TAC - Earnings call transcript Q3 2021

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Operator

Good morning, ladies and gentlemen. My name is Michelle and I will be your conference operator today. At this time, I would like to welcome everyone to TransAlta Corporation's Third Quarter 2021 Results Conference Call. All lines have been placed on mute to prevent any background noise, and after the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Chiara Valentini. ahead. go Please

Chiara Valentini

and Good Today's replay quarter will being Michelle. and Kousinioris, and to Commercial I EVP welcome and posted O'Reilly and phone Thank EVP, available Wilks, the Call. view to that morning, and webcast, With third Legal will Finance Stack, invite Todd Conference Executive are External John the Financial the call thereafter. me TransAlta's is be our Officer; supporting Chief our on of Kerry Affairs. later today, you, and Officer; everyone, A Chief posted call today President website. lines be website those listening the slides transcript on are shortly to

call qualification over free results detailed in forward-looking referenced is subject currency, The the and expectations non-IFRS call today's the of MD&A will with today's and terminology our we purposes remarks, funds balance All to otherwise of are call set noted. questions. John. an let in Slide All reconciled X, XXXX. here call. including the conference statement Todd EBITDA, on further our comparable for in to for in the call the John used, operations your incorporated our MD&A amounts information And provided reference. full this unless the that, from flow On are out for the turn call, of overview during Canadian these After provide during along and cash with quarter's also the of for the will open me

John Kousinioris

third and thank quarter Good morning, call. for you you, everyone, joining Chiara. our Thank

the Region the office, a the located I Nakoda as X. commitment First home of comparable towards the have Kainai, XX% and Nations cash Piikani, want of region Nation delivered TransAlta's acknowledging quarter-over-quarter. of free includes begin the people increase Southern a the a extremely advancing a Mati flow the progress exceptional traditional XX% the territories today, XX% and in comparable increase that in pleased is company we to another we our of Siksika, the As performance the quarter, Tsuut'ina period, share $XXX Nitutapi, generated well over as X a are $X.XX, in the of Alberta, I'm we Treaty which In XXXX resulting increase We've priorities. in per per to EBITDA, part million of where QX, by the reconciliation, the XX% our had head leading our the in Stony made results, share and $XXX in basis, On million we increase have year-to-date cash year-over-year. over prior flow of free EBITDA, with

representing $X.XX We during fully our quarter, also share XX% an common per the strong. of renewable increase our annualized and a pipeline. dividend of positioned liquidity to fund growth remains share, dividend announced We're

for earlier XXXX, to guidance $XX strong in the another respectively, the Given provided our to the report. increase and and of and up we expectations balance million compared the by a we were for QX our performance million, further cash free EBITDA pleased announce to our our year-to-date midpoints guidance today year, $XXX flow at

gigawatts at delivering on electricity our renewables U.S. the Alberta, capture which our power optimize plan, clean quarter Day. Marketing our value which diversified announced way our deliver on that the by of demonstrating across also desks, and Our of to our deep We're Energy X performance on of markets power ability American underlying our natural our capture North excellent was market with opportunities. we gas fleet. this capitalized and strong in to growth performance to prices incremental of knowledge trading enabled the ability support higher our Investor to an also driven us operational had fleet results in quarter, and experienced

a Garden our we We we We the EPC the construction month project. with now of in now project North We here our XXXX. our is storage number the the it's completed is and later be on the advanced commenced now announced of of XXX-megawatt coal of begin reach expect progressed expected solar as full We our to X, key project, of the Northern quarter gas quarter, and XXX-megawatt to first farm acquisition issued commissioning closing priorities. notice construction Carolina Alberta. Windrise portfolio. the During testing. contractor in this to later COD Goldfields proceed of which complete, this began Construction month. to XXX-megawatt expected to Plain construction of solar our conversion Keypills and wind We the wind to undergoing

gas. December completion With the spinal closure the of effective all XX, will the natural our emitting be Highvale carbon of conversion, of and generating the on lower facilities Mine Alberta

and decision project this Unit our early remaining coal our the X of Sundance Sundance suspend Unit in end retire Keephills the X announced also and XXXX. at We to repowering X units, year Canadian

our to reliable strong recognized findings X Hills Past at Kent of significant serve. clean a join have investors wind takes the XXX in as collapse engineering identified returns facilities decision and offline we COPXX to extension were to indicating TransAlta's world turbines energy at customers, our number proud of as the a our for safety the quarter. end wind success have X tower foundations, a communities foundations crack at we undergoing repair Kent propagation several event Hills facility we that the Unfortunately, solutions Initial was transition, action X at the the for of that commitment Ken and our be the remaining need experienced are date climate natural our to address assessments. replacement. Coal energy and Hills and subsurface taken for the delivering The been will of or Finally, leader World to energy member alliance, Powering change. The given

engaged incident New about provided with would Power the have discussions Brunswick you appreciate expect, date. in and support the As they to us we're

it plan available. our as We additional to return becomes will share information service on

Turning now to growth.

for with the announce XXX-megawatt Duke our across The Windrise commitment to peers an of reach eight through the projects COD of demonstrates at region expands expect to contracts our away solar is annually. interest. is Carolina's portfolio closing significant solar subsidiaries given a a will This facilities energy. expected by footprint TransAlta's from we a completion portfolio our project The Construction Carolina, first out approximately later has XXX-megawatt have operating XX-story to transition This by XX-year the this portfolio capabilities TransAlta's commercial to million of of month. complete, pleased and now Alberta are will the of under see to XX is turbines the December extend The EBITDA turbines complete, Windrise project of with coal. contracted wind renewable the consists opportunities our of with and acquisition high-quality PPA portfolio. The the and process operation in in ISO awarded in all of the US$X needs North project second be clean long-term contribute the procurement be operator ahead complete. The States and We through of North third Renewables TransAlta energy our of in North TransAlta of System life and United of customer Carolina growth Alberta XXXX. where XX Energy. all We customer achieve execution which portfolio will XXth supporting held Electric in the economic rounds Renewables. is facility

