TransAlta Announces TSX Acceptance of Previously Announced Normal Course Issuer Bid
TransAlta Corporation (TransAlta or the Company) (TSX: TA; NYSE: TAC) today announced that the Toronto Stock Exchange (TSX) has accepted the notice filed by the Company to implement a normal course issuer bid (NCIB) for a portion of its common shares (Common Shares).
Pursuant to the NCIB, TransAlta may repurchase up to a maximum of 14,000,000 Common Shares, representing approximately 4.86% of issued and outstanding Common Shares as at March 2, 2018. Purchases under the NCIB may be made through open market transactions on the TSX and any alternative Canadian trading platforms on which the Common Shares are traded, based on the prevailing market price. Any Common Shares purchased under the NCIB will be cancelled.
Transactions under the NCIB will depend on future market conditions. TransAlta retains discretion whether to make purchases under the NCIB, and to determine the timing, amount and acceptable price of any such purchases, subject at all times to applicable TSX and other regulatory requirements. TransAlta may also enter into an automatic securities purchase plan in connection with its NCIB that contains parameters regarding how its Common Shares may be repurchased during times when it would ordinarily not be permitted to purchase Common Shares due to regulatory restrictions or self-imposed blackout periods.
The period during which TransAlta is authorized to make purchases under the NCIB commences on March 14, 2018 and ends on March 13, 2019 or such earlier date on which the maximum number of Common Shares are purchased under the NCIB or the NCIB is terminated at the Company’s election.
Under TSX rules, not more than 102,039 Common Shares (being 25% of the average daily trading volume on the TSX of 408,156 Common Shares for the six months ended February 28, 2018) can be purchased on the TSX on any single trading day under the NCIB, with the exception that one block purchase in excess of the daily maximum is permitted per calendar week.
The NCIB provides the Company with a capital allocation alternative with a view to long-term shareholder value. TransAlta’s Board of Directors and Management believe that, from time to time, the market price of TransAlta’s Common Shares does not reflect the underlying value and purchases of Common Shares for cancellation under the NCIB may provide an opportunity to enhance shareholder value.
As of March 2, 2018, there are 287,903,467 Common Shares outstanding, of which 287,297,124 Common Shares are considered to be in the public float as they are not held by directors, officers or principal shareholders of the Company. Accordingly, the maximum number of Common Shares that may be repurchased under the NCIB represents approximately 4.86% of the number of Common Shares currently outstanding, and approximately 4.87% of the public float.
About TransAlta Corporation:
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words expect, anticipate, continue, estimate, may, will, project, should, propose, plans, intends and similar expressions are intended to identify forward-looking information or statements. More particularly, and without limitation, this news release contains forward-looking statements and information relating to: TransAlta’s intentions with respect to the NCIB and purchases thereunder, the entering into of an automatic securities purchase plan; and the effects of repurchases of Common Shares, including any enhancement to shareholder value. These statements are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: legislative or regulatory developments; any significant changes to Common Share price or trading volume; continued availability of capital and financing; changes to general economic, market or business conditions; business opportunities that become available to, or are pursued by TransAlta; and other risk factors contained in the Company’s annual information form and management’s discussion and analysis. Readers are cautioned not to place undue reliance on these forward-looking statements or forward-looking information, which reflect TransAlta’s expectations only as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Note: All financial figures are in Canadian dollars.
