TAC - Earnings call transcript Q1 2022

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Operator

Good morning my name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to TransAlta Corporation’s First Quarter 2022 Results Conference Call. Note that all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Ms. begin now may you your conference. Valentini,

Chiara Valentini

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

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

John Kousinioris

first thank for our XXXX. results everyone quarter call and morning Good for Chiara. you you, Thank joining

we the We the are the or and of prices territories share, the Nation, and Tsuut'ina, a and us fleets proud in in of to and fleet. and in Treaty which Alberta both quarter. expectations TransAlta's pricing optimizing per of of periods the performance acknowledging to and run CADXXX want company delivered in of Niitsitapi, during first are and for the Stoney-Nakoda the of adjusted fleet both the Siksika, cash I which in the million Head our line CADXXX advancing X. Piikani, the quarter solid region reflective the value made as traditional reconciliation, by of I'm towards commitment employees. by our Metis deliver spot located We EBITDA of excess million X an and focused TransAlta flow Alberta. have performance Alberta, CADX.XX Office Region the we Kainai, priorities with where free is our peak part home well Alberta were The progress Nations includes broadly gas the and realized that our First People hydro Southern the and our as in today economically As quarter of our our in of had operational of the enabled the average dispatching diversified prices of nature our peaking begin on

During a priorities. we delivered the number key also of quarter, on

Hill team wind On megawatts with formerly with of Facebook. Horizon project secured announcement growth side, renewables the XXX the growth Meta the development as known of our

three remainder on two is transmission of megawatts for on additional megawatts entered Wind confirm reach this that that at our growth remain year ability customer at gigawatt targeting track deliver confident expansion we of share to are have recontracting with remaining now remaining and the megawatt the With Switching you all Garden corporate at the And facility projects. to two Growth is capacity our deliver Australia is later renewables extension now able customers with our now Plain the Amazon at the White at up the of the to into Clean our to XXXX. in site, extensions on We're I well Rock industrial of XXX contract XXX contractive PPA a megawatts XXX% we as Plain project Wind renewals investment-grade setting counterparties. industrial Electricity of place grade our facility. are our can to on now investment Plan. achievement customers Keith all life in executed contracted well decisions for Western an This with As Sarnia, We BHP. XX Garden annual with another a activities PPA XXX counterparty, Mount our with in I the XXXXs. target significant facility. with for into

Unit both Sundance units On X the Keypills and retired coal fully longer have X no operating Unit side, now and coal have Canada. transition we in

shift. the federal among strategic plan achievements million reduction XXXX X% meaningful our our emission we Canada's annual particularly a and XXXX, policy COX risks. electricity tonnes Overall, emissions policy XX to government policy federal is by emissions that new as target. clean and X.X in our including reductions XX% the reductions the transition coal and paper representing of tonnes compared reduced announced the XX% emissions validate support gas carbon million in economic XXXX The the natural growing of decisions reduction Our to have most the year-over-year country, faces directions on Government XXXX standard reductions discussion confirmed announcements, from recently generation annual

is for an while to to net critical just goals that on a growing global alternative a mandate Day energy Investor manner developing is Identifying demand is Our established have with outlined to we that. we that internal innovation reliability, renewable deliver team the now projects for electricity with at a company meet path pursuing carbon as last aligned in our year. and principal a do pathways zero focus

Ekona Fund. investments including the any deep to transformative in we to commitment platform, focused hydrogen industrial made novel investment, CADXX we a Frontier technologies on generation, with is In million help long technology made have term addition critical and making companies impact to decarbonization, fund advance energy partners to recent storage, our This decarbonization.

our approach targeted generation taking company. to a to defining deep directed for is diversification power this the next solutions and of All of

progress assets. our from renewables advancing make contribution EBITDA continue considerable on We to

With reached our quarter, assets XX% renewables the wind EBITDA solar target the XXXX. step the XX% contribution North toward year, addition Carolina contribution our by of level and facilities in drives of storage and of last end the from another

new million of for result AUDXX from low the April, of The clean network cost year X.X wind Morgan progress Plan, of AUDX into in is in the And we've electricity project will be race by The in from Commercial project by and a capacity is two decarbonize between our of considerable eighth transmission Western the wind between almost XX% annual expected CADXX the proud billion ESG renewables of bring progress Rock the to in in AUDXX the with to million and expected returned in deploying entered as and a operation million five-year with XXXX project with fixed $XX Capital second million. existing wind PPA next of farm delivery through We've expected second additional XXXX opportunities $XX We're once the the long-term megawatts under in approximately EBITDA million to two shareholders carbon megawatt Australia, and XXX We're XXXX million. and annually generating million generate operations the our over EBITDA supply March, the we're project our BHP's the made. will the of shares. into EBITDA from project International full half projects Canada, Mount the Oklahoma. was excited of these gigawatt target to costs as which annual Growth been decade. goals unfolds that were has project supplier plan of buyback be Northern to over the agreement million finally, XX-year Hill capital Stanley to the gigawatts A. of The projects of We contribute developed with just to capacity with achieving with U.S. CADXXX we've will reliable bid of capital EBITDA also Similar rating in be facility to the XXX to and made support our achieved million term. from from our execution our Hill across States common Energy see connection of over Vestas is to Horizon a Infrastructure issuer of Electricity capital the million. TransAlta cumulative increase project, megawatts. advancing to the been expansion the to a half XXX low of White of be our of and an range Meta's XXXX of by active Horizon course has Goldfields XXXX. the U.S. for Clean As is PPA of a of million sustainability XX% Hill in of and upgraded and growth system CADX the have be with deliver and nickel. we We target construction their representing United Australia In operational, plan the the for annual facilitate our fully to our project a normal of output the XX% agreement based CADXXX by BHP BHP. wind Horizon operation Keith projects supports AUDX we fleet EPC a Meta and in and the to of completed support combined, Construction the will under competitiveness and target secured turbine the Alternatives. providing announce incremental to to CADXXX BBB estimated our EBITDA