permits of experienced operation of supported project, and been activities the secured the XXX As approvals. being environmental our wind our Garden you pressures farm of an with megawatts processes this construction regulatory project agreement Pipeline any commercial in year, We've advanced exposure costs capacity which XXXX. know, portion have through we earlier Plain significant reach procurement the Pembina latter to the the marketplace. have during the and by associated launched to expect and A XX-year of development part and fixed, limits inflationary all the XXX-megawatt Initial for attributes. we started,

continue actively megawatts fully are the facility end by to and the remaining to market the of contract year. We XX aiming this

in We've decisions highlight of gas that growth $XX repeating now on to Hill including support to nature battery storage. exclusive in facilities the advancing hydro and reach makes development spend full in various We're it at cost-effective coming we're wind, Australia, several our XXX of won't TransAlta so year located stage the between I our in Renewables. growth the a targeting a contracted spend Canada, The We of focus in project final of the gigawatts Plain customers' drop-down hydro to a to and ESG and are wind and opportunities Oklahoma. solutions are Investor disciplined million engaged from in contract exploring relation Australia technologies, we and and the progress opportunities all including geographies maximize candidate of pipeline storage these Day at strong today. away new to We on various solar, West, the EBITDA value Garden manner, of a time months. mining expect X projects baseload focus in September, to discussing highly objectives development clean and output remain meet over we in the continue like on are few Overall, time from our targets million Horizon of in basis. in $XX our In a merchant customers. East have wind remote project comparable most to projects shifted We the the power our activities with I delivering here solar. which on and the in lot Western and generation, opportunities advanced investment deliver fleets customized for megawatts to Alberta. that of with discussions on Rock approximately and with lot to White would a development

capital in teams Todd working for I'll hard $X our Australia it results turn us to the the target. to United development our on Canada, over Our investment now through financial take quarter. billion States and deliver to are

Todd Stack

John, everyone. you, good morning, Thank and

million discussed, John million per excellent $X.XX EBITDA $XXX had million EBITDA share great fleet flow. has $XXX quarter, we continued $XXX of or another of the to $XXX cash deliver diversified our As On and Company of free flow. with basis, free and of generated year-to-date million and cash a comparable results

year free extremely cash the performance results nine exceeded first with achieved so and We are full have now XXXX of EBITDA XXXX. the our months in far financial pleased in this flow as year

with reflective the impairments and asset decision earnings other did and X project the net recognize Keephills the of totaling to X related X, operations not of to our due spend Sundance the are in noncash results. retire $XXX Company EBITDA and On and in not are extraordinary ongoing comparable repowering and number impacts our penalties QX front, Sundance a million. are in shift strategy included These

solar which continued our the fourth more recovery XXXX With the the and this Alberta from in Thermal year-over-year the was both operations Wind facility, Alberta $XX fleet year. million to strong the realizing from from from this this in Similarly, of and of prices in nearly Alberta realized our to the of benefited hydro in EBITDA and expiry asset from was Skookumchuck $XX $XX Thermal benefiting in million increasing also as EBITDA $XX market to to year, XXXX our from Hydro work segments Alberta from optimization well and wind pricing significantly as higher, PPAs million in acquired great in $XX this addition teams. the last EBITDA million million outperform increase and higher doubled from than year. threefold quarter segment of the million quarter, year. XXXX demand, $XXX a

superior results. XXXX. $XX these diversified in marketing Slide $XX I three to energy our of with Our thank of has this Overall, for quarter EBITDA of another team as an the business performance, we their our very want turn employees in XX Alberta in generating also delivered consecutive TransAlta are million fleet both in potential our exceptional portfolio. Thermal, outstanding quarters to delivered and result our compared Alberta pleased our delivering and year, of the I'll results million contributions realization at to to more look detail. Alberta across achieving again the

baseload benefit Our energy hydro and dispatched as thermal portfolio are a Alberta peaking to from and wind, sales. facilities

of compared and XXXX. Thermal realized gigawatt During an of the the period In in to QX X,XXX QX over increase in throughout revenue. hour. generated had the X% the expected of approximately at hours realized portfolio in Thermal In hedged for higher X,XXX Alberta fleet same settling of per the quarter hour than quarter, combination under year, the million of gigawatt of contributed or generated average resulted we baseload pricing X,XXX $XX. $XXX the approximately price $XXX megawatt strong over to megawatt significantly $XX pool production, at average Alberta last of gigawatt and price just thermal the per $XXX The The revenues sales capacity, XXXX. an hours revenues quarter, XX% being production our price our our average hedge quarter, hours, of Alberta with peaking at an

expect We gigawatt gigawatt from hours, the fourth is production of currently XXXX approximately quarter the similar hours XX% assets in or thermal X,XXX X,XXX hedged. of total which of

demand. higher continues into market retain during the to to continue significant of strong We balance order realize of Thermal in potential for times segment and year and the peak capacity see Alberta forward open prices pricing XXXX, the to

we gas pressure prices put into XXXX. this power in and Over the natural QX quarter, significantly, have continue will increased on to last and expect prices upward

and Our is approximately QX fuel roughly well expected of and for hedges our our managed, production. production position XX% our half XXXX cover gas of

to capture the $XXX of quarter. revenues prices average peak expectations represents in per was spot Overall, which megawatt quarter. The of for gross average a realized hydro our demonstrated benefited the expectations to premium pricing hydro in and from volumes with Turning price. XX% QX, again broadly Ancillary realized exceeded strong with over line for pricing were hydro. hour, the ability

to $XX provide the For $XXX on hour. the spot our megawatt expect like Renewables. Alberta year, range of update the I'd balance of TransAlta to an prices settle per we subsidiary, in to

