Officer. today Chief Chief Chief Wilks, Stack, John Officer; me Farrell, and Chief President Officer; Brett Legal, With Regulatory O'Reilly External Kerry Kousinioris, Chief view websites. Today's to and the webcast that slides is invite those supporting call on are listening I phone the posted on will shortly will of available later transcript the thereafter. the website our call be be replay to A and posted today conference in call today's qualification full this subject and All to on statement the during purposes call. information in forward-looking is set Slide the provided of incorporated the for X, our here out further details MD&A All in amounts currency, are referenced unless Canadian the otherwise during call stated. free for also in The comparable used, reference. non-IFRS your terminology including flow and the reconciled cash MD&A EBITDA, operations from are funds On Todd today's overview the quarter's results, provide balance with of year. the an of call, expectations for and along will Dawn remarks, call And the after open prepared we these will questions. for over me turn With Dawn. to the that, let call

Dawn Farrell

Good thanks for on in call us morning everyone quarter XXXX. and our here third joining

clean strategy going We then becoming quarter for strategic I'm updates results as it And to and numbers. report. turn and a over and on and very we third Todd to the have accomplishments start our have with to well, number leading important I'm year-to-date Canada's of some electricity updates great provider. key of our going to

of four now by years, off power decisions that thermal being now Mine we in This on this XXXX. originally During the end gas, announced can run key natural January Highvale only the All quarter, the but XXXX of we close will XX, effective starting X, Alberta several Board and They've XXXX. made Alberta we've now goal included by management Canada decision plants the morning. December our of that XXXX. determined advances TransAlta coal

This have of supporting after on the decision project we a online made track. in year approval quarter the project the team the cash life flow, only the and has to plant Alberta be CADXXX Board State in QX, cost million we of on is pleased in contract tell XXXX. to Washington the long-term end its between and today this XXX-megawatt estimated repowering. Unit project on which In greenhouse come substantially until has gases of investment Sundance CADXXX next in the a XXXX. will and received that X fourth will and million The to Our transition final we're build and year coal I'm end advanced you Centralia, also agreement we've throughout

than invest. due as at testing. with we well. To gas our to in ambitions when alone to we help will its On are their been I our of just and very more QX couple met achieve due our is to Our We'll completed share reductions a down KX outstanding have which Paris from XXXX, begin final its tonnes We'll delivered all great year. complete XX% sets gases. finance by in us conversation COVID. KX to by And million as work commissioning a end for emissions XX% the in date, extremely of additional want tonne stronger, to almost reduce of by work next track their debt will project XXXX. greenhouse team stages by TransAlta on plans there this clear strength time Canada's be a Canadians conversions This deck also be raise the be XX.X completely gas of own uncertainty which customers Everything XXXX. for of The a our the we even be under conversions - X full liquidity, to has with the fair ESG Agreement. goal at has South front, weeks. XXX on the mid-November, Hedland, we - apart Sun about the to million proceeding more of created greenhouse reduction to have never today company our them in is are

cash We TransAlta. fund to are growth we RNW positioned our with continue the to at grow need and to

as months. to hope RNW We in have coming potential and positioned several the an announcement assets to make dropdowns

battery The we're workforce a by also renewable growing for quarter Canada pipeline team of deployment of supply innovative on developed expected the - the approval frontline system pledge, to get two - important to with growth approved expands project XXXX. also the the inclusion by which in Corporation provide point Pipeline Inclusion the deployment sell as have This foundation pointed a commercial in of clearly work us to Alberta's XXXX for female the million. a and to also which addition for at close in NGTL On Great by further and us manage storage our and entered and has goal been were we second fleet pricing We Diversity of generation by TC into - was volatility. battery a the The developed project next that side. agreement milestones which met. Board it's The storage leader future diversity updates truly and renewables' set gas Project, our on of will ATCO technologies and supply, TransAlta regulatory and team Council. new XX% the our with and Pioneer were power options our farm. future a operation of is wind our now CADXXX wind system. received our powered a wind Tidewater also decades. - in it's has We pioneer our helps what's first utility is Summerview We for with charger Expansion commercial XXXX. renewable scale transaction to

delivered importantly, investors. flow results continued free we as just excellent our cash to demonstrate but for that generate financial Finally, drive

quarter the is which row CADXXX third flow. been this in of a million cash over free we've think I

end So is are electricity congratulations after that ESG. call those sought be a should to the that working by interested and a today. By it and it or and in so. proud be who We work squared clean TransAlta of the all done call, TransAlta that in will E-ESG get SG E leader investment clear here economics the us hard we've the team very made on companies deliver very of we're to

trading TransAlta to convert and in our diversified with our portfolio work strong our have created a a to advantages clear Alberta our customers Frankly, the up and investments in Our have have the of held beat. missed interesting and RNW, our Hydro, team gas, with hasn't ownership innovative we work ownership that at pretty fleet a through team marketing XXXX.