actively development We and of development to U.S. a in development project that opportunities demand site disciplined turn We expect a we market our category. several in here see XXX The the opportunity has Canada, of our wind growth pipeline potential projects growth Hill looking to And add number renewables continue to strong now still key recently have U.S. a in markets. there. from over added in plenty U.S. of development across As remain we're the number moved Horizon of development the the the for sites to into in we grow highlighted in new projects I pipeline, advanced the the we've XXXX. of and at megawatts on primarily that construction our remains category under Alberta. course to pipeline to for and over pipeline

Wind and the demand up continue we see advanced corporate development an to stage project to in Our of moved customers. for PPAs from renewable Tempest has market

our team under Western phase. construction Our and We're Keith seeking advancing our And opportunities into we're the and to transmission in opportunities opportunities the there to in to others and seeing through decision on moved additional construction definitely Australia, advance to actively the in customers phase. Mount sites to we've turn our financial contract projects the is projects support expansion results quarter. now mining Australia remote of expect with several BHP and I'll us in projects our for investment it Todd final reach months. coming take growing over

Todd Stack

planned per CADXX more lower pricing of than just in X,XXX price grid. and quarter settling by you, quarter, our both to capacity mainly first warm Alberta, fewer energy was than to are John natural position The for and In QX This in province average resulted our hydro, In renewables gas. to of factors dispatched was full a and the wind the the price good peaking compared portfolio morning sales. generated and in expectations, from and our facilities due XXXX average the company than electricity. well over fleet to energy were throughout and capacity and when Strong provide this year. everyone. as QX gas, power hedged gigawatt-hours price We outages baseload as slightly in volatility CADXX the XXXX. and was megawatt-hour. of Thank muted year needed was affirm and lower quarter, at benefit the fleet price weather across lower and transition, energy unplanned last the on And softer the order the volatility in

the current spot gas, price had the levels, price carbon given quarter. significant marginal cost increase the of generation in However, the the advantage combined with in natural coal-fired

made unused the corresponding This allows and units Given was hedged market to assessments also dispatch any down the through supply on our higher conditions, and the daily customers us whether opportunity that these costs. emissions we optimized also through to resell avoids market. and gas fleet and our carbon choices

offers prices other units from of future, continue generators become expect carbon in natural As the market retire in see the near as the or competitive and stronger reflect costs power to less rise coal-fired gas price converted, and will correlations and between to gas. we fully

demonstrated of a per the in due and pricing average XX% contribution EBITDA have a The transition realized ability reduced XX% CADXXX lower XXXX services over carbon lower to of realized in to price again segment. merchant a quarter, the QX peak lower costs price, a Ancillary was in the spot premium energy in price. which natural -- quarter CADXXX Alberta merchant from XX% CADX price With was of of revenue first capture with fleet the a During megawatt-hour. quarter represented units realized from prices to our to premium gas, volatility. lower pool in our spot due per with resulted to of lower now converted and compliance the the fully hydro XXXX. megawatt-hour decreased per from ancillary over fleet the of megawatt-hour, A CADXX over by our hydro average services, the quarter megawatt-hour gas

fleet a realized megawatt-hour. merchant benefit the from also wind extremely average Not resource, CADXX merchant wind strong an of peak performed we well. benefited price off fleet Our Alberta did in only pricing on and per strong and from

XX we at at an balance approximately generation hedged Alberta and have average price of natural gigawatt-hours million of gas the XXXX, of per of at X,XXX our Looking CADXX DJ's CADX. hedged of approximately gas megawatt-hour

megawatt-hour continue of the contracted peak see the In pricing order our addition we demand per range. in to CADXXX we prices position market and during times a significant production, forward open year to to higher balance realize for the retain in of

and partially was well the Hills. the was incremental This a decreased merchant resource. Carolina QX EBITDA Unit from increase X EBITDA which and XXXX contributions in adjusted first well includes Adjusted by wind the of to our wind Centralia. extended contracted North million winterized at from outage increase CADXX increase the offset this quarter driven fleet, delivered Keypills due XXXX. in fleet, million solar at Alberta at as Kent to segment, led of facility and segment in energy performance adjusted Our transition as by the was which largely lower higher EBITDA the retirement in quarter. by facility, coal XXXX the and from solar was assets CADXX The XX% year-over-year with and Operations as higher the gas production our as from end line XX% cost of

the to highlight in EBITDA. quarter. guidance our was delivered and EBITDA for all also financial with expectations. results also their with our line of range. going in the Our in consistent XXXX CADXX November the maturity CADXXX share million. million, million the EBITDA to for DBRS consistent TransAlta's and expectations line expect range energy In we or quarter with with In marketing stable our delivering the CADXXX company. XXXX cash before of free now expectations still strength CADX.XX debt million, guidance Free free and CADXXX with low broadly team XXXX delivered Overall, term our segment were of consistent line BBB performance flow results first million reaffirmed flow of turn the cash flow performance and and our I of with normalized EBITDA adjusted it CADXXX refinance to cash per in with expectations rating, our our our want in longer thank I'm matures. our to our to for continuing we quarter, trends employees

to and rising us has rate rates. interest secured team against interest Treasury Our proactive been have locks protect

including XXX under with over soon in or future closed extremely billion positions liquidity, cash. Our our and of projects growth of strong. liquidity pipeline, balance us to We very approximately CADX This under megawatts fund available to including construction. the our well be sheet remain billion quarter CADX