TransAlta's aware, you're assets well of and contracted our the in As results. as TransAlta assets as within gas operating our Renewables and solar held wind fully majority are are consolidated

quarter for by at Cash for Ada and due pleased primarily as driven the announce mentioned, the by was by Carolina closing of construction by million, as spare the to and for EBITDA Hedland quarter R&W Windrise. decrease the the completion North for of CAFD largely to interest a Skookumchuck the well sustaining Comparable distribution John the facilities. are due $X increased As compared Solar higher to engine addition the we the to financing South million facility. in South to The acquisition period XXXX. of $XX purchase higher attributed the decreased same expense at capital in Hedland available

now to at XXXX suspension previous to wind and key R&W Hills, resource financial million. TransAlta to lower be Kent the targets expect million a CAFD between $XXX Renewables of million result lower-than-expected $XXX As between continuing be $XXX to and year-to-date slightly at unexpected guidance now of relative million comparable operations are we $XXX and be forecasting and EBITDA our range. We

R&W. have We at continue strong to liquidity

$XXX addition of our over In end to we of the at had credit cash million facility, $XXX QX. million committed

had again, drop-down exceptional for of Renewables, our Investor candidates Day has we As cash quarter, could the two-thirds performance. flow anticipate additional increase in our we and presentation, for mentioned are once the fourth X-gigawatt opportunities and be our pleased Overall, electricity that for roughly guidance expectations year-to-date with plan free growth for to see we TransAlta to, growth TransAlta clean XXXX. R&W. EBITDA And together we

We are previous QX. comparable and the us X% $XXX range million. at share between equates per expectation additional between be of allows midpoint, million be free previous guidance. to billion, This now This the versus to to cash XX% $X.X flow to our range increase QX the over an guidance representing flow $X.XX at $X.X our increase EBITDA an cash estimating free our to increase representing EBITDA at $XXX billion of guidance midpoint additional

and for our power flow, In price free have consolidated cash we to estimates outlook. revised addition EBITDA our

financial Energy to has annual $XX for at be our Alberta adjusting annual hour. adjusting between are increased megawatt strong performance XXXX margin the with Company. of remaining. remarks cash the gross year-to-date $XXX to of months three on free strength highlight by full XX, the flow close results months second, to has I'm to hour. the ended our per strong for year my outlook flow $XXX exceeded First, to free our price based $XX of to nine on XXXX September megawatt we $XXX XX, and outlook finally, for per Slide going be Mid-C are XX% our cash million and segment And we continuing our In to price $XX outlook trend results, And million. annual Marketing between

sheet extremely stage back advanced This with John. balance billion and our of megawatts I'll positions to call incredibly over including closed billion growth of our Our turn future liquidity We $X.X cash. strong. XXX remain projects. in the liquidity fund us quarter well including With the total to that, pipeline, $X.X

John Kousinioris

Todd. Thanks,

organizational and our the As of cash focus always completing our growth I customers goals, to TransAlta highly conversion, think continue we our the priorities, key progressing to and by of I health I'd X opportunity. Windrise, a revised completing Keephills free commissioning flow inclusion a our and year XXXX close project at equity EBITDA including the review on in United of advancing as the what the guidance. our initiatives, great and States, XXXX industrial of basis Sarnia on investment balance the delivering makes attractive coal-to-gas a completing do, securing facility, diversity value I like recontracting remaining and highlighting,

portfolio. First, and our flows are by resilient are high-quality a highly cash supported and diversified

asset portfolio, portfolio, driven wind is our world-class by our by business are which of Our and reliable optimization unique, our and marketing complemented contracted energy and capabilities. portfolio, efficient thermal perpetual all hydro our

reductions. on leader clean a tangible emission electricity focus we're a with Second, greenhouse gas

close greenhouse resulted gas that represent to reductions X% XXXX Canada's Our target. of decarbonization journey has in

ahead and good inclusion ESG. In to removing a governance, diversity through places systemic on focus barriers addition, commitment in well us leader and as equity, our our

stage includes a diversified talented opportunities, its a of on focused growth set which realizing value. projects Fourth, advanced development pipeline has financial of Third, and we team company our and a have strong foundation. an extensive

is shape balance growth. has sheet great and pursue Our in liquidity to ample

Finally, our people.

meeting asset, We're culture to past I this the employees the results work company thank where all want bring best an our well our of our company. exceptional to leader our are people and that reliable the quarter. the in for Chaira. I'll to is future a over as turn authentic greatest Our positioned and deliver the contractors on TransAlta deliver selves serving in focused low-cost, their belongs development, for at a its electricity for back we're and great to you. call to clean and generation they have needs committed and and results and time customers. Thank everyone done exciting can

Chiara Valentini

Thank Michelle analysts you please would media? for you, the the questions and John. open call from

Operator

would go Thank begin you. Your ahead. Please we session. now the from Instructions] question of [Operator Hope comes Ladies Scotiabank. and question-and-answer gentlemen, Rob first

Rob Hope

you First question XX% Or and you in outlook curve covered units. and what your maybe like is on good the the you the is opportunistically advantage on think, now? just increase see quite right utilization, pricing just Could looks Alberta hedges hedging XXXX of your in for profile. It for your a are XXXX added on of bit Thermal facility, we forward of or your you that? taking depending

John Kousinioris

Yes, that you Robert, for thank question.

about seeing sense are land expect with actually in to add in a I demand a we're for And any on at team hedges range we being where to mean might that than we where $XX to basis, I feather what period. in some the just and that to at or of some of makes terms more think triangulating that adding, think are as think, position particular our that of from currently in we to locking to so, to in XXXX intention, supply XXXX. kind curve some performance the would know, in continuing low look our opportunities to have are continue pricing backstop XXXX. hedges work I I additional better expectations hedges is forward it's of month-by-month you and sort you prices basically it our right perspective sort in we that potentially it still for I result our fundamentals and know

Rob Hope

that over a partner process switching prepared New good appreciate In And then just so that. the far. New been Brunswick you Brunswick. has mentioned to Power this in I remarks,

extend, to bit issues maybe an longer-term As have you going if some in to go at there with contract? blend opportunity do through that the engage the evaluating a Hill, Kent are a and a do to and if of is lock kind see to of bases, you government you rebuild