Now, community investment know with I familiar most is of the in. investing projects the we're that

with them I updates. provide want won't couple you line a I by through go to line, but So of

is Our Skookumchuck to imminent. Wind to and completion we Project close expect operation commercial be

are option we the in ownership operation Construction advanced be is contracted commercial we mid-October. shortly in earlier, Sun our by project. XX% X, Windrise, received executed generators here wind I fourth Alberta wind thereafter. on said We're on And XXXX. and Kaybob as targeting XX% turbine Cogen on-site facility Our to quarter will and proceed began approval for receiving complete

projects we'd we you delivered. that often behind our potential we that TransAlta the they're development scenes, Now tell pipeline only about the a have what's we're and in of typically signed, because of highlight thought lot we we pretty you at terms what sealed conservative today - But of of that. once tell in and development some we

stages development. growing future. We efforts set have is potential great of megawatts that time considerable amount This business and provided This of the generate are to first is us for well the our a various XXX projects. these returns we've many details over of growth on of in up growth projects development

advance, this that all XXX to permitting a wind of continues have and from and our to to projects target transmission of megawatts to PPAs, we cash dedicated the to achieve to development development per studies, the XXX and We goal capability goal. megawatts financial prospects year staff our to have access be continues

Canada July here and carbon-neutral. customers firing testing towards as commissioning our major on our Alberta X Alberta milestone Recent and completing to of legacy for forward Clean I our step today, Plan. a thermal is our decision that a on mode. entirely this Sun This earlier Investment with boiler natural XXXX, summarized journey in XXXX. demonstrates on gas coal the Now will the delivering on of is gas XX, is further Energy in electricity announced and the chapter is us tremendous This currently in by Sundance which commitment full we be X of and in in we running that end Unit concluding moving milestones include retiring conversion upcoming their

units X, Unit Our Unit in on conversions have run be X sufficient X and Keephills gas, boiler although fully for Sundance units year and these derate we firing will Keephills to in next of ability our Unit the X gas which in serve our market fleet and to here optimize we of is repowering flex portfolio, the to ensure Sundance the and capacity all of course a can fully Alberta X. that finally, XXXX,

organization of Canadian have has Canada. achieved end as in million progress and agreements, here Now, levels Of as to tonnes gas the I'm compared to in By from and of have especially here peers in this our made will greenhouse XXXX million operations. slide, that, to the peers Canada, Alberta see our rest to of emissions tremendous the reduction XX our in Canada TransAlta comparison in from the emissions, we tonne worldwide in our fleet. an in greenhouse gas reduced to peers the XX been can rest XXXX, you across international sorry, our reducing

set to government. As Canadian contributed we've earlier, by I overall, Paris the target XX% the said

We in candidates' are to achieve supporting the are in to so, significant among and we doing Canada few companies such a reductions Paris clear in commitment Agreement. leader a very

integrate our roadmap and unprecedented electricity the these and describes that how leading supply. at technologies we're We long-term The of we them partners with power can the This we're into accelerating and with delivery energy yet. rest technologies the technology by customers outpacing province provide and pace be of green margins significant and help change conceptualizing new level. to is their country know We done renewable our in the these an customers. of not implementing are

contract recent energy with base that Cross our for Australia the replacement renewables customers to requirements customers BHP the their and Western We are operations. need working where value recognizes Southern integrating industrial need load for at and extension in supplement like

green at the potential look mid solar our here understand we're electricity. battery future that wind XXX-megawatt a prior we to dusting relooking using build-out As potential renewables It's its Alberta. supporting at the capture the here be carbon of and we'll in firm also off and potential and on economics value storage that in and XXXXs, has Alberta a start pump storage. We're provide Brazeau to work

currently make customers the are necessary technologies We to facilities invest are with Brazeau directly as in into to now with to going and in companies commercial potential they in what commercial buying see future. electricity years. customers. make that working we'd we our hydrogen, opportunities for today hydrogen, team we working more various to of available. be many coming a partners On interested and And hydrogen in become we be with power firm works who our expect readiness to plan the of the there battery creating have states are may stand substantial and be companies There investments first one dollars in like we're investments players to flow many from green may ready

Before call call. this take to want the the to a I I takeaways key turn Todd., summarize to from over moment

carefully for E environment, on economics, corporate our principle, is reduction transition gas for investors responsible their G on portfolios. E socially governance. an for and S TransAlta indisputable. be moving forward track looking should record are for ESG E squared We TransAlta's for greenhouse SG at

are ESG in into and emissions are set focused impressive investment to an moving the We to reductions deliver country. continue space

great the green to goal take We which team. long-term decade are a goal on one to a electricity firm will of is Canada's our new and renewable for focus largest us supply electricity suppliers of achieve

and innovative continue we'll be strong and And barriers. customers. We commercializing free finally, discrimination have trusted a modern record systemic a our new proven a technology from and organization committed track we're of to partner and to for building

now on more it Todd, over numbers. give So the to you will me let who color turn

Todd Stack

Thanks Dawn, everyone. good and morning

high QX is and details, I company great into comment basis. to echo to both our in that very jump position track in portfolio deliver the I range. a the your a just guidance year-to-date our we're delivered cash Before near on end of on wanted free strong performance and flow financial The

charts The XX. Slide include several at of Looking metrics. our key

of For to you residual PPA payment the payment. exclude arbitration. a year performance, to more the the last awarded CADXX will to In that provide I'm to received those X may that us third reference X figures Units that call listening, relative termination the we of comparison for Sundance was the order on recall million in going termination quarter, our PPA accurate

