TAC - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning! My name is Joanna, and I will be your conference operator today. At this time I would like to welcome everyone to TransAlta Corporation’s Second Quarter 2022 Results Conference Call. 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]. you. Thank Ms. now may your begin you conference. Valentini,

Chiara Valentini

webcast Stack, Joanna. second quarter you, John President Officer; Good Officer; Chief me morning, TransAlta’s to Kousinioris, Todd phone we Wilks, being lines website. the slides Executive Legal, that Chief to welcome and posted call and EVP, Finance those on XXXX invite O’Reilly and External and are view and I Kerry Today’s Financial everyone, today Thank EVP conference With call. listening have our Affairs. Commercial, is and on the supporting

the a replay to will well today As later shortly and site transcript of posted call be be will available thereafter. the our

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

John Kousinioris

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

we the Southern Siksika, territories and where located begin had Head of the I solid the the towards progress our we’ve EBITDA, acknowledging by which TransAlta priorities to a on made the home Alberta, the of in in as of of million the flow Nations, and the the performance proud we $X.XX First commitment the People X generated Niitsitapi, Tsuut’ina, company I’m resulting quarter. flow Piikani, of $XXX our as free $XXX and year-to-date Nation, QX today our adjusted in Office of Metis X. second free of deliver the well advancing million share EBITDA, in $XXX Region of In region of employees. the cash leading Stoney-Nakoda are or basis $X.XX have part to cash Kainai, includes the Treaty of is reconciliation, million per the adjusted traditional share. $XXX a As per TransAlta’s we or million and want our

performed gas rates dynamic its Electricity and Alberta market the generate despite and heat Our portfolio fleet diversified prices, position. conditions. cash flow our to Overall ability natural as our a had we highly value Alberta compressed market hedge in demonstrated higher anticipated, strategically of under portfolio

pricing from at and contracted the from the quarter. limited opportunity our quarter and benefit higher Our that for the XXXX guidance. financial of results Alberta prices Wind fleet and environment in higher results performance, stronger market power led with excellent our our to Whereas Gas from as were in Alberta the the production. province realized benefiting Hydro it Segment Carolina had continue Energy North was and during Contributions midpoint results from our hedged segment towards the track our Solar assets exceptional we new highly supported to Marketing further our as Windrise the the

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

growth, Expansion Keith In with renewables with Project Facebook. as Transmission team Meta, formally Hill the our the side development with growth secured Australia XXX we’re Horizon with of the the Wind project announcement BHP. Mount another moving On megawatts of Western ahead known

which decarbonization. transformative We investments focused term generation novel including is a industrial Deep the in also $XX Deep to invest new Decarbonization with critical making long commitment companies Partners and million made to Decarbonization, Impact storage, Energy technologies, Fund, on in

to the diversification approach We’re aiming next solutions our a of electricity generation to use and this for take define targeted platform company. to

prospective progress grown in a sites is in of of XXX so renewable our our by pipeline development United adding several pipeline megawatts opportunities States. year. across towards more than gigawatt And This our goal in XXXX, great Canada over development wind far we’ve and the this

we Power, going their the RFP the announced customers to We’re investment XXXX remaining in this on remain XXXX. decisions XX and year XXX to our XXX renewables from process megawatts XXXX, our the facility, targeting going extension our we expect a the holders to on deliver the reach to year, in with one growth to this megawatts wind New facilities and hear a on along for Hills bond Brunswick later we of target are waiver another quarter. and commenced I track Kent annual rehabilitation there. of with confident growth later deliver out receipt on commitment with secured capacity and clean our Switching electricity two remaining activities remainder contract efforts to at to ability from our with customers industrial customer plan. gigawatt had three of ISO extensions of all We Sarnia, X recontracting have to at the now relation

to on our North and addition EBITDA from advancing contribution continue Windrise renewables make Carolina last Solar also of We the year. progress assets with

contribution encapsulates we Our of the in finally, our the a new end customers. And creating EBITDA with our debuted Future This Energizing XXXX. future carbon-neutral storage TransAlta contribution the as visual June XX% leader our assets while focus in campaign. from our brand company’s and the XX% identity in new quarter, along for today, renewables step target of another identity level towards of a reached by and reinforcing the

decarbonize as We the to continue to continues unfold. to opportunities see considerable TransAlta for race

approximately know, by EBITDA of $XXX new the achieving of ongoing. by construction billion capacity X you target projects deploying renewables of $X from we cumulative have growth by approximately of XXXX billion As projects growth currently annual with XXXX. gigawatts of capital We $X.X to the deliver planned million

we’ve a that about are and and of execution half into the made. We plan year a the the proud we’re progress of

year gigawatts Combined, these approximately our projects of providing the contribute incremental representing of will growth megawatts of five XXX target secured our Australia, XXXX. across annual and $XXX once million U.S. have EBITDA operational, fully million. target by Canada, XX% $XXX projects in EBITDA, We X of XX%

front, turbine deliveries executed Garden Goldfield executed been site. in Northern and construction EPC Transmission Hill, Keith and the major Expansion both Horizon at Plain, agreement supply project. have and the at battery racking transit at solar delivered to equipment been the agreement White been All is Mount commenced July the in and for the and On Rock have has EPC panels

current three capture market. growth of we and that in on opportunity all We deliver to for the remains plenty of are in to renewables U.S. program track strong construction our demand geographies. The across our see

portfolios, looking of opportunities include well pipeline prospecting grow early actively acquisitions additional of XXXX. a and also sites, our at number sites individual new We’re of development which the the small continue development of to development as balance to we’ll through there. as stage add These

grow We’re Canada, in primarily also Alberta. here to working in

have we seeing new see of on pricing to the While inflationary pressures. to corporate respond started capital strong for and projects, pressures for we’re demand continues PPA inflationary be PPA’s

We for to appropriate in ability have our returns confidence deliver risk our adjusted shareholders.