Todd Stack

of be at actually New site, them that from with speculating to focused safety It's a Yes, go the We the where in we them a that secured for with discussions where Rob. them, NB before with our of sense Power over better I'd this to of Power thought and potential up levels our solution moment status last multiple really farm might any making sure need people kind with open you and discussions really the as we everybody. give of means we've we perspective evaluations directionally let the having I about would understand remediation really prioritizing might on win-win that had be going if them of Look, sort plan understand, us focus be land. coming that we've the from on a weeks, of for a try what discussions a we're are we or tell the foundations wind highest weeks. of giving understand it really on kind we're that can I Brunswick we around any what where few farm, wind the times on the course doing forward. really the just and been go-forward in outcome on the the comfort they of discussions

Operator

Ben next go BMO. Your comes question of Please from Pham ahead.

Ben Pham

lower, of so out at you're of mean over or of I will go? is a down actually in year, do how low magnitude Like couple plants. million $XXX time? it see shaking showing a moving you outlook, like sense look provide CapEx maintenance this your with wondering just how I'm like they and can but that you

John Kousinioris

so as bit, as up try answer little questions a can. the Ben, I'll I well you were breaking to

expect example, done from seeing TransAlta X fourth increased Keephills $XX capital some sure, work think least capital of at sort is A that what this heavier we looking Over in has Really, don't the would would $XXX as as would of as year. lot be we be. kind of year spending. to would look we've quarter, we're to a high overall a million in Todd, any it specific around say, spending think going at expect kind million But for at our hydro well, being, the $XXX for forward. be or sustaining to set that a going coal-to-gas I'd capital So perspective, view of time, terms moderate XXXX we I I what which still And of that spend conversion. the we're oriented guidelines forward. spend. about so we of we've year as of the million where we in would terms to being compared

little a I expect I more go in forward. is dam is going we us you to color see of seen now, as Todd, probably if way think, something which the we safety from you as haven't much of any I to can think want to bit add forward, that, know what don't that? spending until

Todd Stack

that asset other performance. But sure through sustain capital ongoing covered allocating were to see at you've the putting appropriate that step John, John highly definitely conversions completed mentioned, looking of that capital extremely we portions it, to as we think, in its a are make we our want we down highlight through the this year. did fleet we're valuable I hydro, an as would CTG

John Kousinioris

Sarnia, I for its And setting XX-year just would plant we're run there a that as next year, up next at looking bunch we're Ben, effectively. say of doing the work

an I think, capital, be XXXX. area So that spending be we'll will some in that

Ben Pham

that You Like XXXX. you also wondering the for you'd reward like to at how Do adding your your a on certain more just guidance? what's, think do risk year? Like hedges general percentage have to internally derisk do the are? you philosophy mentioned you like to at expectations forward to head just you're into maybe hedges? about versus where curves what's looking be your look And I'm next

John Kousinioris

Todd maybe basically a And to than it that color. team I'll that turn meet, Ben, monthly got Yes. assess some sell. and meets just think meet add like frequently position. through on of hedge it hedge even we we've It go we gas to the start, power over costs we're the input we effectively, as happy to to and more also to year. We natural our that includes when our position, isn't expecting our

So we it's that both. modeling look do And year. do modeling to fundamental We at we multiyear tend throughout do. a frankly, the

the what where any certainly And is as think something market hydro fleet view think tend in and We think directionally view. should we at landing an internal for in trying outcome where terms more a curve to perspective about perspective. our base-loaded that focused We tend to time, general, of we have lock in point given in prices We we month in the on. So, any forward. forward any to we're fleet units. where as don't our in be that lands we frankly, quarter, of assess in probabilities that of view, given go period from kind from pricing depending focusing our being be to internal really the and thermal view on as a

So traditionally, going of be of even us that we forward, KX terms would would where forward. be sort in going for at least

a gives of a that? committee, hopefully, with every a to colleagues don't Todd, add if also know sense. few on the along that I few anything weeks. to Todd you looks our is So that this bit you at want of

Todd Stack

John continues what QX for John the said. something that is fairly period to challenge coming higher we Ben, in a our and less we've dynamic I the to you where exact to year. executing so as just mentioned, year then prior of team into forward last hedging want is that interesting more it's should was about want level of just that It's do. liquidity be. year, back and to bit into more add don't more weighting at And a half saying, periods, a year. And QX talked were into our our bit this this the marketing at an prices and we past When looking think XXXX in it between and similar optimization of hedging represents bit program the last time be team, a a the to the

year, prices So would range, with say, XXXX, hedges. forward range. this as came And of the low I are mentioned, the curve the is seeing, QX level we relatively in into $XX what full $XX low John Whereas strong. we're

and as to volume valued being And of that sees in fairly so in the lock more willing that team QX.

Ben Pham

That's maybe on And cleanup Okay. Sarnia. great. more one

that year. a mentioned amount spend next next you you a Do a can new maintenance secure elevate up the a You few think years need the sorry, bigger extension contract? maybe potential to bit Or CapEx of little into little just you that an or contract, going bit contract? that maintenance to

John Kousinioris

It, it wrap extensions three don't we're at think we've hard up in on appropriate number in a the short I that happens remaining expenditures time working and we're time to an be perspective. and to doing. order. the the need where just at we the It's of more We're operations inspections triangulating for fairly extension, to that to Yes. really just landed particularly plant, are to there and from tied do XXXX. capital looking a so And point

recontracting perspective we kind more the we've opposed of XX-year from the historical of I bit done, it CapEx of any is maintenance it tied where we we of over even of run as specifically sense. plant to to The period. are think XXXX course time to the in the up really of and performance a where driven need to little a the set makes will being of ensuing to if potentially in as plant there that that be kind kind the terms run be forward of

Todd Stack

And contract the ISO the again, runs to of XXXX. end through

So there's period well that as maintenance us to through beyond. as required get to