During CADX.XX, CADXXX the cash and the basis. cash is of free nine-month segments generated performance. contributions business at a at and so quarter, per the very at and performance versus flow flow, cash and X% is performance our in strong the free and operations, XXXX. far generated better almost XXXX laid XX% segment. capability All from XXXXs energy-marketing is our a which in very EBITDA our Year-to-date, was to strong strong our out of over increase from Free million business million flow comparable XXXX CADXXX CADXX portfolio Slide EBITDA diversification. all which share resilience million we've we by incredibly than On XX, a CADXXX QX on flow up we've also all, free of hedging cash were indicative our in of quarter million. was due year-to-date

and As for can year line the Alberta, significantly strong stable total contracts performance very provide strong more in for see, quarter segment you that last primarily made the following. and ahead technologies cash of of up performance cash well, This result and overall was were fleet flows showing Centralia we can had the a flows. The across regions, weakness performance. performed year-to-date here and diversity for with in again, segment than

to QX all cash Our the XXXX the delivering gas as outstanding American were partially segment in the expected made X, like with the in is to opportunities fleet investments performance congratulate This the to our in business later company. capture from expected QX. I this to well capitalize Their cash this segment. is Antrim Energy last energy-marketing years their cash in Ada major we've and gas as and recent in was in Segment by wind Big their ability Level and a thermal Marketing strong and solar Alberta flow asset offset the on was on flows performance capabilities lower decreased would fantastic. by results conversion expected spend XX across investments due capital wrap team us as fleet. consistent are to prices million the at CADXX markets Sundance partially Unit North The acquisition of North year. Their in realized to higher America. positioned strong past sustaining up during The delivered which over flow has power month.

the Alberta are the to seeing we pressures we However, thermal business in down shut gross as transition mine. margin

cost the to phase of capital our base on from coal of As tons we increasing we time, get as last the expect continued move our pressure utilized. costs towards see see At the fixed as of remaining we cash our fewer coal inventories across coal same operations, fewer working mine. and per mine mining will ton delivers our the

business In are share our Power of flow added the on high the highlights and up on date, summarizes overhead. tracking we and ability how billion Station. basis Our year-to-date for the corporate CADXXX and a at current financing assets flat end to cash transitions, closed million plan investment to segment company the closed the flow fund at were for renewables the our the South corporate almost no generates. XXXX was range. CADXXX new At to gas Brookfield cash swap. impacts a towards buyback total net costs the the to from we deliver guidance pleased of deliver with return basis. us the program. growth to extremely to XX% of QX. the quarter-over-quarter, CADX capital Liquidity corporate was the across efforts swap quarter reduction on I'm total Hedland our million due our just through free much cost gains return strength on XX up tranche ongoing company impact, we but well down our this in shareholders return our realized from also with to free financial million take significantly year-to-date and Adjusting end strong of CADX.X and October CADXXX second dollar million the Australian to This sets in we Slide

corporate As years, we've you senior in can our focused see the on on levels a on the fully few merchant debt recourse market. bottom preparation reducing over the right, for past chart been

have see to maturity prices XXXX. and CADXX track Slide in goal bond the can a XX, on CADXX in to this On spot in the are November. We repay megawatt significant market averaged available quarter cash meet that versus you

last outlined quarter, I was and around QX base As able team to hedged the generation optimize was for the fully dispatching our load hedges. those

slightly see lower of are for hedged and to due the the QX highly the to continue balance year. We ongoing load of COVID in impact demand

for to ahead constructive as Alberta to prices power continue to XXXX, Looking factors XXXX. we see compared

end with of the megawatts reverts of on X. PPAs, January roughly the to owners First, thermal X,XXX the capacity asset Alberta

As to the the accordingly plant return you to know, costs, other there is capital of - as no anticipate in do energy so. of energy structure order offers will and reflect we their the for on to mechanism return the outside owners recovery capacity recover price

factors. expect addition the to end the three from price In other support of PPAs, we

in First, we additional recovery demand XXXX. expect some

of recovered prices. we per carbon power to higher significant increase in and production conversions. remain Second, scarcity coal number the line be CADXX gas And to higher we to facility cost This with to expect federal of through finally, to provincial expect raises outages tonne tax pricing a and due the must program. the

to XX% megawatt. the In strengthen in some forward stronger see curve XXXX above about prices QX CADXX CADXX. at megawatt particular, CADXX with hours a the a Over we CADXX over seen from quarter, peak priced past we've

prices levels. QX XX, Slide and our hedge to our And on hedge on for QX, we provided strengthening positions. we've based Moving to on update added

For a hedged megawatt approximately hour. the load now balance the at Alberta for of year, QX generation is CADXX thermal base XX% at our

on the that average at XX% strength For an I I've the market, in XXXX, tightening our price but think capture to first I opportunity. CADXX. TransAlta and what over levels want know and Alberta increased quarter market of are reiterate of hedge length see hedge spoken price highly of we are I and now market forward presentation, To prices attractive positioned periods makes to in I our close a value increasing highlight want investment supply to well margin a great the of and volatility.

as are a a by First, underpinned reductions we emissions diversified high Dawn out, highly in quality and portfolio. leader pointed GHG

largest we've We Alberta over have and the for operating hydro been fleet in century. a

capabilities. are market The The company by positioned by energy world-class supported well highly to business foundation. a financial strong that post very upside portfolio capture is has We marketing PPA. contracted a complemented is renewable our

we sheet company and that, leader in the to maintain ample the cash capital investments has at are the we company balance and we've as call milestone free shape, an exciting I'll a is electricity the great of flow. is Our liquidity, believe track With production. discipline growth strong We a well Chiara. turn generating future to in have record our positioned clean back continued in for