construction projects actively and the seeking advance opportunities our into team Our contractor our to phase. sites is

a megawatt next final growth moving customers AESO We Tempest with multiple our interconnection Wind targeting here be and to Canada, through currently in project see expect for It’s this this project strong process the opportunity. year. we investment XXX decision later interest our

Australia, support growing in opportunities our of mining in seeing remote Western also We’re customers.

the to I’ll we for take there decision BHP our investment opportunities results end with year. through financial to of several advancing additional and before to are final turn it projects We expect us quarter. over reach the on the now Todd

Todd Stack

lower The excess gained DJ XXXX. Thank prices intermittent per per a by megawatt merchant an approximately factors. in $X revenue performed electricity. from extremely to realized in you, pricing John, but pool approximately DJ XXXX, transition performed as of and pricing revenue the availability This roughly environment, benefit Ancillary per per of impacting on supply pricing, Alberta to gas natural well resulted high good natural power In $X multiple dispatched than off quarter a in extreme wind strong second per the megawatt the the hour. unit gas our in and segment of ‘XX of quarter of from by electricity. in were lead in energy segment the market. QX, prices This as largely fleet $XXX Hydro driven result competition for average year. settling megawatt was portfolio outages for QX peak order with to also gas generated result production, to impacted In strong merchant average driven weather market, the by in saw In XXXX morning XXXX megawatt were a the wind demand, an and strong gigawatt higher realized where our and and several power outstanding energy. base hours price also energy-only energy lower In pricing in fleet outcome last compared wind load hydro, wind in at prices X,XXX realized results was ancillary benefited fleet are from strong and Strong compared to the hour, supply everyone. from peaking facilities is as as The as negatively services quarter The and high and $XX hour. gas of contrasts this $XXX services well. $XXX increasing driving Alberta prices. hydro of per throughout prices well hour gross The sales.

of the As tighter the optimization prices X, to higher as and lower Keephills higher due remaining expected, well retirement production units Sundance to due as gas was the dispatch Unit X spark on spreads. the quarter in Unit gas and

was a merchant limited production spot upside our which significant portion performance. addition, of below In prices, hedged

excess year, and megawatt headge in for hedge we QX of level see carrying into the level. per of QX balance comparison on expectations we’re to prices the QX Looking forward of our balance the at in $XXX hour. a Based XXXX, lower

hour, of gigawatt our XXXX year, of $X.XX. the hedged $XX gas gas million have $XX balance an of GJ’s the we of Alberta natural price megawatt have generation average hedged at We per approximately hours approximately and at for

the wind performance quarter. contributions new led a the performance by As which increase in increase $XX from XX% in The John second mentioned, factors: incremental and the of million was Carolina benefited Windrise in adjusted to by million our fleet, QX North solar facilities. in was delivered $XX multiple from solar driven this First, XXXX and from EBITDA, quarter QX

production Second, we had all regions. and resource wind across strong

compared finally, had offset higher had credit in in Kent we Alberta; higher realized in partially solar merging we as increase wind was at the Third, by sales and the extended outage pricing and segment Hills. This quarter to XXXX. environmental the

results term adjusted broadly million generate performance our in between to $XX with I’m trends segment or of strength guidance and to construction. we million. balances of accounts with pricing of collateral were energy company. in longer resulted to gross future our going cash I was team to second balances free higher in both Free to and energy EBITDA. well with held. delivered on In the and We expectations and early $XXX million EBITDA marketing positions million results. quarter. QX, year-to-date billion $XXX range and and remain and and $X.XX our we expectations $XXX our collateral and volatility million liquidity We year-to-date, but megawatts QX sheet consistent to now track another for to the negative of range. us share our continuing higher quarter closed cash TransAlta’s of and cash expect margin track XXXX quarter line remain and in the approximately with environment, XXXX. Despite pipeline, Recent flow $XXX XXXX in for $XXX the free flow elevated both for collateral energy Our growth year. our cash turn we in marketing in balance EBITDA are impacts and under $XXX within continue with market year higher cash with EBITDA expectations $XXX and line and delivered our solid the has guidance including reverse receivable cash extremely of projects million million per line strong now resulted our highlight payable for in this expect quarter financial the begin our million Overall, the in $XXX full fund volatility million capital very in movement provided working to $X.X in XXX accounts strong. also these This This flow price liquidity. of

John, back things turning to turn TransAlta to I’ll Renewables. Before

ongoing fully contracted Our of operating results investments. consolidated have TransAlta are in results. the solar the wind Kent suspension are also as of contracted growth operations as the resilience the and fleet RNWs the our and demonstrated majority Despite the TransAlta’s assets of diversified gas well held and of Hills, our XXXX Renewables within for quarter at assets value

$XXX an the was facilities, the and XXXX. result from in period EBITDA, our Windrise second environmental of million delivered and the same resource production increase sale adjusted the $XX credits. million Solar During TransAlta to quarter, a Renewables increase The of an compared of in of during increase North wind strong quarter Carolina incremental

rehabilitation during As quarter executed to underway. XX New to for John we Construction the the a for site extension PPAs Kent allowing plan the site. proceed year Hills Power with facilities, mentioned, Brunswick with the wind the of us is

pouring soon and three disassembly new nine foundations on-site A on We activities, ready the is disassembled to on and we’ll start plant site, working removed. cranes the batch have fully two concrete with be foundations. turbines now

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

million million And the of had at end facility, In quarter. to with turn John. our addition the $XXX to over $XXX the that, call we I’ll back committed cash of credit

John Kousinioris

Todd. Thanks

opportunity. As for already on look at decisions the of clean customers Garden I focused on and is electricity to across choice are investment our In to growth customers track equivalent on progressing and progressing focused the reclamation by goals: development at U.S. XXX sustainable projects goal with Expansion at Horizon clean employees, our decarbonization. ranges; all electricity far and continue the our the to awareness and female Achieving United at Northern work of wind be think flow megawatts Plain include on solar of addition on re-contracting Mount Transmission least investment rehabilitation EBITDA COD XXXX we’re to what and for TransAlta project additional with a focus of solutions strategic at Kent cultural to States XXX High indigenous in an of XXXX. Wind I value so employees renewables Expanding Reaching securing supplier XXXX, we’re Wind, and our QX; advancing Hills this projects; storage; another and in the our I’d ESG megawatts Vale and the our XXX which on White cash delivering that final guidance Rock objectives, makes by our free and and XX% Western and Australia. like Canada, key to provision close and Keith following on priorities the Sarnia Hill; in our and great year. highlighting of the achieving Goldfields advancing attractive the projects achieving Centralia, construction progressing training ISO Australia, within announced to pipeline megawatts a