John Before turn alternative things I renewables. back to TransAlta

addition Our of megawatts held in results have ongoing as Despite operating contracted Kent fleet quarter's majority each quarter diversified alters in are and operations and XXXX. Hills, the TransAlta's of full wind the our Overall, consolidated of well and the for NWS in of the operating of suspension solar renewables of at TransAlta the resilience growth the the are growth core mark assets XXX investments. the assets the contracted XXXX demonstrated results. fully as results regions of generation within our value gas our

quarter, rehabilitation of cost NB December project acceleration in in resource now among same our to quarter. agreement schedule. renewables due increase is advanced during adjusted during of CADXXX of With of consents be their For say will of design, to The that to which a an term obtain The of have expecting first the growth a XXst, Hills, rehabilitation second the Further, three million, XXXX, our final in million stage an and quarter, including has includes, turbine. now from soon. compared and strong range inflationary period CADXX more each cost PPAs. the expect Power to with the and the in a CADXXX delivered under TransAlta position plan The time excess discussions of with increase net pleased the the goes to increase we construction. We're at Kent pressures, and we lenders wind conclude and to the the commence was things, to we estimated contingency EBITDA, robust replacing of in foundation to and our million is Brunswick failed increased previous estimated impact with principle incremental are an we're production that respect Power a XXXX. projects the our finalize result very negotiations other New that our

will update finalized. construction expenditure, as terms, timelines a further unexpected and commercial We are provide terms

funding upcoming needs. the liquidity We at for have strong RNW

call facility, cash CADXXX the that, of to at end addition With the committed our over In quarter. to million credit CADXXX I'll of John. turn the back had credit we million

Todd Stack

Todd. Thanks

advancing Garden indigenous across are our Transmission for sustainable expanding later is on construction Expansion on progressing Western recontracting on Cannes strategic delivering power energy supplier on with ranges; on the with on highlighting the EBITDA focus the of XXXX, Horizon equivalent cultural Canada, projects clean highly rehabilitation U.S. decarbonization. and and in a more far High and at Hills achieving Sarnia Centralia, and and project our investment guidance priorities clean objectives, XXX the training which In projects achieving our employees and wind to Australia; reaching having I the and for, expect additional Rock Northern to, to what As Mount the cash quarter; advancing projects, in key development our and our of and I'd to within XXX of flow of this by like renewables investment reclamation and progressing awareness makes great Keith megawatts solar attractive Wind, decisions which Wind we so at providing pipeline achieving QX; solutions employees secured think provide and able value States, includes TransAlta our goals; growth at progressing details least XX% opportunity. our to XXXX. work and United I ESG the primary Vale female our a track XXXX, of following that a be to close look free year, all COD ISO megawatts choice be by storage; at this final goal customers on continue and focused Australia on we're Goldfields we're White Hill, at Plain focused

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

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

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

XXXX committed XXXX COX emissions target We emissions reductions XX% this are by have ambitious a more setting of to levels, adopted science-based reductions targets a and from year.

and on of our In inclusion, to focus dimensions our performance. shows to our good all leadership ESG commitment barriers removing through addition, systemic diversity, equity, governance across commitment and

set realizing on team an diversified extensive focused growth talented value. and a of Third, opportunities we have its and development

in foundation, Our and XXXX Fourth, and our we in liquidity on our balance on company sheet XXXX. our pursue a track growth. strong, we has growth delivered sound ample and is have financial execution early to is that pipeline

the results people, our an the electricity our turn want clean I focused exciting time future over asset needs are thank serving as Finally, deliver this work low-cost, and done its and Chiara. Thank on you. all evolution a our for employees and back people we're to and of the reliable, our in to our I'll have and leader well-positioned that they in quarter. generation, meeting had contractors our customers. call to for TransAlta greatest the

Chiara Valentini

please analysts the will John. the open for media you, you we questions and call Thank community? Sylvie, from

Operator

Bank from Thank your be of you. And [Operator Instructions] Dariusz Lozny Please ahead. go America. question will at first

Dariusz Lozny

in on morning allocation. bit and one kind maybe the the liquidity your the Hey, year. guidance of little on before a options, guys, QX like on projects Maybe relative the robust cash that's pipeline the how for have little did and that a quite here? other in cash you My good thank fairly time. of guys in capital bit about for guys bit you guys hand you you available Seems or the the first are of thinking just sheet to and deploying balance context free buybacks a flow

Todd Stack

it share out purchase annual of I out share during the we our a period. up saw year results that opportunistic we opportunistic, when Look, and mean, QX Darius. pick would And blacked continue great price, and opportunity buybacks. during on that to be I did were as fell after it we buyback last morning, and really We QX our [indiscernible] Hey, to saw -- say shares. release off