Chiara Valentini

Thank the please would analysts. you, open for Todd. Mariana, call questions the you from

Operator

Maurice [Operator with question Markets. Capital Choy Instructions] comes from first RBC Your

open. is line Your

Maurice Choy

a to better eye also guidance, than you're your on, close reaffirm your expectations? QX a motivated any for that that is My in Can QX I line you And range? response there had things you obviously for guidance that you first guidance year. QX are this on keeping reconfirm or discuss results. on the as depending question your strong guess was Yet very

Todd Stack

there's guidance think, capital, money that for I sitting and a is program. in our bullish X flow spent X.XX in still do X.XX to significant clearly of and turnaround at QX be We still high still X.XX Sundance to have was of cash Maurice amount free that we're end the on conversion coming capital very Yes, range that. on ongoing, a at sustaining

month the that's something on balance move and a have year shifting. lot we do a that our is capital top our of KX did into year. or them just it laying down, guidance KX moved you - high capital go have saw XXXX. of that's a bit we conversions delayed into we the spend a definitely forecast So by When sustaining the And slightly some two of next for capital that, of each, the

rationalizing a sustainable So that part of for a the - those as capital, reason of not it was delay was and the on timing just bit well. reducing

capital we're I paying to. So attention think

As to generate Alberta hedged but the business. in looking Alberta we're some market, highly really I some, mentioned, for upside in potential opportunities the

Maurice Choy

that going I sounds in $X.X able some guess, you're to my downs months. final opportunities, particularly coming you be given allocation capital question be billion, the And and drop about, is have to also introduce could like,

and And attractive You costs versus profile. introduced E growth? opportunities preference the of could extra contractors an ESG. for some ESG these if opportunities you you to Slide XX discuss a broadly has merchant or to I returns a of partners, if for there's wonder potential number improve your

Todd Stack

to I in there up have Maurice the mind, mentioned, which on the X.X million just touch want do, keep billion, November. for. coming $XXX bond do here we maturity we you in liquidity

at capital end here. complete, are And also expenditure we QX the project think want balance don't in of the So Skookumchuck a be we'll at to looking year. I the of X.X which be to will the for

Dawn Farrell

here and I'm because then an I Maurice, I'm going start question. So, and think let in also important to Brett chime John it's going

a idea, your which Financial, coming, that reason E, spoke give I'm ARC any the as future. way. available flows, that. enough economic of because to future would written that We're contracted and going I'm just net sustainable do assets. there's tends at very Sun with cash a and not the lot mostly it's not into It this into that wanted which very number also important, reinvest about papers him hedge last good to do. of the And after it a give credit zero people else So said, to again, I Max think XXXX. I by on on he's Because going cash have to go talk and stealing reinvested night world, And to to I extra there will I'm over that to is in this in there money all economic be Shell. being We we important X, equal do team is to a is bullish that's

we So to always tend overall. favor that

thinking I'll so maybe returns seeing do and And what how how he's on I'll Brett, - is on, John, to have? then, any he's you turn on would the growth side that comments

Brett Gellner

Yes, seeing projects. on out of renewable ESG Rest not just we're of gone especially in United customer the pointed people here number on there, thanks. for Yes, in side, the as of a Canada, Alberta so terms and focus States opportunities looking but has the

we good do see so And opportunities.

like year and we're to that be range, we're tenure again, X slow contracted between not to to going in the returns. Now, the we've XX been going disciplined, XX continue past, period. to tends chase And to

expectations PPA there again, So post But return to risks we that the the we We factor factor project. merchant that have is then into a of do. or of portion in?

looking components those I electricity to merchant contracted. think you projects, associated, have might steam you're but they if as be know, at of a There well generally component are Cogen them. and

kind of projects. we that's how those because generally, like again, our position. So And those projects of approached we

to up projects big, further but think out very projects. You know, that important big the contract initiate clearly, those like are to those, are we looking we'll projects, bigger Brazil, be

contracted know, I, Dawn we're echo type says, what mix, you a it's So focused projects. but generally, on

John Kousinioris

bit thing do into when partners, Yes, projects, add very It's didn't we them lot of as But the do say our to ability to we're I think just some against I other important gaps one being as see of our relationship for the I about have growth BHP. a I that us as think we've in solar but we that a potential forward. one and and Western seeing too bringing our Maurice we partners for potentially we're to alone. really area not renew don't with would And more our much steamers talking to them is, work Australia, to talk about is them. We partner of do partners, tend partners. a it move to that, been very, customers in

growth, we partnerships we think So of of when think with our do it terms of customers. in

Operator

Hope next with Rob Your question comes Scotiabank. from

Your line open. is

Rob Hope

the think to MD&A Just flow end I midpoint highlighted want guidance, the you Maurice's free a confirm clarification on of cash just that? question. says upper The

Todd Stack

Yes, I upper do I'm towards seeing between the the see end the towards midpoint closer now. and end actually high and

Dawn Farrell

I KX. again, with just big COVID, there's the - sure an pre-buying more a in make capital more two may thing, year, we KX a that little spend next to to team do do little Yes, that we and want add have ready everything just outages just and QX need is to one to And and with think always especially opportunity potentially, go.

