Risk Management

As a responsible corporation, TransAlta has well established structures and processes in place to identify and manage risks which may materially affect our business and, in turn, the interests of our shareholders and other stakeholders. Each year we carry out a life of asset review which produces an asset business plan. These plans consider the broad range of environmental, economic and social risks and opportunities facing our company — everything that affects our ability to sustain our business and create long-term shareholder value.

We follow a two-stage approach to creating this strategic document:

• First, each of our asset teams develops a business plan that identifies commercial and operational risks and opportunities for their plant. These plans consider different issues, including — but not limited to — maintenance, fuel pricing, emerging regulations, the costs of environmental improvements and changes in regional electricity pricing and infrastructure.
• Second, we combine this information with a review of our financial activities, including financing and debt and equity transactions, to develop TransAlta’s five-year financial plan.

In preparing the business plan in early 2005, we put greater emphasis on better understanding the impact of interest groups and potential emission reduction obligations on our long-term profitability.