John Kousinioris

is construction both TransAlta do commitments both from you would are when mid total of I and too the TransAlta of range -- projects CADX.X have I we Yes, think billion in put sort say, Todd, I that mean, in of Renewables. sort spend companies, terms expected our under and capital

within way the target. think we're I the ranges kind we at with of to that said we're our comfortable So, looking falls tend capital, we've it

Dariusz Lozny

switching gears. that. maybe And great. you Okay, Thank for

more I on away customers take on up in Can the Sarnia industrial MD&A It you that half able be visibility the sounds that update that the contract not that's market to might guys few point? clarity, you for give whether but or XXXX? guys second locking you update process from process, like the is where of have into at congrats will the a of ISO's So, years. some sort extended will their by the

John Kousinioris

That's what to kind that's is and for -- there term our a the actually what ISO awarded capacity out expectation basically is an come for has sort Darius. running RFP be of of The medium province.

I think that goes from XXXX time to XXXX, period. that kind of

We that ability in have through current applied procurement now would capacity successful people of QX. see coming seeking back and are We're doing. for the actually ISO proponents of contract them and go capacity the being schedule to to confident for they're of contract all kind in that a under pretty to the time our that right

So, think you've got exactly I it right.

Dariusz Lozny

the in Thank the of for I -- factor for great. just on Is pricing or or could If one year. the higher something Okay, full you. that higher sneak for forecasts expected updating in Alberta here? you're there is for that expected of QX your the forecasts more your balance in coming XXXX just than quick one,

John Kousinioris

say, think to pretty over I would month the so. forward expectations in be or I going and increasing where terms last curve seen I actually market pricing the the the course we've Yes, is of significantly, of what is think in jurisdiction

CADXXX that I think kind is your pricing range. of in balance now Alberta of in

and May, in CADXXs. in already we'd the upper think -- May be I we're

bit is CADXXX a about then a CADXXX. over June QX, over and And then CADXXX. bit think I QX

I reflective we're costs for in is general, think have market generators up. fact to gas kind lot reacting making that of a in of seeing the variable the So, popped the of increase just prices. the sure what And just just

Dariusz Lozny

very Thank you it much. Okay, turn I'll here. great. back

Operator

Thank you.

question Hope Rob be Please at Scotiabank. from Next ahead. will go

Rob Hope

takes Good you morning. in and for through I power the relative of of to want on walk Can maybe guidance you're that pricing. some terms just Yes, the guidance. us to your seeing outlook follow-up puts

well there we gas pricing, So, imagine upside the go you tailwind have as it? do in You be highlight portion energy the the of potential or and through that on a good a as should year. rest I locked of would

better there you seeing? that looking guidance? any expected headwinds you're -- other when when put you So, than are you are out directionally, Or you're

John Kousinioris

Yes, we as morning. impacted quarter well of one-time when at of at way, a little a quarter -- first looked bunch first the the we When events had that by quarter, looked bit. we the good the sort

provision we So, go-forward are was don't a of to company our candidly, the things in that from have the the through reflected numbers of costs actually XXXX. those any on the on in change QX year. leadership impact went also that expect there some And And in occurred that expect the with to balance issues basis. would that a not QX we

I it got think you've right.

rate compression, pretty would little QX. that trade pleased Todd, April, with QX, we're they're bit first of, in our terms pretty sitting. reflect, referred happy as We're of seeing think bit of floor strong QX, kind to say, position. I our is, seen in comfortable in the we're gas very heat We've a was a candidly, the progressing. I quarter, market pricing I improve we're and Pretty where with whatever there think where and

So, expecting guidance also better about we we from pretty performance the in anemic. terms in feel net-net, good are. pretty of of QX, We're Centralia, QX where the was QX year. certainly balance

the that bit say yet, delivery the continued I trended -- the and was a of year. balance pricing little the in the life for the facility, costs would the strong seeing but balance in we're of to pricing we've basically weak, saw our higher, which think there locked coal and strong of I Pack we for were Northwest, pricing

say, anything you more, don't would sure. know I certainly I if that's Todd, to So, and to that? tailwind headwinds, overall, for add want

Todd Stack

the would in mark expect some I QX. I was, the the the energy it we of transition Centralia, say, year-over-year was Centralia off to highlight decline segment, the going to retirements there. units of do

John Kousinioris

that is rehabilitation to other I rehabilitation. turn is would we the It and expectation we work be say, begin The we that Kent a I our quickly, pretty on place thing that where are would in from that as getting tap, plan say we'll see our Rob, where Hills, it revenue begin want would actually expecting to the be.

Rob Hope

juts conceptually, Like a where solar, heavy benefit right. just been has All development the chain. And versus wind on you're side supply as right given seeing relatively TransAlta follow-up. now, is which a

move forward, development, down potentially side double increased the solar on just solar and As this seeing push the wind does the in seeing you off we're to of you some versus challenges -- wind? cause

John Kousinioris

be. term of we I mean, I in of look, what long kind view think Yes, terms -- the technology a will of take mix

you've I I got experienced in solar. -- the wind think we frankly, think, as in more it terms have lot wind development exactly now of right the And, solar. a versus right

Solar new was our to is the mean, that project project really Northern TransAlta I we solar first that is built something have. us. relatively Goldfields

So, water to continue mindful more for wind technology on wind lot something to and pipeline, an see when than for of on solar in the opportunities going you keep our a disruptive as forward side. look weighted of oar And us it at see to just sure. is development but we pretty a solar, it's sure, we're we the for it because

Rob Hope

Appreciate the color. Thank you.