bit the QX. the we think into capital little looking on go team side at there flexibility is of a I as So on

Rob Hope

And that's the actually, side. a to capital segue good

over yourselves, look downs, have market the headland the capitalized with potential than would more sale be financing, and future little here. drop a So anticipated arguably even which the you would maybe pioneer

So in in some versus share investing projects you versus about buybacks? near the future think capital drag how here do term

Dawn Farrell

X. TransAlta a question. doing mean, unit for know, KX, we're of good known. ahead Yes, I you really, at Sundance it's TransAlta - some is got investment path what And opportunities on mean, sure, well what and it great KX we're here. think, know, going on really I you is our is to doing really I

a on as at, So really, of there's looks that. it considerations the team couple

into we some to of see very very into TransAlta projects things tax well and other year. have be we fundamentally gas If the projects you look by at next going of we the, some we fit at, RW to at at because as we potentially use way that well look end the mean, and them of benefits want look a the kinds that and fit, up. projects up, clearly if company we you renewables that TransAlta look set that I other are is the fit company in And

that we'll means we'll broadly relative the be it allocation does, share have at TransAlta brought So in, and dividend amount to capital more at you looking capital of know, it buybacks. with to consider that But that. growth we've our carefully

you're think of Rob. I on that, So the in right track thinking terms about

Rob Hope

fall know, to one on the hedges, early disclosure just But the some kind does balance what then the off hedges the one, hedging see that of and price the part XXXX. you And on a view in in final kind additional be? just of year, of of the should fundamental the to of your balance want curve good see that layering forward is up you just of to move reflect year view the power the

Dawn Farrell

it's of it that two add along. Yes, I'll set and things up here. people can kind go

is the So quarter. first of a frankly, of according - quarter to up Alberta of all, in a hedging ahead it Alberta half maybe liquidity really opens hedges only and

low. you then liquidity the That's lot two, So through opportunity. when three one. number quarters there's quarter see dropping goes formation in number We not there. absolutely, because really them after place And off, take more think there's for pretty And price year, the the sure. is it’s first transactions a that as of the

I out wants? figuring So the off good team don't take to very Anybody at table. some our hedges when is know.

John Kousinioris

you just for up well. XX% for next noticing that's to why from he ramp big position are market think I is is be beginning the we from think touched d And hedges I mean, to prices hedge Dawn and there's will next a market that hedge on perspective, constructive point being liquidity pretty now layering change second why is recover. it's a in are QX, sort think next that fundamentals we as perspective, given seen think things we year. To of a And appropriate. the of the there's, happening quarter were QX we've are that Todd no be where thinks liquidity which we're all impact our I disciplined for year. price quite ahead the know, No, that And around we're would rush don't the year at

Operator

comes next Markets. with Capital Your from Mark question CIBC Jarvi

open. is line Your

Mark Jarvi

current know, to or think fuel in Keephills with is units run qualify Sundance costs and of rate, units those active? you a will breakeven, prices. essentially to actually power actually how do quite Just Like it one you mothball those D have be [indiscernible] much

Dawn Farrell

frankly, don't a we by unit as it I down it mean, we unit, Yes, break portfolio. really run

really it's optionality in portfolio. the those the of So units

various how in up look in portfolio. they'll but currently, hours, at have is beneficial have weeks, on they'll of having terms on units them to the for whether the standby gas to asset determined that that different state as strategies the set days, So or optimizers or not off they've on those

Mark Jarvi

perspective, talk and what's then fuel your talk next transportation, any Okay. guys year. way you let you hedges about me current price And just cost hedges gas can power the about the whatnot, for on

John Kousinioris

that two the you So four be XXX - a terms quarter in at much of in quarters say of prices, think first the balance that prices I level, for roughly to then, quarter that then then year, in XX% year, the and for think range. for XXX would would I XXX, I bouncing drops range kind pretty of terms hedged around kind entirely of first and and we a next in are of a our they're know, are hedge the four of off bit, their about mark, sort

Mark Jarvi

a maybe then of sort question. broader And

of standard - intensity, doing changes tax revisit they're of set chance and was quite the impacts the committees couple the decisions, tier doing cascade the power by carbon views are and fleet be best think you're do standard, the on how Can efficient, up? people just, you timer, set the tiers and there [indiscernible] up or fuel the won't low what repowering revenue your they're any gas actually scheme plant you the of repowerings, in, a from Alberta. generated lot coming all proper in no made emissions With that

Dawn Farrell

in a I that's environmental know. the standard, forward lot a have as portfolio big peakers That's perform. pricing of mean, to think question. terms strategy, moving rather our to gas portfolio the because than think, peakers will big the over And - government. to changes regular around know, we like federal single peakers the next think of the go that, between decade, run to I investment a some in there's that. in policy I we, continue And, parts And fuel government Brett, a nuances the don't call plant on they a effectively policy the just the the I think there's we or question I than we have there. and tier, a single you average, more clean ability do carbon the and Alberta

Brett Gellner

co-firing I by still be and mean, anybody's what on would our our be speculation because there's impacted units a would it coal province. the solar, again few things. Clearly impact would gas part that. than by more - that's impacted And, if in be impacted but would is it does all gas on change, everybody units which

to gas limited I of X.XX a In terms it's year. only they running can't believe new in peaker plant because meet any the XX% is

are going peaker like boiler forward So And really operate converted accordingly. - so units are challenging converted they'll our new to peakers.