Operator

Please question Choy RBC next Your Maurice comes Capital of go Markets. ahead. from

Maurice Choy

hedging question your to now. I you in come again, to right position first have but compare My don't versus is, what back hedge I QX want if

secured hedges your is on increased power what at than sequentially. volumes gas clearly pace You've production that faster you've a

difference Or where where pace? your power one under moving outlook liquidity? have in Eco case to the it is it a difference you price Is a this forward? versus is characterize So point, how you on you it hedged would on in a other? a Or, versus case

John Kousinioris

think of for I don't I try deal with got to answer to can mean tell you, try where position with with some thought I and and a deal you, prices to going to a based made to subsequently. then perfect to gas the were gas Maurice, honest. great decision our I'll gas position fundamental lock go. it's Yes, first, the be we We question. of discretely, I've maybe I'll I'll again, the on, power view the it try deal up

thought be what it, expectation we XXXX. into this our would would had up prices. balance of that we gas production going and in year for of But obviously, spike we with So expectation did natural we an certainly the see an the

that, amount at for an So gas gas of it profile us gas range. ahead as of that six a there forward, We of liquidity to as that months part it in of because, on in into resulted a sort a there on to hedging broadly a which lot we, XXXX production in to whereas, speaking, in had for of rolling sort was In was we isn't XXXX important the the kind lot gas $X.XX, as that in the expected, of is of liquidity early, in our $X.XX market. market, us Todd power. tend the before, price average said or side, That getting of position right? to reasonable think much lock

we curve the now as north go been view to than the we has period updating pricing be has a year. the on on our into where in kind going strengthened of a higher team the we've perspective, as think gas speaking, and from hedges that XXXX, sort a a as in we was depending $XX power perspective, broadly been of fair see the because, just of be fundamental sorry, from from that's perspective, that, to for price fundamental and So forward even layering ability hedging that,

although we for was, the perspective and economic production to on going what think we decouple from look appropriate on fuel sort do two an afraid the to kind our an not it basis, of we're decisions tend forward. So is at anticipated of do demand

it. how gives So hopefully, sense we of that a you think a of bit on

Maurice Choy

much follow-up what not point year hedges that because hedged maybe expect And next it, you you what that. as By to this does from as a AECO Differently. securing early for have onwards? to gas say to go prices

Todd Stack

America in seen team in years, the from team been of there's I a this fair our mean, North think, drilling. as had for prior past what we mentioned, we've view the I stay investment and and optimization elevated to over of I that our marketing gas lack that expect have while some prices Yes.

started that has around thought But we Now elevated But hedging expect turn those we prices. see about when already it's load, around to around. more against will base gas the and to turn peaking move a hedges. that power When correlation really to gas peaking. and we there's into when that of need, we're the between think price about power not you going the remainder prices

higher And can the peaking for on we're that those price in that view premium selling periods. because prices receiving that the we'll so our we a gas is power we, be absorb

John Kousinioris

of would say, look $X.XX terms of looking today XXXX I'd look, I of in be. prices in around. mean, were where the least if you're kind moves at and kind are of seeing cost at sort for the dollar you at But just we're at where things to it what of prices, sort terms Todd, of on

we're So with the cost position our pretty year. into going happy

set nicely I pretty think we're up.

Maurice Choy

regards QX your this there suppose, with still as you year than PPAs. you're before results. time on you the runs guidance? year, in part of I January guidance? just past, you want of were market one. ask to when our to when should be shared that you final hopefully, to some Obviously, and was your in working uncertainty comfortable one, can December share visibility And there were times I better a uncertainties simple then expect are releasing and the when last XXXX balancing What in last a the pool

John Kousinioris

thanks say, are we're a we landing December we work Maurice, budgeting I'd pin a uncertainty on as Yes, Ken to discussion time There uncertainties, putting understand bit so for of biggest room. one Hills, and speaking. in numbers the our kind of to the that. here yesterday, some where both Todd, a that the It's terms obviously, frame, that do terms Todd are. the better. in process generally the of probably we we Look, interesting. that's I, continue uncertainties, to have in smiling focused be little tend having in of exactly This were the is

yet haven't the it December, in guidance I have out in it would is. down, it We date market a our specific our be can of a we out our come to But terms sense whether set come think would get least at initial if preference it general, first in quarter. would out early if lock of to where we the

we're to what towards that's trying doing. So work

Operator

Your next CIBC. question Mark go of ahead. comes from Jarvi Please

Mark Jarvi

U.S. more John, you this Or one made at a just to and next is one contract year? the there wind in U.S. on the than targets Is of likely two maybe contract one those comment your year of balance the it to in one end a get year for about Oklahoma? the then more get potential projects

John Kousinioris

Yes.

from to even done. delivery that I expeditiously just would chain. a our be get is able year our derisk year to able right proceed and more derisk I ongoing supply from just discussions and fairly, I likely sort of, from some the absolutely there for perspective, or we'd which, of from a hard one to working really think, the perspective, next need delivering there. to we the asset timing and one And where contracting terms the volatility be then, time this see in perspective, two think frame an from prices, we to And we're And pricing are project. just perspective. think, that frankly, It, it's down lock some

Mark Jarvi

then, the sounds Okay. do update are that? to then mean might have of, it give Can different When you or project do we contract guys South settle solar your in with just Hedland of how we walk any can or close of whether you maybe guys a us kind you in I on And in through options once get pipeline think terms And us you FMG? the of some you can dispute like EBITDA there. about settlement. not

John Kousinioris

just Yes. Kerry might FMG. one I of terms is of Mark, kind to of of state play our that with where address kind in ask

Kerry O'Reilly Wilks

to approvals Perfect. of Thanks, settlement. Yes, the the we're John. in respect final stages

can imminently. at but nothing do disclose to So that to we market the point, this we expect

John Kousinioris

done. have close, to be I there. fair it's FMG before I we're think into pretty I back expect say, the And probably to Christmas, a it to it as And I come would mean, have customer we'd nice Kerry, certainly Mark. fold suspect, mean,