John Kousinioris

Thanks.

Operator

ahead. go will Mark question Please next the Jarvi And at from you. be CIBC. Thank

Mark Jarvi

everyone. Good Thanks. morning,

rising about and the Just the coming talked back gas the the power year prices. of to balance and hedges

spark this to look and current spreads think gas dynamics? hold at you flat assets, or given do the your expand to of balance those trying you If conversion will coal the year

John Kousinioris

a Mark. it's morning, Good great Yes, question.

would anticipated mean, improve certainly would say. a saw say, that certainly, year are prices I the is it think, looks than gas I over expectation team our end. first higher mean I what improve I that Todd regularly. at we I be in they quarter, would Our -- we bit, they'll

overall portfolio for year, to are of hedge expecting an looking little we see were a position bit the but at we expansion. As for the the

Mark Jarvi

-- any XXXX. hedges then And beyond Okay. material hedges

You guys next some for gave year, year, nice term the gas a this side? disclosure longer and on bit for but little anything

John Kousinioris

would, say going just I Todd, would memory. I I'm Yes, -- from

hedges would age, is typically, kind of, weighted would of think I rollover years and a say hedges would typically that term what think I I of to say range. longest see that in half and probably our average kind would be the three I'd when a the I they say be of year a kind sort would you of tend

Todd Stack

power-- the On

John Kousinioris

That's side. power the right. On

in terms year gas the first of terms Sorry, and in, terms very are of on we're the for it's that Yes, much the we XXXX. position third where in in side, of like gas the supply. of just XXXX we

Mark Jarvi

what segment, just that in Can some and I on in color corner couple terms of Okay, higher persists hydro or competition? competition, a ancillary not happened side the the a some more -- and in around talk, kind of whether also of around OM&A mean, filing the the then things? little lower, bit give -- a you MP, comments,

John Kousinioris

Todd, ahead. both want don’t you mean, why -- -- can I we Sure. you go

Todd Stack

of one insurance costs ancillary is it costs, that insurance I'll for really to just we're the third a I rising accounting I take about It OM&A with a policies see not trend one of John, probably most think will what probably of in really, associated is that so seeing across it's our the insurance know Mark And, bears the And of there were say of I'll if the year. class. of brunt services. and if talk it for main valuable that you asset. increase highest you noted the the our coverages is discussion. want the the the Really, in that drivers a more it industry. balance is is is don't

John Kousinioris

were the AES When talked really about major don't more issue. I should team, ancillary Yes, QX this our did We think, that's Mark, that I no, think, a and quarter, mean, think we that range, they I we difference in the roughly in year-over-year. I big bit And see range. pretty in but I think to a I think were XXXX of side, so competition on that for our was CADXX AES talk services. mid-CADXX the prices

-- around have there Our fact more that more would team lot judgment year. a the our was volatility sort the last of optimization of been just

energy been volumetrically is I -- actually So, particularly pricing think actually were on from caused. and year-over-year last volatility talked price going we the in would than how the performed just got the And the in the many there fact, side difference in important how path that of path the AES ahead portfolio saw, average that hydro memory, and on we the portfolio. terms have to often was, times the but just the to both year, the February we more average year-over-year, the what you and about it really, prices, for

se, the about in than worried would saw share, I quarter, in not market dynamics per anything. our So, of the just more just first the that was pricing say province reflective right now, it in it's of the we kind

Mark Jarvi

Understood.

time Okay, thanks for everyone. the

John Kousinioris

Thanks Mark.

Operator

ahead. be Please Sam BMO. go will Ben [ph] question Next from at

Unidentified Analyst

Hi, thanks. Good morning everybody.

PPAs any of, the company a to that anyone more the the the wondering to than you What's I'm contract dissolved or what competitive a on Plain's are -- are there announced what kind renewable side? corporate you succeed, You more gives advantage Amazon for looking else for? -- and Garden additional counterparties as other power contracting

John Kousinioris

-- the and when can Ben. kind what the look, experience and Look, look good Great morning, -- I have to I marketplace. speak in Yes, question. we we're of only in mean, at we doing that

deliberately. service us customers, of from actually for ethos high-high kind they one things. I we end that programs get with to a of forward. we of customer we is been on taking and We very responsive that highly approach three based say go around look the and we're key the think feedback to is touch, then One, getting customers into up would just that's think have this the something that the like as really, within kind with with training really customers like organization I differentiators we've working I work high dealing try is

that expertise one. optimization discussions. have deal be number it's fact generation broad just Two, would the that actually, having expertise, for of trading we of and and customers say that with would we like I kind a So, the

them and discussion sometimes candidly, get journey to sort think to of journey. through that have think, want of the to. we've helping I they something in we that involved refer how And on, that been own kind And on their and is and many are notable plan decarbonization as it relates

would I second be -- the would say So, thing. that

going to of instance, the where There's by much thought getting people a them The get they wasn't is, one come we're get actually day. in pretty something, we'll they the to on than developer know thing more delivered a done. what been that third and just bargained us, for. that And at they they'll they've the it that of projects all in And get the They we'll end bargained sure project the were get when it lot time. done aren't markets for. they're

we but of a I are that that of that end experience looking on. just have supply good people strong also in of you hopefully relationships OEMs. really you Look a up we gives lot some -- at to So, that a team, things have with bit factors qualitative sense. a leveraging, very a wind, operating we're chain to of Those more give differentiate that sense to wanted looking ourselves we are the the