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

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

emissions reductions. reductions more tangible a with this with an a setting COX greenhouse A-rating. and XX% a from target year. gas leadership levels this leader XXXX We’ve We’ve by on XXXX ambitious by MSCI a for committed based targets we’re science adopted are emissions to emissions been clean focus reductions Second, of electricity recognize

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

growth renewable with far of pipeline so focused talented extensive we over and development a XXX on megawatts by value. an its set opportunities, year, team diversified Third, have expanding realizing development our this

and deliver Fourth, execution financial XXXX. a pipeline company track, we’ve our it on we’re on sound in is growth to has our on continuing foundation. and XXXX Our delivered in

growth our sheet is strong, liquidity ample Our have plan. we and to balance fund

people. our Finally,

our reliable leader the every low Thank have in and our targets our that and and quarter. turn the are day and all as people of I over a customers. work and that call I’ll TransAlta we generation focus point back and meeting needs We employees for this electricity you, Chiara. of exciting on evolution. an exceeding focused to results to its greatest clean in each want on ourselves thank contractors Our the our at asset cost, set they for meeting done deliver is the

Chiara Valentini

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

Operator

Instructions]. [Operator you. Thank

First CIBC Jarvi go Markets. from question ahead. comes Mark at Please Capital

Mark Jarvi

Thanks. everyone. Good morning,

us in market give are Ancillary pricing. maybe in happening more of terms in the bit a of First, that color softer the dynamics terms

You referenced a sort bit reverse. permanent, more of competition. Is could that that

there? maybe Just a bit details more

John Kousinioris

Yeah. Good morning, Mark.

given much So expected it in prices I of we way on think were the it Ancillary actually gas the – the transpired know to, pretty you year. services, during where course the

in of given basically were. at seeing monetize best dynamics spreads decision, or basically prices market,” where is the bid are do the basically “do avenue we’re AES what the where the the number making are given run effectively them what markets, and the for gas into that are to is looking a I generators So I given spark

what gas we and So basically variable participation that’s high, was power from saw a generating we so of gas fleet strong in the is high the as though know AES had cost, of cost you consequence prices, we super even what the prices, the saw. market more

Our we what as say. terms moderate gas more expectation still time And up normalized good is we of it volumes prices competition, consequence. as that I in would soon I over would a had having as call really ended would the

clearing think XX%, I I XX% own my at of Mark. think prices. of than was to saw It XX% we kind kind what of XX% price, rather the in the mind, was to closer in normal, range, least spot

what bit you of sense of we a saw. So hopefully that gives a

Mark Jarvi

for favorable your So, it expanded, come fleet? be you to back say, spreads then it’ll would if more would spark and you

John Kousinioris

would’ve as exactly said that. as wish simply That’s I right, it I and

Mark Jarvi

understood! No,

John Kousinioris

right. exactly That’s

Mark Jarvi

the on framework in and you’re it just of you how what terms broadly? seeing think impacts consultation, your Standard, sort Clean also in Electricity Okay. the And of but fleet, views the then, supply Alberta your updated

John Kousinioris

bring and not mean, are not province. it’s customers what we’re I that from amount the requirements locked and – that renewables we of loaded are some both of procuring we’re the reverse Yeah, process. that a that the effectively think into companies I’m have as sides terms supply to I’m of we’re the in that border province, place already coming a the being the I’ll to the seeing big in much sure clean based interesting. timelines that’s know to forward gas the do of on largely renewables States. been of market it We’ve We is maybe is we additions commenting were those in pretty in seeing have, I move U.S. given growth some would the ESG that that some particularly incremental regulatory driven just things first. in seeing the United initiatives taking moving considerable the on renewables basically standard decisions made. of say, seeing And or terms been of frankly the are forward. prior policy regulation sure answer being impact on you electricity

with is government team they closely that. evolve the as working Our

that is think and is tier that analysis. And of discussion how government XXXX trying and well evolves. across then also period, the is post pathway Alberta way as so country, we’ll an happening a you lot way, in know reliability the so in decarbonization review I kind that of in see that to the to a make appropriate sure but met, maintains the

weekend I ongoing. on will round that we that’s tier. the be In at just is of the province actually on provided providing say input fact on we also would our the looking - comments first

signals declining about performance We’re a standard. the seeing from government

you’ve which it we call I it’s that And to independent from as has as forward, terms that look a electricity but is buffeting is some to in of EBITA we’re if seen, strategy of of really land the a our you some our So go place effectively much company. growth going. trying perspective, trying can contracted, exposure mean we guide in greater underpinned a think I emissions the to more that, at of carbon green really on a it, I price carbon that policy as clean when directionally the we’re see where

Mark Jarvi

John. a follow-up that, Just on quick

Just in tier in province think terms co-generation of of also units that’ll review, just the the electricity but the equivalency impact how you clean standard, Alberta?

John Kousinioris

knew Mark, – the that to answer wish That’s I question. I

deal I the think I all least I say meet You look government targets they to is in, to of the company’s my the of imagine, know can that. without government, the bring sector we’ll in our perspective, set think kind province, side way the kind some do least that for it’s see with hard equation so would is how looking from federal of the or in at perspective, co-generation how the at to,

to the to I and think of I I to clarity, I without think we’re get at with that to get including they are they’re struggling how it’s to do approach. some having them, discussions them with purporting candidly, wish least more I... where but in element in had but think hard I

Mark Jarvi

No, time John. today, understood. Thanks your for

John Kousinioris

much. Yeah, thanks so

Operator

Thank you.

comes from ahead. Mould Next Securities. go question John TD Please at

John Mould

it, what to clients and of Good Lafarge’s hours secure the output merchant with one your Alberta? I this particularly efforts XXX power earlier new maybe just among morning were starting to sell consider of a much in additionality, Alberta, contracts going contracting see existing you would How assets from and that you know I plants. year in versus Thanks. concept corporate of this year appetite to You it’s announced price the think environment you know answer’s gigawatt of all XXX, wind term wind of for current Maybe longer know you ones? your contracting you do in everybody.