diversified Some we the and a of managing made points back in others, it's Mark. mid-marathon again, It's run certainly echoes them way kind we it and baseload that are fleet, more to will a but that - fleet. of

Mark Jarvi

discussion [indiscernible]? any with one, updated your Last partners,

Brett Gellner

No, updates. no a now There's also and right there. change role new

Operator

Ben Your comes from next with BMO. question Pham

open. line is Your

Ben Pham

Is I some to you the take where can up down the transition. pipe. to follow your questions, a the expected to walk but Alberta on to to wanted Could D if pin of - move can and going correct? portfolio and on move not And your assume while gas entire and optionality retirement, on it pass there's that's decision the just but then up would comment rating, assuming to that still you're reporting through wanted you with the procure process I you. to from

Dawn Farrell

you want not again, question. to I sure we're over quite start what so Okay, the

breaking You're up.

Sorry.

Brett Gellner

a I question. have on your bit first

for again that us. try please So

Ben Pham

move the EBITDA a time. there's you do - second, point two you you what the of units do one repowering, figure scenarios was with at a - to And you you, bunch there's So coal thought the trying of out provided. in there one were and

the So products heard question the that you sure to rate. you can then wasn't facilities. to if more to, one? think And you get for you D assuming you there's to get I you've - wondering I'm move I more to what opted options higher, capacity I second And led gas curious was that, which just was

Dawn Farrell

All right.

Okay.

want question. first and crystal be clear on the to I the question let's, So second

we’re So but those reading first because they gas. of haven't to ability because physically, not been gas those to all, on units of second units just supply, of the of because converted question, the run gas on

we them do they in conversion, to see that Sundance may fully in we'll simple boiler KX, XXXX for capacity gas needed be studies year, don't for additional XXXX, K - and if XXXX. are unit for determine Next four candidates conversions, in they needed but for

So we'll do there. those there's optionality studies year, next some

a repowering, is be much the very, terms the go us. be of from which going by also much climate And seen do, firms hydrogen get to to to and change by associated some with of repowering in second comments for more chance in there'll very through looked it have second a around that think back be These and a just if there's would We of definitely in want can more assess very CCS. capture we it's as as repairing that power, be cleaner storage will you’ve is second more climate What blending think because plants, In goes around looked carbon policy good some a attractive, our we requirement, to And though, the decade, at repowering, hopefully terms we our also targets, to also aggressive very achieved are it potential a second second, green there at. power. the it. repowering for have fleet. get you at sort

make greenhouse our we second intensive. do very we're repowering, about how you when you less those do at gas thinking So - much look how megawatt hours

not is repowering. thought maybe I originally the We have think XXXX. for a table it off definitely the I we'd it's table, off second XXXX, by So

there. So But going be that thinking forward sense? XX that those we to of in that XX do slipped doing Does period, very ensure can standards we'll year. in probably - also out sure next for we all over how the XXXX XX, make of meet about next that make that carefully We'll years. environmental we'll analysis analysis

Ben Pham

maybe Todd, I of topic to just I And a on the just, on that maybe absolutely. crystal a want clear got - messaging, cash right. question flow sure I just Yes, guidance make free

just higher but And like be end. your is guidance with midpoint So succeed so still a the just that, that your there formal looks you're package, MD&A saying is the you're possibility sticking and in it to or really at the ignored sure for saying you your guidance? penalize do you that? hit and on up MD&A wanted actually and Is I understood to don't if positioning make our just that I are new midpoint us it,

Todd Stack

it and high deliver definitely see and planning I we to the midpoint above end Yes. driving of business the moving that towards the are goal.

Operator

with Kuske comes Your next question Suisse. from Andrew Credit

is line Your open.

Andrew Kuske

into and years there some guess, XX started going I ago PPAs it. uncertainty we the were

them and finishing they we're Now there's finish. uncertainty as

just lack things hedging But we've better in view about guess in think how the you stabilize you triangulate metrics? bit do hedging does to talked I specifically context, of ideally, these a of then rating market So level the credit on market. a liquidity as got little with your that portfolio? for what behavior, you bidding And want that the have in Alberta and

Dawn Farrell

Yes.

I've time in over can if some because off Alberta there market, be And predicting take a in people are going and PPAs whole of that a be we've well more think emerge So it an I more financial see think, as to going time to there should some spot signal right do to very the But contracts have of once full hedging contracts vehicles a - team people can in market. completely actually about as customers working the a there provided to transparent the been is pricing done of be muting spot that's of closely muted I we like. - is and do what much look sure I should sort market roll should got it might think what for a there with be terms see And for And I important than unhedged emerge. Andrew, be as do bunch will a think - are this. I question. the and to PPAs

and even today hedges even that customers we're of example, some talking to for year So seven about thing. three kind

emerge. looks like. of all risk Now But early, what really the it. need to They that people in see need market you to know early assess markets, as should days, the

of hedge the values, it completely - our depends. In terms

up we're where or nothing are we're to us because hedge that at hedge point. to whatever if get going prices are probably up So, it more then. spicy sitting reason, weak, a for if hedge not prices prices for low we'll in market really pays And

our So sort of year-to-year. from move hedge will volumes

thoughts get top We'll what pay see things make the XXXX market is to and to shapes times blindly a markets, the these as see disclose - not it another have there'll to asset see We it. as Am does really some level at that some Does with discussions way being clear? where go it commodity hedge I emerge. be can't like other customer where to hedge. how look and set But we're much on sense? market. say will off when at in will continue how optimization lot on I start our that, you of optimizer. the be and think a of up better of through our probably are, into We we We'll we're going it to very