Unidentified Analyst

to mean, additional I technology? that around helpful. very considered monetize Thank that are looking think to is what be up? to they're source leases, Ever there's at That's And I going the any want looking some in offshore interest you. and U.S? even ask also, then your thoughts wind then there I opened

John Kousinioris

we've to they're when company, not them. competency not kind we're of mean, and are years, at terms opportunities used the and service, a and onshore of our brought table versus actively a what of different M&A core bread the the and up, butter pretty over kind at come But Ben we opportunities look we the if now. obviously, had to it. that have. right to anything came We're to our it's Opportunistically, pursuing facility that potentially of I -- game it's would team develop a wind. attention looks Yes, something in

have somebody from think require circumstance be pretty done. terms a it of mind it be in to what But of get would it So, a not unique on partnering focusing with it's we're us I would to that would pretty unique -- top development.

Unidentified Analyst

Thought Thank Okay, you. I check. great.

John Kousinioris

Ben. Thanks,

Operator

you. Thank

Next will from Please TD. ahead. question be at John go Mould

John Mould

thinking got Like the given our maybe, new for maybe co-gen then uncertainty on Standard firstly, targets development focus And Good renewables? are the co-gen. decarbonization broadly? a right with appetite allocate you now over to seeing Canada in co-gen, your everybody. any to given how about maybe are going you under Thanks. be in onsite treated on co-gen Canada for more to appetite how capital you and question to it's Clean the morning, and start or have U.S. guess Energy just I about long-term

John Kousinioris

Yes. Good morning, John.

bunch I plan. terms a two on on is, also, looked say it's three certainly involved of customers I your meeting probably interestingly, greater I would context team for of in off, see the to expect of you've through it what think but of growth the potentially amount we're needs, Having back fairness opportunities and I years at, terms Clean existing we in at that. a in of are response, with non-gas. But more had comment co-gen that was them areas a the of think Electricity regulatory and expected probably I think, seen they're kind foreshadow fall of kind that internally know, perspective, sort when environment we we pursuing that cogeneration, a as candidly, from think typically effectively -- runway pursuing around the day, our or being We've we're developments. ago, and end, look kind focus some one of of Growth looking isn't core a and of it and you discussions their said in that, we of the

So opposed natural in basically for fuel for gas fueled, used source example, as the terms to of facility. being the hydrogen that's being

increasingly good think it sure. existing the in from the perspective, that bets feels opaque. it's you unless And I is particularly still risky of -- long-standing think environment, making mean, the think a a it of sort directionally, pretty customer to as gas I I think we with. to those of relationships -- see hit have But be be it's kind challenging and, big and serving I on customers regulatory head challenging we nail context the we going it's on

John Mould

more appetite any And, great. a presumably the expanding of about you term. partners? operating Greenfield that those term without How with Okay, of long are some local gigawatts opportunities? of that. you Quebec, Thanks for terms maybe for I'll longer there part in on X.X then couple maybe and, or tenders coming In there or one Are in development. just you sites sites, opportunities ask with market? there thinking local more And have specifically,

John Kousinioris

a Yeah. it's It's great great, question. a

as other Quebec, at, sites. bit size we done if a lot of sites, have any you've able on disclosure maybe so is, that other is, a because one footprint to the our little we have looking don't of be that folks of of have our think there than to from other see be that our jurisdictions, the we're I things have there's work in it'll can, of And the the grow our We to So, an frankly, increase sites, into pipeline there, for we of sort some we to pipeline, existing don't in of bid seen, challenging. where sure, opportunity it. for some

that. jurisdiction to I no to right we're joint see seeing somebody, like with venture RFPs coming into proponent as You that an in know, opportunity don't way if in something now. a our really wouldn't comes the we the say that being, But considering us

John Mould

Thanks. in taking queue. back questions. the it. I'll my hop got Thanks Okay, for

John Kousinioris

John. Thanks,

Operator

Thank you.

Credit question ahead. from Kuske at Suisse. Andrew Please go Next is

Andrew Kuske

and And into hydrology the easy Thanks. months, Good situation how to and and the the think then it's about fall? start, Maybe really levels in morning. Northwest in an right the you outlook over water summer now? one pack just BC the do

John Kousinioris

would of Yeah, I a Northwest, to pretty know, in normal we pack expecting Alberta look, I the say, actually where Andrew. what say, easy bit now, I thinking a a it in call be terms Hey, like little think are a good are. good we I below right is morning, think we're never if bit fine, normal would year I those questions. I year, below that But, are would

look way right. because almost as the West of tend wield Coast, to down power some on sort we given at it further Going of to flows trade integrated given the and transmission market, the California our an can and along south floor the

Oregon, just other sort very dry and would California at say, border this shockingly like of very, looking Todd, I dry the have I mean, we I of day, like from you California, the So -- were in South. it kind like

kind rains over and of normal in you things But Northwest like evolve here. know, a pretty are say we'll up the and pack spring the how what I'd okay, to So below see months. coming mean, the bit

Andrew Kuske

Appreciate really Okay. this that the hard. coal just five call or last, that. if program with easy and as one you market it XX we look back won't years gas or I the sheet preface the we But natural transition over balance had, improvement, Alberta. the

think five process versus You all position through more refocusing on and just that Two a you you XX organization. you're sort last lot pick years, TransAlta the the years? a as to And went as on timeframe? in about internally now you've do growth think an mode. on In stuff growing of years, Where accomplished? that

John Kousinioris

Yep.