John Kousinioris

one in we premium interesting team challenge growth I whether but a pricing as element how it inflationary or having discussion hydro. of not understand our strip more additionality, ESG energy product, to first Yeah, I a know do for of an sold John. be see both is with in that’s just so commercial consumer not all, is and might maybe think around or unusual have we more nature to a existing in I would There and harder in with least other us some do there, strong the I a discussions. Alberta, – a of you build. bit of you hydro gets just through morning, do doesn’t given so know sector and and have good them, to at wind province, we could doing make It’s additionality wind sense more the say the When would product but interest, for they existing kind for and and a something period of little there people even in off it’s and a The than actually to at from generation having a than case, or be think the generation, my of walk the think requirements a C&I that it’s of meet favorable I – on our team hydro. goods that’s for the new within sense probably them bit that’s counterparties, less result environment whether of particularly focus into and there, them on look it our contract sort it’s you how the begin

would nuanced, it’s it’s I John. So say there but definitely

John Mould

non-asset exist? sign the I time sorts five you a the bit I’m customer, of period still opportunities Okay, you XX for of sort appetite contract those know And horizon? just guess of sure of to length, specific are year place, negotiations, is a thanks other over in but for to terms seeing Does all that that know you that. longer in that

John Kousinioris

PPA talking more fleet. would so not I merchant under builds bid need a the new you’re you’re on existing rather, about say, talking about to a pennant that

over bit place. I the a think it is all

and I’m think, at just looking Todd here. I

I side see. think C&I three is sort of we on the four would conventionally years to what

would that, I would So we generation, bit than a a of off That our stretch see strips goal if from a XX a terms an outlier. would of be bit do say to is going John. could temporal perspective of better forward. be probably in

John Mould

Okay.

any Okay, on just can refinancing? just how structure thanks that that, you year. looking on maturity you’re U.S. come for that. maybe bit later at the note optimize that a capital to any And your you’re approaching along Todd, this insights whether provide with opportunities little

Todd Stack

absolutely. Yeah,

refinancing. it think issuance bond are pre-hedged a effectively we we’ve and portion we’ve disclosed looking that that of a we I over roll good to similar with communicated bond have that

movement the us market increasing been pretty reports in coming underlying quarter disrupted the concern, lot doesn’t of the the a the of interest underlying with and has but and rates. rates inflation give really much all the So over out bond last

bank So, several it’s past confident refinance we’re over just windows bridge credit a have then Canadian we that the the either But lot give to loans, or balance, months have access cash are importantly, markets us confidence bit but to of market to different bond. for well sources and access and as a bond spotty still a been facilities, open our to here, that that allow of of the as and will in up more to access well. capital, market we sitting capacity on of significant U.S. lots term

letting mature the it is refinance that and settle. for of effectively going markets when different lot confident just opportunities really that a I’m a But of then debt. it refinancing forward, that refinancing to So be or going debt for to but options be it there’ll rollover

John Mould

Okay, queue. I’ll detail. back the jump in thanks for that

Operator

you. Thank

at RBC go Maurice Markets. Choy ahead. Next question Capital from Please comes

Maurice Choy

the Thank to back come maybe guidance. take I and it want more you, AES just and to the good pricing to broadly about discussion morning.

to kept items are guidance, the pricing the which previously but and to, are the of tracking mid-point the to mentioned increased guidance you the revised or unchanged, brings were your you bottom as you overall the range You’ve marketing therefore such end speak softer. being to guidance you some that can midpoint. you marketing there offsetting AES that you energy your that obviously tracking Was it

Todd Stack

hand Let and back me start it then with to I’ll John. that

John Kousinioris

Good morning, Maurice.

Todd Stack

the key the in prices energy of uncertainty bit side, morning! after the cost the little saw higher million bumped Alberta. million how balance so which marketing in say it year, on you for $XX in and energy the a that margin, I a the is performance, John, I marketing what about side. increase relatively gas fleet maps $XX gross it of would a the here one I think of Good know just on we the modest EBITDA, drivers will impact about gas in QX, Just mean amount we by about

also of our We the the hedged of are well time for balance the hedges the support to is and XX% are year a procured. those same production gas hedged. About at electricity

and strong, in So pretty I summer much July see of July, power the would so pretty say here. out came it's prices we'll good not rest the different, that runs were how really

John Kousinioris

things perspective some might one we you it and say a bit are and market and we say be well pretty they’ve we you in the Yeah, we We look August some little our a back fleet as full is say our unfolding would continually I forecasting a comes know it the and mean look we to I more more half I it's seeing we tailwind that view in long that of how as I been we and right Maurice. update gas more are hedges but forward, tried go was take given buy this whole know focuses about would and would is we but at where little it going open so we're bit and company pretty – be know say, and seeing year. know really quarter-by-quarter, we're year help you for to of guidance stronger land, to the look with what as on make we're we’ll look I’d you going going where from to where then we'll our keeping some to on the are certainly a where like look, large. the good things year that, kind at point, pricing in it the by think would there did see unfold, reevaluate. back and from comfortable to favorable, I at that of the year, also holistically now the but we thought in quarter Todd's that

Maurice Choy

And be in you moving I to some hedging you strategy buying just follow-up back than liquidity in or little QX the open a the and longer then are is a forward? more that you mentioned of more more term hedges. that, were guess bit a open result QX guess still QX. aside, maybe I to of being same open current would these you