Andrew Kuske

group that a is maybe the change it that fact you've kind group But follow-up marketing you change some now? PPAs, optimization into anticipate basis. do you does a given around And you're full But your marketing financial go as market, reporting and functions should to the energy-only on other of evolution to to the really got too? a operating just And the things changed? that reporting

Dawn Farrell

Yes.

the capital of were company reinvested it of as for - a it's and renewables, we've and we've of some sort the portfolio electricity electricity of in and reported matter portfolio about fuel as Coal what have we here. operate we doing we of just gas units portfolio big capital an XX it make user how on the on So we'll different do and those frankly, tended was And is more the see, because think made we to for because terms an for having fuel do to changing. electricity to was type see it more capital. manage sense start and made. especially the work there's and mean, no to There the I could last shape way the the levels - is have years argument the with growing market asset Alberta you that optimizers how we type be a

thinking So we about are that.

that on decisions at all. through year. may But expect any something made you next haven't certainly We to go we see as

Operator

comes John Your with Securities. from question next TD Mould

open. is line Your

John Mould

with great to start California of on results to to potentially opportunities like focus Northwest. supply like I'd just energy I'd Pacific for But in marketing context provide volatility. the the firm in

through gas retirements coming in at investments market, some in it's And XXXX. there? have operating Centralia have the unit from one of context region, just other in Centralia in whether supply potential You'll or a coal the provide other opportunities of that to you conversion that what could

Dawn Farrell

question. good a That's

the forward that with RFPs there shuts firm So, But start nervous as for being is know that accepting five about, way that, what and opportunities know go be in of they that's will the looking the green opportunities potentially of to intermittent from more coal power. to what And next about we those of number going course, there's supply. replace will more land and and do some the we interesting region years for coal very for region our And that on a solar a with about all are down, wind. the they looking with all very, know of region we RFPs a number down. the shut is players there

that we're all We closely sort kind get can the just to in see yet, you very do create worked how region nobody conceptualize XXXX because, It's that desperately, yet. though, frankly it least nobody even with transition green baseload. because, trying they till supply do can to of not at some environmentalists to know the conceptualize feasible of need that we've also gas

something operating something think how customers and those submit about we've that. or the could even RFPs local where frankly and So by to reserve encouraged local be there into like to it utilities been we provide

the to baseload. focusing time in XXXX, frame. they'll area So, on to then green that the point, looks XXXX like be start with in get RFPs at be this it how XXXX, some will And

we So, coal-to-gas a at look LMXXXX BHP got pretty it and pretty in to unit small plant be putting even amortized you continue it there gas well can to doesn't actually takes in of could in as that as - if be we which think think could it lot - putting out peaking competition there big you much of. that but have that is back sold It it XXXX. gas win we it a might and conversion But might that everything region. a be get we've a a remember region

on are be So, something as go that, kinds going team that on. looking forward. the early the at days those we will Very, but are of things very

John Mould

Mark's then, coal And ask the any color considerations and fueling sheerness into thinking dual those there in at fuel on you future sheerness? coal and future units? and about the stake just owners the think the to how you maybe a on ESG able gas circling plans back and different Cogen question broader just feed there provide in maybe how carbon versus Or way. Will of of that be to the of TA - emissions regarding

John Kousinioris

haven't terms our we facilities, interest question try changing answer respect any to partners I'll sort it's Cogen's have the reverse. sheerness the With we to John, CKI. ownership TA, in of Yes. John. With had discussions of there in respect to with TA your in that

right - there. effectively we what quo we're status So, is now, the seeing

we Heartland do their would it that. that, predominantly is goes will be XXXX? of really much is burning see the pretty I can transition I run gas-fired over think think there. folks terms gas. focus. of expect expectation as Will on focused But towards be, trying would on I and dual facility say by, That time our all fuel are dual that, In I the increase fuel, at to natural some course a be

John Mould

just And then, lastly Brazeau. on maybe

before storage You've to talked the pump just ability be clear.

the move need just contracted the deciding ancillary with before to project you maybe, would about of to that much of how build be maybe to I'm that to really how plays wondering, market you contract forward that? start value output into ability that before before like felt And its facility to need kind ahead? in the could move broader talked to You've up stages.