I So, around it's really interesting, things that. say, three would we're doing

a I of to that to is actually a place think of given I moving towards and mean, also something terms move equation. skill where the a the company, you sort orientation, that there's very of our is, to managers, are right the And ago, our about, the as lock we occurring the or orientation, cultural even team would doing to a the orientation make on shift not the would right are execution. And, just real need of the within growth say, real is set the learning part new to also the half we decade that and team taking And on and snuff sourcing forward a it in we're strong work we But recognizing building the sure that's very, service terms we going place, down within results a that decade of, terms is what and it that's project The as involved we having a second within strong the forward. we're a our Andrew, right XX deliberate shift and organization, are the, on is of I be focused company, energy years can't that forward. what a that's know, very much have our today. strategies lot. where to kind coming one innovation just process contracting strong, it ago And costs been up on really in working that's side making orientation, technological in purpose, shift into sure the a organization. first part in We're just that growth within as underestimated. be the this contracting of strong of may orientation forward disruption, traditionally a getting critical critical what what of us looking customer five there, from capabilities culture of nature in

you'll it second compete really Andrew, and from on to the using focused just thing is within the needs the to much data the internally, we're internal effectively bringing we what capabilities we and And platform call the of do So of the very TransAlta it our gives the bear that The internally? of organization, for that on remember focusing along one on of evolved. which this do innovation Greenlight, the has fleet for where to are to we're kind to we the we we and can have figure trying hopefully, company. approach flavors LTSA? an as to of can really benefits bring maintenance, but using need out, we culture data singular to whole fleet? make What we sure you aspirations Can well organization be some kind appropriate decisions that make a as to maintenance

Andrew Kuske

helpful. appreciate Thank That's you the very color.

John Kousinioris

Sure. Thanks, Andrew.

Operator

your Please is And Thank from RBC. Choy Maurice next you. at question go ahead.

Maurice Choy

on My good you Day, that suitable question that, for drop the to be you at know R&W. Investor candidates Thank commented down and may is of morning. two-thirds first the plan around I dropdowns.

on to whether refresher two-thirds still or for you Horizon you down. suitable as suitable or projects, the are obviously you've pieces and how move or you those. drop forward a -- Rock dropped And geography a made Maybe perspective? with those see be to And reference isn't that as using tax won't White US However, number? is stated better what down Hill

John Kousinioris

you've and and we from, given it help has, when gets that think, dropdowns, growth really a we're that at more available within the sort and flow more Yeah, Maurice. requires going I it when how jump it organization in think a and two more terms about at the certainly that that the quite that a will a bit jurisdictions terms growth kind of think geographies, in in of be the more and would of that other look year them. that be it, active can, we allocating and right And today, think actually Look, resources and the it. now, the of Rock companies when certainly has that. really at that of it the terms assets and, do two Australia the it, our terms was convergence companies renewables, look perspective, here, but able think investments -- TransAlta R&W its good Horizon discussion it's for THC would to R&W greater to cash look is I I available, more it of last seen TransAlta, too. benefit I impactful heck just actually cash you in liquid going can looking -- of of the to US of forward, of Canada a US those morning, the maintain be the greater assets, least renewables growth forward. the think I given the for doesn't growth it actually impactful the THC, probably when Hill, it's and cash tax is the for a we grow extent, the thing say, be just is from the organic we and to to whereas, solid level cash lot sure. make, would flows, to cash, two depreciation, then now, which right I would Thank has certainly at tend White at between is we then at our Todd And in companies, we horizons, And

this other I a on So hopefully thinking It's we're Todd, more project that anything. go if it. gives sort to little particular of hardwired a point that know don’t you any by don't sense percentage think time. assessment, we've at to fluid a one I of basis, about the would bit in that a add versus of project want

Todd Stack

And you R&W, in also potentially got raised Australia just as question think one year Hills. And Sundance that one key it's of opportunities. hit earlier projects We morning. being year on in redeployed for points is, Rock call to this the allocation. announced now the the got the of last two of other When capital a of was -- Jon's remind now. project on those project go the White there, key you all and in the we Hill last down that's at And and basically the September, the I that projects rehabilitation good ready allocated halted to it's mentioned, one go, John we drivers X that and growth really just right Horizon again, the TransAlta. capital then about projects Kent had in

well, So across it goes -- company. the it lot it's has a busy

John Kousinioris

middle I probably the road the or think XXX% necessarily projects we expect in sphere in which sphere. I be would would a is Plain, like R&W that be more solid project say belonging to now conventionally project that the THC kind kind contracted Garden of in see, of that Alberta would would Todd than what of

Maurice Choy

US that other based on just a down pipeline No reasoning? development follow-up. quick dropped within Maybe your be will

John Kousinioris

has wouldn't I least sort in of of as in foreseeable Australian at and in digesting that. saying, capital the when terms for that also there's in pipeline flight, that TAC the of focus as black you Canadian as no, full would near-term, the as that with of focus has, more we more to But that of from spending thinking it expect at No, say it's kind be the a attacks Hills, line the wouldn't also And U.S., of has. there. a terms RNW but in it projects RNW future, what and look being and I'm arising prescriptive be helped I Kent being in