John Kousinioris

looking know our that hedging within you I debating in XXXX, they XXXX, don't hedges the there know are a Yeah, into least predict Ukraine We the team was we're place couldn't where it's where in great time a that war I spend when for anybody company think lot go perspective. we a – don't and approach shifting would and I that of at putting be gas at mean you were. prices think I in back a from question. a would

So we you the like a where was it view of market. based the our decision seemed in time terms know and were of it fundamental on rational in

is what think low now, more know opposed for focus to in in it's which of really kind we that what XX, range think forward. off mid-X’s with prices rating of I Cal is the X’s think see X’s I Looking the going the I right as somewhere you now, $XX gas the significantly team to in at

the is team looking that. So at

We another make team layering looking with and good we’re at will the in it as that candidly, are also sure so where view on our going. aligned be our year gas what we We forward hedges is is contracted will fundamental XXXX. think looking go to position be

I we the course the terms in think undergo staying that So kind company. of in the of process

Maurice Choy

Got it. between ongoing relationship about thoughts RNW. TA your progress in review? recent the final Any question, and you And know my

John Kousinioris

to we I clarify would is work, There between approaches say to companies. continuing the the two convergence. know you just Yeah, think are I

play know better companies. how are to going Have year, a it’s I think upon we from balance us how of out in you’ve in where heard so idea before a we between but more of folks the and terms the us the that with to two strategies you talk two landed have go at be that haven’t, we some see as able to about add through that to on evolve. the perfection our of my goal – clarity it’s incumbent growth I this evolving think two pipeline will the companies of provide we perspective clarity particularly sort the and point, terms as

Maurice Choy

very you much. Thank

John Kousinioris

Thank you.

Operator

Thank you.

from question ahead. of Dariusz Next Please Bank comes at America. Lozny go

Dariusz Lozny

for morning! Hey Good Thanks guys! questions. taking my

John Kousinioris

Good Dariusz. morning,

Dariusz Lozny

in the TPA them of your you But perhaps sort are? to or it’s can number and at or corporate fairly curious, a discuss if whether stages maybe discussions more to like to to just this you any some Alberta perhaps on in little thermal it’s you maybe being at as those Alluding I’m wanted What early opportunities addition point. one, those see, what bit Just touch today? the to presentation materials specifically opportunities here. level present speak opportunities, to remote looks of need see those, redevelopment otherwise advance held of market it

John Kousinioris

and that. would great. in have at the that no, us Thank Thermal. you've No, you seen both Yeah, also materials, seen you the reference Centralia for and of at Alberta

accurately think or are geographies in assets around the those particular the is the in and that they infrastructure even super connected those I grid and have know you skilled areas. of we workforce to geographies more generally how those terms those valuable

of the away solar, in both been it's two look and So potential storage, of and we're those on hydrogen we've of solar case of for we looking the those at we’re at at looking sites, and particular border sides thinking for actively further when sites, potentially. both jurisdictions thinking the

certainly the referred there two XXX wasn't those redevelopment of So opportunities longer you tell referring that opportunities. the megawatts sites. and to the been can when the But I actively to term we've I can have and years, do improve right of transmission from those the in that to helps there. of last economics years for see all helps Centralia we a given which which couple the what that facilities, need just in Alberta perspective – we redevelopment those those I makes much term looking we interconnectedness to team location, added, that at near for in are are has it's call and

Todd Stack

talked needing are great other that. and whether or mentioned, sources of the Alberta I about ramping – of so these supplied we think things the up industrial for and capability, – is these sites through batteries firming that's John resources, see to fast some expand we as one

John Kousinioris

perspective of some in those reasons of areas need work And existing the one may we solar also is the it to would hamper why that reclamation mind. very is do the on

we to so forward both trying locations we're footprint that have or that to go million very element we $XX so as the spending those reclaim, other year have of that large remember there. you You a know in

Dariusz Lozny

off-taker Thank ongoing. I Great! appreciate this that that. if and Ontario I Sarnia here. detail, for on you I with know is more the One can, still are conversations touching just the

put with like Just under was been think was I respect a there project consideration hold last looked week. as earlier of that large it's transmission that to, on

affect how Sarnia Just there. and curious that with the re-contracting or may outlook for your province may not

John Kousinioris

don't impact think Yeah, we have candidly. it'll any

nuclear I Southwestern that are the are looking think of Ontario, going what thinking even progress are they was on predicated seeing frankly, making as is what they forward at refurbishment ISO that forward. the on really doing the we in Sarnia they Windsor with program go

they or secure the at two looking think there are a getting say between to getting all decade of So accurately would I to a that correlation more and of bridge shore we've that supply the the the broader balance I done. of of effectively discussions think as had – kind they the of at up into with electricity are supply work isn't looking that least them

RFP So the impact in. I we're don't involved on certainly has any it that think

Todd Stack

the there this And – the of process think John, Ontario government be the month. end towards that that we're the the it'll expecting ISO is I or announces

John Kousinioris

is is I I latest we're But we're think think what it thinking at later ISO expecting yeah. think early of, the this September. and or I month the its August,

Dariusz Lozny

for I'll Great! Thank there. leave color. that it you

John Kousinioris

Thanks.