Mark Jarvi

And just of to those Kent think then on back it. be Or with you there like covered make maybe New for early comment Hills, are was, Got insurance? in your any by Power, damages? too like discussion it's just coming Brunswick to liquidated if would that? terms Or there delivery you obligations do all

John Kousinioris

you we a does to the that Power is can to we we NB have plan contractual that when that have bit on It Yes. tell one to make place. provide regime would that that. give interruption I for a us remedial there, through into comment you a put with time work the early have like an it

there we're and going actual a output we under the So the kind short generation time meeting that to contracted with the an address permit of pathways it, kind to agreement the of have shortfall. agreement situation to in the us explain this are but be plan of able be appropriate period that to develop year,

not, this we PPA So the about Power. that have time, at concerned with NB we're point in

Mark Jarvi

are your great maybe in for great. one and then Todd. shape I leverage are And it. really mean last your EBITDA numbers one metrics Got

flow deleveraging a lot You're generation. free of cash

You it on updated pay the maturity? of the thoughts kind views just delay next in you cash debt have the with or Whether do just maturity not updated just XXXX you've terms that? of cash, generated you and Any with do year. you that excess what

Todd Stack

Yes.

We think and mean, absolutely all thought had of economics I The making those looking just time. make you're we're the at ahead hold options. actually I of don't bond don't sense. work right. about

to we'll address much of that right, then have committed, have a that you're team flexibility bond idea and get to we push projects XXXX, how lot growth bond. But we're liquidity particularly So the those absolutely better have when and how of mature. we comes to and we a in going watch in

Mark Jarvi

great of do leverage? you cushion maybe anomaly you feel this about like sort Or think forward? least? I consolidated of you can't deconsolidated just think the go-forward Like given most just the like said And do you treat about now recent as you results, you bank really do have of, results on guess, that sort how at right sort how you like going

Todd Stack

Yes.

I we work. that we have get to look, said, growth can that put moving that want really projects we them we've think We like producing. quickly those to to to cushion as as want is really SPXX, get

due. debt debt. as again, As down on we're we as if far the opposed cash really as comes with flush to corporate to paying amount the corporate team we're work I've before, that if how keep $X capital now, debt right leverage, really mentioned, and you it. we I maturity that get about to as billion pushing it's may think exactly in around have that that amount go down level, to level that But think that growth focusing talked level and But really and about that's it

Operator

Your next from of Securities. Please TD Mok go John question comes ahead.

John Mould

a months. the changes for year so lay market the be of in like tough lot broader based the there just can that market, thoughts activity that the of years, any past the seen remarked just tandem relative facility a on Maybe over you've with and far land the in outlook decarbonization next to PPA just towards maybe last to the Alberta the the few from But and seen of the in maybe pricing that of seen there? strong your contract you corporate we've perspective, start this in full with we've scale here but market a given push and have couple more any

John Kousinioris

responses in the two an that to province, mean of of have We I maybe seen seen we've bit So uptick. pricing think, given the it. a kind I

just period of their might of C&I opposed generalized just a open of over And the having upcoming and opportunities contracting more perspective. fair deal that's for kind people otherwise to say interest, it's just from contract us think with they to than have sort I creating as a sort electricity being in comment, some been. and requirements that's maybe

would is for we're comments, sort PPAs I in though, in the players that mean Plain be there number my are definite although I of I at even size say, On you think for to of that's, smaller people Plain, competitive really XX look been, I of for, mean pricing. think, large available. things the size for is There offtakes seeing, heard you are PPA what see I that we're certainly the than And XXX typically would from still the States the Garden of in the market kind contract of interest terms remains that are contract focused PPA, being that would looking really willing experience, not perspective, we renewable universally. of certainly megawatts. side, there size had United as which Garden and larger the a at to good trying robust. in have offtakes our on we've balance megawatts. that you've PPAs I that pretty mean, where got are the of

So the market remains a one. good

I like I Todd, agree think, you think steady. we, probably it's

Todd Stack

there. mentioned, as last our think primary focus, the Garden you portion I that on is capacity recontracting And Yes. Plain and of

John Kousinioris

a look at typical there's a size Finding Southwestern do. is is on megawatts a focused to we're not XXX-megawatt that our project. of given large to and Ripplinger is benefits XXX where offtake project, thing the John, Alberta, us, that which scale cost project, For in when you the

require that's see I'm through, going bring of So to that's see creativity what a bit a it if and you partners us project saying. to to some

John Mok

those this, interconnection queue absolutely. come any terms of That's you the if and projects does, interconnection that apologies those once And Oklahoma the timing out but just there contracted wind clarification your potential on just where a in No, just Yes. get remind process? us could helpful. do are missed then on of you And projects constraints pipeline, are I can there?

John Kousinioris

No.

permitting to get. the received that pretty are of a I of kind the that all about sign approvals the time at PPA. would need think approvals we we're actually of feeling confident regulatory all you Not

[indiscernible] the you'd path the farms don't a that in as the Some actual focused over wind think of disserving terms ensuing we require Bureau of critical of give of of of them kind on example we're general, would and as little of we in of kind But the just permitting affected And be some that, secure the an to view the I the, would, can. period. consultation, land course transmission item. possibly you on sites just to the nine-month

out of it advanced frames, I interconnection the would done contractors, actual as in of and what I advanced schedule have at an the the we're time with costs the working offtakes discussions actually that equipment in think be. comments, discussions exclusive region associated potential and discussions for my EPC stage suppliers, construction, be the with entire the mentioned with advanced would stage. really in in XXX for megawatts advanced we an How

say. So pretty advanced, I'd

John Mould

that. there's future on one, but event-driven, increased just to can on it, this one conservative last based on how about your there, Your there, a years in And some what performance wrong that the the about there your phrase question appreciate is Or I I this maybe from that that about it weather year? you've on was side you into and not all been really to and you at have kind expectation doubled has it of going year? be the just has how volatility base Okay. objective Great. supported a reset think, volatility level you to is maybe is and so far marketing around seen path original way of guidance? the think guidance, gross want But where business unit think may is margin energy for