Maurice Choy

and really still your market. facilities, the you with terms Obviously, strategy back made position your Alberta power of thermal with past, also comment profit, my in market? that And and you share final -- your held market market in balancing into share market brings hydro and the second and comes the the picture, a have comfortable the invest there. you've moved thoughts market facility, so you in earlier you in capital of production, the on But Understood. that where trajectory to question, the you're it a your your and peak big you share, good

John Kousinioris

will characteristics kind the in We're the much the focused, evolution very demand province. it's of reflective we the and the And mindful have and and of fleet that Yes. really, way that operating. right it's supply of that occur now we're of also

we're value I just would very maximizing much share fleet. now from on the to kind Maurice, we So of market we're focused be on say, sure. less the that can focused

For free have really EBITDA, flow, the are us, the we it's fleet from are in we extracting jurisdiction. pricing cash we that more premium our about

So kinds get I future a working is, I our the big, it in we wind like, think for that's ground. We're we're which sure. mean, really we're more will of see project gas get way. for the a the province, is a get it our in but -- from off gas sort and fleet is And you running, more hydro the of it's has to of and -- products that need as peaker perspective, that's a is like tendencies it's market focus And the of fleet that's that what when going you When peaking. of what certainly is WaterCharger and way thinking that I the feeling Again, a also something out evolution AS. storage, markets fleet mean, the evolves, the that think the we of that thinking renewables significant forward. build

kind X a how -- gives overall metric then is pricing? is We're want you what hopefully spot share focused you of AS on. availability, -- bit compared our more the our within we're those we market to a Those province. of of So sense. -- pricing that to are have Todd, percent on What's the saying, terms market our would certainly generation add. share in the that's

Todd Stack

I was really, our a that going that to to just getting going generation that We built And so out. like, the more the see saw market see increase we're going is, is out. renewables. of that market I renewables in piece share focus source build to add share

John Kousinioris

Right.

Maurice Choy

Got very much. you it. Thank

John Kousinioris

Thanks, Maurice.

Operator

question at Capital Markets. from next your be Thank Baydoun Instructions] will you. Naji ahead. And iA [Operator go Please

Naji Baydoun

morning. Good

Just couple of growth. on questions a

to Hill topic gap up next. allocation, So Tempest Horizon and expect year M&A? with fill your for guess this coming capital the bank, the maybe you related I the you growth to of targets have in

John Kousinioris

we're to You pipeline what no, you think get Australia great. perspective, Southern do can trying I we're I sort at, at own that I something much it to we of to on focused that's And for know, very we're do. advancing we able Cross, be XXX. that, think is our mean, to on M&A if -- Tempest, that get an looking put with you to think gravy But if together example, look what if that's

XXX. we've got So

would forward. be I XXX least Tempest going Now, megawatts at mean,

we just could that some And about transmission in talk see I the on based the the we a see XX-megawatt take that we we Australia, of think be approach have. opportunities we're excluding also we pretty add. pipeline that would having, when discussions conservative more that in range. even that We the

if doesn't eye, have can way. I a in on it the put It appear her So we twinkle pipeline. that

around to Carolina now round to our solar I is is opportunities. But pipeline. of out variety And and example is of North busy a line team first So things our great a do. what execution of at a our is think think way and able M&A nice we're looking the I right

Naji Baydoun

the topic And maybe to managing it. Got Okay. just related conservatism of and expectations.

although all soon, renewable on revisit maybe And exceeding EBITDA, targets a kind returns, it's XX% at of bit secured the you on when but additions? it's the these year? to things return it's you're ahead XX% perhaps but So budget, because the on exceeding of you also XX% capacity those your budget, next of the plan together, but put do also EBITDA targets, your

John Kousinioris

great Yes. honesty, we this made target can't increasing time, all target it's question. has in mean, kind pipeline. of at the the let's been time. to decision at look this -- a My our no put I Look, way, I is adjust the it in all Naji, key focus, really point

for this as to focused different to see at important example much pipeline be in getting ways. doing getting more really as me equally today, we're if done, And and not really, really on it broadly XXX, it looking year, So that we're that increase. would three

given of facilities. One have. we that I've the that's you And that opportunities assessment of existing that it's there. scope infrastructure we have facilities competitive, interconnections of for have around there that is of those them by have pretty through the kind surprised around And been the we an some expansion the pleasantly the cost and kind of

acquisitions So that's And Two, to number that we forward. then the finally, tuck-in potential going portfolio growth there. at just And organic working that one. looking we're have increase have. of and on we opportunities a

we target work execute big like to We I'd of we terms the sort any sure want too. to in before do see of that So, us on we adjustment have. well make would that

Naji Baydoun

a it Got management bit it. of you does focused room, on be And are give of risk as to uncertainties just well. mindful any really

John Kousinioris

Okay, exactly.

Naji Baydoun

you. That's good. Thank

John Kousinioris

much. very you Thank

Operator

at no Thank time, proceed questions. closing further have you. we this comments. And Please with

Kerry O'Reilly Wilks

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

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

Operator

Once call we this ask your does good attending. for conference a for you and you. Ladies today. conclude indeed weekend. lines. Have time, your Thank disconnect gentlemen, this that thank again, please you At

TransAlta (TAC) 6 May 222022 Q1 Earnings call transcript