Operator

you. Thank

from comes question go Please ahead. Ben BMO. Pham at Next

Ben Pham

Hi! ask driving the creeping that's seems I prices pricing? you'd know well? I Thanks. Alberta power wanted reasonable expected been been think with What's backward on it's too. do morning! looking. think than Good $XX secondly, you really as why better year-to-date. to I the mean And $XX, the up then

John Kousinioris

had the in Ben! the and morning, – compression at So frankly look, – heat You way, and by know of we've terms rate in pretty year-to-date this pricing when you significantly. year look good

year, of Todd at like year. frankly, of at last it's I during and the many year think times Kiara, looking when approaching sub XX been it XX the this course was I think times and

$XX to you variable other transmission costs, nudging $X fuel. XX, for for Add So number, if a heat just increasing look have at, at you carbon pricing, rate gas facility. and of $XX, the pick a towards that you're costs up

even like place For sometimes where anyway, variable nudging $XX, the a gas more, a converted you're up in fleet from you're perspective. just into cost

of that's power So one prices. reasons seen we've I think the

I go we've reason think seen where frankly principle power up the is. it prices

so we've that think we're seen also load pretty sort load a I the of to of level dramatic in pre-pandemic. sort back recovery we province, had of

you know think solid. I So demand has been

certainly supply we'd November time of we're an that when costs in outages variable impact that's I the the we're year. a and tighter balance in I that expecting up certain I period the to by sense in expect there's lift. think gas pricing driven seeing led price think seeing costs, more to variable the extent, cushions pricing what really are and the that probably in really we And that’s the of think year, this of the October province

Looking at still carbon expensive $XX it terms know what higher Gas XXXX. of in Cal although was expecting you to we by the certainly $XX, price year. prices, in you in up is is to XXXX, are it's again XX, next when carbon compared than look lower at comparatively it go

would well you where terms I costs in put are. of pricing variable of think north again, know $XX that you

that the the are of costs the the people So over that I think of and margin in companies reflective of calibrating to through. trading are variable it's kind market need kind just get

that's Ben, think So the I hopefully little way of but that a it. bit seeing gives we're color you

Ben Pham

risk that open, hedge power fuel to just costs can and leave sync? or especially the on much have you as your to we're somewhat do you on probably but where how it I unprecedented territory hedge power are, hedging prices an that, spoke in of too out know better the is you And maybe as – earlier. side of to gas Isn't there and

John Kousinioris

Like what of your Yeah, was the had year. of where in view terms they does year, is. fundamentals, they market our it pretty what reflective make the curve through And light the what and we optimization we events power at costs run we our really will that whether you And prices our candidly. were think against that settle. prices of we where been tail flow they an that then then do fundamentals, variable seeds you or know at dynamics, at view open a you bit going price in fundamental that that that think terms tell supply the have, I We as to where cash in probabilistically it's a When occurred as weather didn't XXXX, and the XXXX it company forward point, in of a and protect you the in we of is I market into of system demand go look to of look look would've expect effectively that decision the and not compare it of interesting. to as in sense is, the aberration. to team terms all real remember, look at makes bunch shocks to in can not. quite hedge, as was that were were forward basically XXXX, I and in going a

where in was pricing that I had a were think that triple up pricing bit kind things in were, you gas I we think. compression the context of they and we going it double, to I saw we know reasonable resulted getting team prices the that from be gas the thought mean, of and the of ended.

province orientation thing just of would one peaking you base more in become gas the not goes time as it's to see. units prices generally moderated than little you and would I to hedge peaking you may to rather It think think get units, more the amount that the view load become I – and is the units would then that our I permit our in by need bit that a effectively be say kind I be would in be in orientation. think would the

for we as we're a think don't trend yet Ben, think I that's quite forward, I picks think So sure, up. which look but direction question your there I certainly

Ben Pham

to like your than it like putting you're you. rather that pricing, giving then on guidance upside that's that really it on but direction of taking like sounds a of up focused delivering really time, some guidance, sounds you're for – more maybe point with It big at sounds call some a priority

John Kousinioris

some fleet one up the do bit year mentioned the reasons work take a the see of know So we'll we of really are guidance. That's guidance upside that we thermal try year, the and where don't terms us the in hedges we us. give that the market I at to to forward. lightly. company is we does, guidance for midpoint priority dynamics back hard mean, the we the working to as to as pre-estimate go open earlier, that, that's a you meeting I optimization our It little that do and bought they more think perform of given our of over a by we is the genuine the all other of beat and course the team

Ben Pham

you. understood. Okay, Thank

Todd Stack

The is and lot only through add that see do we thing facilities. upside I would hydro the a merchant the of wind that

John Kousinioris

Sure, yeah.

John Kousinioris

side, gas hydro large a planned see but like have had the It upside. the we business originally the wasn't open position. do It’s wind as we that as much and on certainly

John Kousinioris

wind the this extraordinary pricing mean I quarter. Yeah, was

Operator

you. Thank

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

Andrew Kuske

in last purposeful out your Thanks. very now on network maybe bit how got between is and to I just have interplay geographies. very development action of from that is right Good you've like a time. a that the Is seems just shaken a effect sort looking your an more benefit little concentrated It the or things perspective pipeline specific a that of morning! some portfolio, guess parts while? over in

John Kousinioris

or focused little Alberta for three back Good would frankly we the two thank more that. morning would I if roll years in opportunistic. say bit think you were you Andrew company, of Yeah. kind and I than a

correct. actually observation, – I is think know observation your think I your I not

that of renewables go being the in in expanding kinds in We are States the our we're it's very on, focused terms mean really Alberta pipeline. market areas, terms is the that's that have frankly I competitive, jurisdictions PJM Canada, SBP, of United a us that's And in in of Northwest as and in with goes our us. certainly resources, team perspective. I adding power of customers. States by, got perspective that's growth because clean the basically the in directed demand, where our that's only, a see team be MISO, the be Pacific seeing say I would the sets and focus skill for a you focus pipeline, that would terms as where are dynamic that's part year the more a the with from from would along you'll to areas on it U.S. real In where we think United the know we've we're the for solutions customer

is it So and geographies those sets of in much directed among very geographies. sub those

example, got control, just we've optimization a maintenance, you there cluster to point, from Oklahoma, So facilities. running given terms in of for the – know your

benefits clustered to For operationally having assets. sure are there

Andrew Kuske

for visible build how be quickly, maybe presence from on you up fairly the a managed I big Oklahoma Then TransAlta? opportunity to a appreciate Oklahoma there's fairly you've assets do that cluster but the Obviously as behind quickly. just in could lot focusing standpoint believe of that. scenes,

John Kousinioris

bigger team I all in terms see, our Oklahoma has dealing and and getting currently so is than Oklahoma of of that it people Yeah, say do the permitting. comfort would in think in I

in see continue to We Oklahoma. demand

some also concentrated as have well. additions appropriate our a to kind we of an bit So do, mindful We there? areas, diversification more within see of we're do but geographic

know of you if I'm in would don't Oklahoma our see So the jurisdiction see U.S. you that saying. become what I dominant wind kind

important for I within pop forward. us, I the be think other you'll articulated but think going an up areas have that see jurisdiction it'll states

Todd Stack

John, don't individual think I'll just states. about maybe I say it as

market in the from those region, good at similarly and about clients good structure, more it’s SBP region the north and regions. think is corporate states that well I just PJM demand region, so as areas, good the

John Kousinioris

Sure.