Todd Stack

U.S. I think West really exceptional about, John. it with between primarily interesting you the some West market would throughout year, exactly South Powerpool. Yes, California really, Mid-Columbia, of an U.S. and was spoke as through as it dynamics the the and

that guidance opportunities of to those in as make make take disconnect periods. trade advantage group thinking market it So to is the the a right presents. up flatten. our is. couple amount be EBITDA We'll we and to disconnects can and not, what to months, that able set a of But opportunity predict floor over XXXX it's exceed we've we good But the pricing the really about was some opportunities. last the fact, number set some then that of and think some in seen market it's deliver when not that, being be base the as like of to level positioned I of And opportunistically

flat through team price month to weather But event or last occur an tells we've the never event that's as drive what U.S. what so a to is seen market is opportunity. my you me, more so. can And or to going occur going going predict over lot the Western other

And so that's is positioned for. really what the team

John Kousinioris

a confluence particularly John, the degree I the of of our for average, in in least last terms now. prior case is general been a five the a a and always second would through certainty it's volatility have we floor of think, quarters. doing from because it that expect extent to doing be I a But years, to of, greater to with time in bit third are than Although continue what factors what example, is couple Todd, seen on fair it's have would that of perspective. over expectations than probably challenging. say, have, think, a lesser of metric would to but think it more kind I How And see we've Todd, that, fair would say and to conservative, the the the say, certainly, think, years, for expectation a couple I better Todd, been we I it years long period requires or ago, at will,

of So hopefully, that a bit gives you a sense.

Operator

Andrew Kuske go comes question ahead. Credit of Suisse. from Please next Your

Andrew Kuske

frankly, to to occurs And the the execution. question look an are a How you you to the overall where assets just activities? down accelerate revisions, related you deployment that basis in into ago robust guess had drop and you where you motivate that is an some Can about the evolution business environment I and your guidance into you your start back year had now, think plan place if that on then next year? question, and, market also do accelerated capital of you've RMW? a guidance really strategy, does

John Kousinioris

few we Yes. on are, Great question, mean Andrew. we're I focused a things.

feel, sure it Investor the things. where much XXXX, is XXXX. a team including three just trying Todd, today, relatively third potentially One foremost, The a accelerate and it's potentially and looking to we in I increased is our of contracted. increasing farms have we larger storage quite them of as and And of $XXX the That's than making perspective. on our trying under accelerate going getting size our I XXXX, would period do be, other Oklahoma think, and we're kind robust, said from we're accelerating. thing expenditure very would bit development We the that I in first million at capital to that so think, wind forward, is and in in some during certainly activity. we And expecting Alberta, already approaching solar as of have certainly of belt focused of the focused pricing in focus then Day, we're Alberta, an pipeline and time opportunities some that on on say farms robust which activity that wind

the perspective embarked So kind be Andrew, that to of of we've flows we and nice investors. the kind is we're of Company at it effectively period the way announced of least help pivot strategic the expecting that a transformation from those using of to that on to cash kind a I think

that you bit hopefully, a So gives sense. a of

Andrew Kuske

down sort It's X- effectively of about thought year, the plans, if does. a I the you, you're perspective helpful. and were? And pipeline much you've and that's the you growth this, performance future? base on solid to are then the guess the road internal the for thought your maybe this had plans emphasis in given than picture you XX-year you further previously It X- establishing on those XX-year more be And bigger

John Kousinioris

the see where the and set The have making really on is in hyper, targets kind I can get we making be kind right? world perspective. devil and that we're think want the accelerated that and the do sure I though, growth of We our a right the that reach say, an It's to a the terms of execute hyper in thing critical details, we get targets in we execution number of parts and that on the if I that really, the we technologies, compression to would we an we just we're basis. hard team focused of set we return from number We've that's sure focused working we've company. being Andrew, returns get in is mean, exactly and well of we're choosy going from on targeting to the we're to is just for right. that returns see that of execute disciplined, need. a one

Andrew Kuske

you facilities your follow-up you I or can return opportunities farms just to can may effectively where enhance I you your one comment. have you've on existing Do either sneak returns? adjacent build where on If repowering in do or that extensions got opportunities

John Kousinioris

and definitely we're something The yes, answer is that to looking that that is at.

basis. So near think That's is, which timber, there, farm wind can that I'm expansion I also and of Wind, XXX we there we so permits to, that some megawatts us or in when our we by have, to raised actually of of which big we another Pennsylvania, for that it cost Wyoming big competitive glad have, our existing not actually is example, level footprint the a expand an places use on we it. of the whether go first one that infrastructure assets do the see which to of

the the the sure, we're at expanding opportunities hydro the in use is at even oriented So, our really value. when if can that case. that's extract for storage in of some again, And of towards expression more footprint, looking looking that that province to water charger, we're Alberta I using,

that's sure, priority. So a for

Operator

next Please Baydoun Markets. go Your Capital question Naji from of ahead. IA comes

Naji Baydoun

are the to Specifically, I view to pursuing and allocation. I larger the Or you opportunities does back M&A? all balance you, of development any the you. still wanted this appreciate focus at would capital at change ahead cash tuck-ins? on guess, go is at But you just I on be have your project looking this point? just

John Kousinioris

we perspective So both at from pipeline and continually opportunities, look perspective. M&A a development from an asset

separate have within evaluating Company we that move to the process able that, the fit sort now and that forward that evaluates in a opportunities other objectives that of be may would the has. We team of they're

in kind that never of So we for Company. the terms we're grow process targeting track able get And that of pretty to of the our record that's returns kind I of a ending we're proud have. being that think and way

we're of that's yes, So a terms in what definitely doing.

would at from I that at repayment I do cash cash we say least pretty and debt buybacks, we that happy perspective, share it's growth, and and Todd to buybacks it's, is of other topic when debt from then bucket XX% perspective, look a and we look, that flow we're The are allocated for periodically share deconsolidated occasionally. a where we a It's we've that XX% segment. do is think flow I thing And that evaluate. something discuss that continue to

color? Todd, that So another know to add continue don't you if assess. to the pie I we of that's any want piece

Todd Stack

of size at. of looking that I think at the M&A we've poking were you sort also been the

John Kousinioris

Yes.