Dawn Farrell

you to us. Yes. got risk get I mean, that that XX%, think take range of a size into XX% it I for investment to contracted on

and had can more look could, if if maybe and of some on focus at most a and And it's of come the we you could at that figuring from two environmental we that hedging, permits now which is power to risk than - of potentially Now, emissions, see change you very, companies very their world attract that side because actually could can it's it's to reduce into there it, of lot partner less sort a investing, that. rex really the out you have about capital take their some supply. project that it. of ESG we of sure, demands come the that out for the is power how opportunities, a carbon, scope merchant But really look the you of interesting about more some the as to emissions

it's work do side that actually that, more than we on more the power greenhouse So we'll that, as about side. talk heading gas of the but

Operator

comes question of next Your with Bank America. Julien from Dumoulin-Smith

open. is line Your

Dariusz Lozny

Julien. for on Lozny Dariusz It’s

Just that in look to Southern made as progress ask and was last RNW to as that recontracting? watch re-contracting question the next with some in I as do your in of And side, wondering, quarter. Sarnia for that on efforts. Cross there should be It quick has was milestones we ahead one wanted far the kind like the contract, we sounds what would to

Todd Stack

of are the just think and behind year. be job about extension Sarnia, the facility if And the to you're there our at that there. transparent half those us we've extends would arrangements - finalized It's we're contracting expecting it. Dariusz in the pretty be we're we a With question. the contract next Cross, the have that years their the first that they're by the and for needs. and does across fence, our serving next Southern thanks all been XX right, that would I good hopeful pretty pretty about presently And in the milestone well, excited board think advancing for senses, life I the customers of much efforts respect with

Operator

Healing with Your comes next from the Canadian question Dan Press.

open. is line Your

Dan Healing

investment take a and moving already retirements. up strategic step related of coal - back it yours? of the go through to Is rationale Brookfield the Dawn forward step just for kind the

Dawn Farrell

power all. related in to think No, of coal economics overall mean, kind not at the producing I tax. it's really I on carbon with the Alberta of

If carbon year flexible the you and a we've $XX and look in get Coal after. $XX at Alberta, $XX they're next currently less got by tax year, less be a economic, market. merchant plants

doing to be in has add a So plant, highly when and when right were want comes easier will to be that volatility. back market run will will now flexible. flexible be you a it that to John, you do conversion more much highly something? gas And

John Kousinioris

they from know, climate government, to this in so you mean, was to is the really plan the portfolio. is set company way in it remember only generation for coal resulted government, date federal it run even the that have fired the when the and thing the just XXXX came Yes, with the refocusing the would you I leadership previous end,

Dawn Farrell

Right.

Dan Healing

you operation? be, coal elsewhere had in that also down question close the what as impact I And will the a on mine and about employees

Dawn Farrell

have one But and till That are height make having I people is helpful sure XX Having story. people that them they business, end actually our this they'll we XX because is to work party plans. soul continue and we'll there. throwing the be province. working They the the - for work next By now part work hard But make province in At best jobs reclamation know had for sad their to the to the of is company. end they is it about bittersweet or to thing those all good reclamation, for year, that XX number is members to make this of of they families sure TransAlta, to work great. continue working which out for them us in given to working on have year. that certainty next be and years, a XXXX XX year, family they this with do the heart did we'll last of all the through we'll really the years next all have of this some can

Operator

from comes Baydoun with question Naji Industrial next Your Alliance.

open. is line Your

Naji Baydoun

just of Centralia couple the a to questions, assets. Just back going

Now question from to of And that Canada I it all any in just completely you can us give won't portfolio? take remove would guess latest facilities have your coal is, your fired XXXX Centralia? if on thoughts the as what coal wondering you

Dawn Farrell

an That's mean, we'd to a is Centralia sell interesting when I the strong, very megawatt we have with they flows cash we Well, hedges But to that we the would agreement at worked thing the the that if us that And And life. end XXXX. go end basically have plant well, would we of Centralia XXX that helps contract, its shut about and that hedge create it the governor have to private to a probably as down the plant. negotiated would back in you so till some buyer. if on we made XXXX, of guarantee XXXX. we get

XXXX. that environmental So down of And shut we'd we liability are this unit work we of we that there. because which guaranteed with in the the an state end end we don't have return, and that for of the did year, one unit we shut X at the at down doing,

strategy we're that. in important part and a strong to that can green and in them how it's we value our net our cash reinvest the meantime, are cash mean, an in So really present reinvest of discussion. visualizing flows plant is to I having EESG use But

Naji Baydoun

TransAlta there merchant guess keeping I you'd a RNW contracted was strategy a trends to level? looking to of related change converted question for contracted gas? more have Would sort be like a profile of drop would that TA all broader at Does more RNW majority your to renewables? assets like And then that at of of the into to as your are you minimum Corp, and your more maintain exposure assets is a of the move down

Dawn Farrell

of both benefits that That's Because number work you answer. a is a portfolios. to there when in tough - question

might there another and better So has work better work TransAlta is tax - we'll same have look project a in green project it sort might that of that certain the at and, attributes attributes RNW. in

as have aiming world. now And strategy together. we're is ESG the close we that at brought So really pretty

want number think bit we of and to time project looking and are that work that both the wrap But looking investors that we right We the portfolios projects benefits at little market, is the - put companies. the developing we're to we'll ESG look sure EESG, to I get more will so, at at portfolios, capital in bit work to that make more for We projects, what up different right companies investment together. economic are for both all need portfolio do in to there a as to around are policy really that. coming we have how or the do allocate that for economic, to a both sale show can. clearly, Again, a

Operator

this over back the at time. presenters. the questions There now turn no are to call will I further

Dawn Farrell

everyone. today. Great. for our you Thank concludes call That

any Investor reach please Relations to don’t team at have here hesitate further questions, TransAlta. you out If the for

Operator

participating. today's conference and Thank you this call. gentlemen, concludes Ladies for

may You disconnect. now

TransAlta (TAC) 4 Nov 202020 Q3 Earnings call transcript