Andrew Kuske

If that. developers interest and could appreciate tone just rising from talked any just sneak has rates and the one. there one been I change just broadly? little volatility other pressures in given to, I some that Really, more in Okay, you of market

John Kousinioris

we I that execute on may anecdotally I to would would projects say complete have inflationary some pressures. actually there say, struggling are they have initiated. developers I heard for or the of that are sure think some

us. we’re You when I it mean done. we know that’s for contract getting on focused something, not laser

on PPA the seen increasing both adjust of seeing. to have some We actually prices sides costs the border, reflect incremental that of we’re

of ton of perspective, we but Andrew supply kind a So, eased at a and concerns a least little chain turbulence looking from wouldn’t say own our just of had a right company, had bit. bit some little I even that the of timing turbulence, at from a now, perspective

higher, times than delivery cost dramatically, more three were the broadly things speaking, before. would within like pretty increased that is I thing We’re we maybe one getting to. costs The timelines them probably expect say they the of are shipping has

Todd Stack

side And price that locked make the a in our that costs really sign we’ve to of with supports on the PPA we we customer, strategy. other to a and the that a place. When to facility majority want put commit actually sure in

of with a sort of that’s we forward So foundation key customer. when move a

John Kousinioris

Like the perspective, loaded know locked from a are costs of you and yeah. TA typically XX%

Andrew Kuske

appreciate I Thank the time. you.

John Kousinioris

Sure. Andrew. Thanks

Operator

Naji Baydoun question Markets. Please go at Capital next ahead. The comes from iA you. Thank

Naji Baydoun

Hi! Good morning.

corporate start still or Alberta but where that is a market the that figures. you your to CapEx just it the market not revised Is pricing is your return target for overall Tempest, but expectations in I wanted Just within see Alberta, EBITDA ranges, evolving? PPA function of the

John Kousinioris

we number done. so clean you that Good look Yeah. get Naji. – morning the you electricity to think growth capital we plan, know talk I about plan when at No, are our

PPA We you prices been, But on would’ve year are increase. we and in PPA really are or at of well the costs that so the XX% we’re when that in also your seeing are increased, some based out rolled north seeing has looking you number, in question of is, it have germane know the mean – capital a ago think what’s I know increases increase. Alberta. because that’s I we prices we cost prices seeing the certainly cost

think I in that gone doing it. customers have up the understand our costs

to and is able EBITDA So still cost that our to might returns it? be are that to. it that project the answer that we in that also to or being targeting miss were realize, with escalating, the view get, revised question the need associated get to able would did upwards though your that even you we’re I the place you you be basically land Does

Naji Baydoun

And the inflection extensions, on for the and just good on do there [ph] No, that’s U.S. tax this an you. incentive given more even that do sort be accelerate helpful. acquisitions? or That’s as to in good, you side, maybe the it we’ve news wind point see few months, maybe look or U.S. growth, fold the you solar to try thank the tariffs seen past to of

John Kousinioris

acquisitions if see that to look continually We make sense there’s for us.

the be maybe be, one of the of States. what but that a with of terms have don’t see we going generation, would as that that skillset point a be attractive some on it United kinds would your all pipelines, maybe it internally, we The forward. To in a they know but developed there team, in you us regulatory have would a environment, quite see on. more go we acquisitions do positive or that M&A development processes happening interested We team small the is is to existing

of and I set say, different policy kind I tax is of say PTCs in constricted our United States or just ITCs we’re think Todd, the that up were given, more environment I would terms would whether position almost not. in the

us I the good either if is think anything. way. I to want add don’t know pathway for you

Todd Stack

what I electricity very, complex. to or equity they mean on it benefit require actually pay market the equity It’s to really market. component. pretty and for a market, deep a very does the part PTCs. the the the the make really structure to efficient tax of not advantage PTC But financing our falls for sure. just and challenging of tax It’s It’s economics a very projects take ITCs customers

John Kousinioris

more much I conventional think land. and liquid, by are I very, project be we say a very easier But the renewables financing to Naji, Whereas for able demand would Todd unabated. to contrast remain – mean if we’d would that to to able customers it I perspective think we continues them. have product, at I put least you from more had know our to we market, be

Todd Stack

Absolutely!

Naji Baydoun

So last just maybe one Canada. on question

Quebec now? other via focus potentially you’d and Ontario others. a You stay partnerships for activity in to be markets in but on a or here, access those rather focused for really pick-up Alberta or in we there it mentioned are some just provinces, that some Is Alberta’s seeing in you growth maybe more way the of

John Kousinioris

not both know perspective. our here. sort we’re pricing wedded on We No, just, from a Alberta. It’s that we you a a know construction certainly a It’s a perspective, in backyard. pipeline perspective market to being focused well, don’t developing customer exclusively we – optimization and of perspective, we regulatory and an

this something I rule with no. really that at active Quebec have through. that a at from to we it’s time able more renewables to this active be it’s we anything point push whether point. Ontario we in in doing answer that’s The think particularly Would out in nothing is don’t to or But, perspective So somebody? have

Naji Baydoun

it. got Okay, you. clear. very Thank That’s

John Kousinioris

Great! Thank you.