Todd Stack

at that that haven't single is portfolio regions at have or the attractive of about be opportunities. John, in bulk we asset where at looking typically, within build we And out to we think some review already this again, look anything we're that operating. team time. expansion it. point the been transactions, larger the to Quite opportunities at regions do are seen We what look or accretive frankly, does in we small for look would like

transaction So asset that, our single focus really M&A to of is on, what XXX-megawatt I'll XXX- maybe size portfolio. call or

John Kousinioris

$XXX of million to kind terms of think of tend size sort floor being acquisitions to Yes. in roughly in We that speaking. of our range,

Naji Baydoun

it as say, just or the I the can I with contract, Am you be reading on maybe existing only for reads the one kind would MD&A that And press release, of or I contract clarify The, ISO after new secured question the a guess, Sarnia? should just correctly? clarification the Or if expectations Sarnia. expires? the

John Kousinioris

Yes.

ministry engaged contracted I there these the agreements our as ISO we effective course So into we're economic Ontario they signed. of range remain team sure is with year the the and is kind until procurement become begin needs market ensuing agreements, the over the recontracting of there. just that with ISO soon putting The or balance the XXXX a evolution as the longer of so. the and to for the recontracting outcome is plot of depending effectively in of kind we're facility in expect meet kind Ontario as What we out the relook of just they're to doing to the in And participating the the on that the they of decade. capacity have and making which also discussions would know with marketplace, actually medium of evolve

Operator

go from Your next Bank. Please question of ahead. comes Luca Nadal National

Luca Nadal

expect? I first Kent early, And question, it look it's a we that but property. time what Hills line should we the could got settlement potential so regard? repeat My claim the out for What be not of regarding insurance in kind on question, would a

John Kousinioris

is insurance property recoveries of We in be. really obviously, notified do any have really and too to any the reliable our even able expect situation us the sort you of would Kent us provide insurers be be give It is recovery. on early terms for get for to the And recovery what insurance of be business have able guidance premature it insurance some to Hills. insurance would to what scope the interruption We scale we're guidance or timing of do in with the But early, that and really to facing there. been there.

Luca Nadal

quick a one. other And

engineering the the for timing of any if know to give the of are on turbines? like other able In terms guidance the don't you the, I assessment,

John Kousinioris

Yes.

that work ongoing. that's away at say, And in two right now So areas. is we're work really maybe is I'd my least estimate the weeks, getting probably done. Todd, six from best eight weeks our, broad

real them also the the focus understanding the current a of status plan. path is a One foundations around on to remediation and of

cause bucket trying in The just we forward. causation just failure. the move is root situation understand the of second we We're to how really can the ourselves understand find to better

those really But end a just we'd around different I elements it perspective, the right clarity I I the well. elements, realistic the at. get think, where or terms clarity, it, those got think would in of it's be of players year we've time earliest think that are be would better from we're in being two involved a about and key good that as outcome, So timing

Operator

Your question ahead. Patrick Kenny go of National Bank. comes from next Please

Patrick Kenny

Sun come to tailwinds province. wanted here in economic back the X just the pricing to I environment, given robust

capital we up, a year moving assuming up. clarity that or do just renewables intensity project front And are back Or get come onto power does at basically standpoint hold point? towards on you repowering point? from standard the to Just at next over continues allocation does this X.XX if some so ramp burner the the demand the

John Kousinioris

shift way is X, in will Yes. that sort pretty Sundance market terms we're of more internal coming development perspective, some originally in and we TransAlta the focused as of capital time. allocation leapfrogging of configured kind on being, technology And look, we have to a much the than project of forward technologies developing really strong seeing. forward. that bets back expect over demand to I'd don't of come in view see we increase of terms additions really the make of there that developed. kind in kind looking of say, of opportunity think, a of the certainly load how large gas from shift kind that Patrick, be also the the we not of we're go and pretty sort and we comfortable with rather candidly, We're to our the kind merchant or a going as understanding hydrogen of it of was a

Patrick Kenny

off in to with $X line direct some a Brookfield as you, relationship it opportunities perhaps, recovery or at be your opportunities just just then Inter with able accelerating your question, first thoughts leverage recent related investment Again, just your might, in plan? there curious Brookfield wanted Whether Western billion accelerate cogen Pipeline your battery decarbonization And essence, on certain to give Australia? developments? look get a given waste how or you're storage at perhaps to heat John, if

John Kousinioris

been opportunity when length Yes. Patrick, they've arm's is, us. sort pretty All been from it arm's pretty to I say, can to of date, we've comes length and development,

that So there when focus hasn't, it in by the But but approach mean, opportunities rather have Alberta terms in a much than landing our work is, of the what really team trying for we on of been with that very growth in to kind in is of did kind and kind tandem a in we of we And them. date, sure, I a and being focus of years see of to a that never, contracted larger for performance of then us scale large, never cooperation, on focused for they say to sort us. involved stand-alone understanding the essence hydro before and transactions kind that's transaction because ago. few the

Operator

[Operator the your closing no questions remarks. phone with Instructions] on There Please are further line. proceed

Kerry O'Reilly Wilks

Michelle. you, today. for Great. Thank call That our concludes

don't Thank and out great Investor to have any very you day. further a reach team, much, have you please TransAlta If questions, hesitate the to investor team. Relations

Operator

you call please for today. participating does that your lines. disconnect and Ladies you ask for and thank conclude gentlemen, this We your

TransAlta (TAC) 9 Nov 212021 Q3 Earnings call transcript