Operator

Thank Please you. Calgary final Chris The go The question from at comes ahead. Herald. Varcoe

Chris Varcoe

as just Hi see the biggest bit John! clean the moves a with do concerns or as little federal could Canadian the biggest are I’m challenges standards? electricity you what elaborate wondering forward government what if you on your

John Kousinioris

morning question. thanks Chris and Good for that

as are is up clean. all interactions lot do in reliability a sure that make holistic one to above. government at they to levels of isn’t you look, need sure need three things that’s they us there that when we an levels just an the and ensuring with of levels to But we industry to order the on need our a of we or with and that wind, think is and on biggest potentially trying order three all us balance kind words, just XXXX, that objective a to where so to focus of get think emissions market we’ll remind just of in and would I XXXX. a so we’ll isn’t be it’s where gets continually to for we’ll to affordable, to for the be There times need right. aspirationally and I about that, think forget leg it’s be we we also require other get only those storage, and expense them of of the to hydro, us a of cooperation know to when any legs to from government, clean, among keeping the at of In as there’s It need three-legged what stool. it legs them tell speak that We engage of their going require need all think between need importance reliability. I industry need way, stool, the need need concern clean, come to element know should And make we’ll stool gas, think And we’ll structure one solar. of there. perspective, the to it’s the we’re And of a get it’s or You example, stool, to in government so three-legged all affordability. and focus going we going

to can of objective when lot problem. have need that’s the blowing, of very that to brownouts your jurisdiction. not the sun the a clean we or nobody don’t the if system out it’s sure market a We can’t backstop have or or You’re in have we to that isn’t you’ve the but wind going in isn’t it, I’m be water the have afford generation grid, in sense unreliable if kinds met the a don’t we

think be So, it’s really number would about that I I would say, one.

and say Like that do the assumption that question say technological know or notion I the super more from an thing The a carbon policy other stuff, we’re effectiveness COX cost of perspective. effective or embedded storage from around will be there’s be capture a there that solutions. I more forward, perspective think will we would in trying all will so come and and effective in to storage as there’s would Chris is that will is, you effective I go an both capturing and emissions from in, everything that hydrogen marks become perspective that cost

know will Will knew of they and going as a to three to get that and this have worry, to to effective programs for in and a there we was tremendous is of uncertainty think customers? to ticks our it generation cost we’d So great. is type area stool, trying of regardless effective? evolve all to be the which balanced where the I aware will to development policy, how for accelerate to and amount trying that and legged government funding there. that land technology of get second general because policy, trying encourage other to all we’re it think if see. to, a quite that way develop So, don’t that’s to to and you it that when and But XXXX one be be I sure that, are needs But there’s yet, get of I there’s that able of

we type bit to plane because really be whether the us of other things don’t one technology government implore that’ll little the In other, – end one we is favor day. the to of of One technology words, land over that don’t be the a the agnostic. know also helps do the just at

So hopefully that sense. a you a of gives bit

Chris Varcoe

achievable do had and believe that you by grid of just with Yes, the Is federal in what net you’ve are point conversations the a they is view? your follow just to zero up seeking government? then, given XXXX achievable

John Kousinioris

trying it’s at modeling look and of so a look, – do internally a to zero. of question we think I to to get bunch pathways net

of fair have. where terms to. to go trying the the in expensive and is, answer today with So, ways. reductions we grid the where yes. emissions that between that and do can in technology to that aspiration our we to go existing a question answer that decarbonize And XXXX? I The trying that is can last (A) we’re challenge in are do of think the where substantially XX% of we hard bit is let super to two do Do we’re see to think me I we we today

do that to do to I’m yes. So able able be everybody I pretty our that. get? think, to we’ll I in be think where that ability we’ll substantially confident is get to hoping

going we’re I to Alberta was on of our our that was we it, not And had, focused megatons resources when where and need of was on that I’m into say natural. Saskatchewan it those in that provinces Brunswick favorable whether built help or New think provinces bit to whether a last more Chris, of I rich just water it It’s throw you get like of little that us more for mix the frankly, COX because was thinking the out. to are do our part too, hydro we’re in where generation coal, can it world.

an and The Saskatchewan a nuclear above much really Ontario Alberta it’s more I challenge and is So the know, all much why you and ton there’s so it’s Manitoba nationally hydro country. for of has and and like electricity is water. think solution. of as mean in so that’s the It’s the prairie who don’t the I provinces frankly of country, decarbonized and the there’s in burden, easier substantially

mindful forward of it’s getting tool that we just as think the success. well, I that very, are going move to we I to get of know you to three and being legged think tail

Chris Varcoe

or on they with government guess for the that that, input as the Alberta just I up wrapping your regards be to know follow process I to review, recommendations tier the that up. Finally, review? conclude main tier would is What recommendation

John Kousinioris

on at I the we and things say, some within chart through would look, still a of our looking the mean worked course way is doing we province applied, in is we’re the are that response - terms ensures we’re I Yeah, encouraging control to that – that, controlled is a how of in I that working we pricing province. carbon that the levers Chris.

of federal developing policy the directing a of words, in government kind details how the where terms dictates environment to, get of is control of really So that’s that that at key There policy in a it’s terms us really that in decisions out. the to other legged made. probably of meets That’s we policy is looking is Edmonton, tool in three kind again done, the recommendations. made of our paper but

to But make well I they and we’ll on much a of the I We’re in very would of over and very the province the is direction province really think transpires would sure balance review that see the advised that doing I most they going the be the that. focused much think are the of, supportive of the course land policy that by say that, province with how controlled is year.

So I from just and that aligned TransAlta, not pretty I perspective we’re think think.

the players of province encouraging the most be know would approach. that You within of

Chris Varcoe

you. Thank

John Kousinioris

Great!

Operator

are you. further you with closing may questions Thank and no proceed There comments.

Chiara Valentini

Thank our you, Joanna. Thank That concludes today. Great! you everyone. call for

please you to don’t great hesitate to TransAlta any If questions, Have Relations team. a day! have reach Investor out the

Operator

for and participating we disconnect conference today. We Ladies you you lines. for your please your concludes that call ask and this thank gentlemen,

TransAlta (TAC) 6 Aug 222022 Q2 Earnings call transcript