TransAlta Announces TSX Acceptance of Previously Announced Normal Course Issuer Bid
Fourth Quarter 2017 Highlights
Funds from Operations up 9.5% to $219 million, or $0.76 per share
Free Cash Flow up 63% to $101 million, or $0.35 per share
Net debt reduction of $300 million
Full Year 2017 Highlights
Funds from Operations up 9.5% to $804 million, or $2.79 per share
Free Cash Flow up 28% to $328 million, or $1.14 per share
Net debt reduction of $530 million to $3.4 billion
FFO / Debt ratio above 20% for the first time since 2011
TransAlta Corporation (TransAlta or the Company) (TSX: TA; NYSE: TAC) today reported its fourth quarter and full year 2017 financial results, with free cash flow (FCF) of $328 million for the full year. Funds from operations (FFO) increased 9.5% to $804 million for the full year compared to $734 million in 2016. FCF was above our Q2 revised guidance due to better than expected results from our coal recovery plan in the second half of the year. Comparable EBITDA from generation increased 13% year-over-year, excluding Canadian Coal, due to strong performance in our Wind and Solar, Australian Gas, Canadian Gas and US Coal segments. Australian Gas celebrated the commissioning of the South Hedland power station in July, the Canadian Gas segment benefitted from the settlement of the contract indexation dispute with the Ontario Electricity Financial Corporation (OEFC), and US Coal and Wind and Solar successfully drove down their costs of generation. As expected, the performance of our Canadian Coal segment, on a year-over-year basis, was negatively impacted by higher coal costs, and higher operating, maintenance, and administrative costs. In 2016, the Canadian Coal segment benefitted from the reversal of an $80 million provision for the Keephills outage in 2013. Solid performance by our operating team in 2017 allowed us to deliver financial performance over our expectations,- said Dawn Farrell, President and Chief Executive Officer. By the end of 2018, our de-leveraging program will be mostly complete, and we’ll be poised to reconsider how we allocate capital to enhance shareholder value. With the early repayment of our US$500 million bond this month, the better than expected performance from the business, and the strong outlook for 2018, we are confident in the execution of our plan for 2018 to 2020 and are therefore allocating more capital to our shareholders. Consequently, the Company intends to seek Toronto Stock Exchange (TSX) acceptance of a normal course issuer bid (NCIB). The Board of Directors has authorized the repurchases of up to 14,000,000 of its common shares, representing approximately five per cent of TransAlta’s public float. Purchases under the NCIB are expected to be made through open market transactions on the TSX and any alternative Canadian trading platforms, based on the prevailing market price. Any Common Shares purchased under the NCIB will be cancelled. At the end of the year our total net debt was approximately $3.4 billion, down $530 million from the beginning of the year, due to the scheduled repayment of a US$400 million Senior Note using existing liquidity. Our adjusted FFO to adjusted net debt and adjusted net debt to comparable EBITDA metrics improved significantly to 20.4 per cent and 3.6 times, respectively. 2018 Outlook TransAlta reaffirms its financial outlook for 2018 which was released on December 6, 2017 and is outlined in the table below:
Measure
Low
High
Comparable EBITDA(1)
$950 million
$1,050 million
FFO(1)
$725 million
$800 million
FCF(1)
$275 million
$350 million
FCF(1) Including PPA Termination Payment
$475 million
$550 million
Sustaining and Productivity Capital
$215 million
$235 million
Range of key power price assumptions:
Market
Power Prices ($/MWh)
Alberta Spot
$50 to $60
Alberta Contracted
$35 to $40
Mid-C Spot (US$)
$20 to $25
Mid-C Contracted (US$)
$47 to $53
Other assumptions relevant to 2018 outlook:
Canadian Coal Capacity Factor
65% to 75%
Hydro/Wind Resource
Long term average
2018 Key Priorities In addition to meeting the financial targets set out in the outlook, everything we do in 2018 will move us closer to 100% clean power by 2025. Our teams are focused on the following:
Blending our coal with gas to reduce costs, emissions and carbon tax expenses;
Progressing the conversion of our coal plants to 100% natural gas;
Growing our renewables platform;
Increasing our financial flexibility through the execution of our de-leveraging program; and
Continuing to lead in safety and environment performance.
Fourth Quarter Highlights
Entered into a Letter of Intent with Tidewater Midstream and Infrastructure Ltd. for the construction of a 120 kilometre natural gas pipeline to TransAlta’s generating units at Sundance and Keephills. The pipeline will facilitate TransAlta’s strategy to convert its coal units to natural gas.
Announced the acceleration of the conversion of Sundance Units 3 to 6 and Keephills Units 1 and 2 from coal-fired generation to gas-fired generation in the 2021 to 2022 timeframe, a year earlier than originally planned.
Clarified the optimization plan for the Sundance units in 2018 and 2019 to ensure that two Sundance coal units can operate at high capacity utilizations with lower costs through the period to 2020.
Gained carbon credits for existing renewable assets, specifically our wind and hydro generation, under Alberta’s output based allocation system for carbon emissions which became effective January 1, 2018.
TransAlta Renewables received approximately US$325 million from Fortescue Metals Group for the repurchase of the Solomon power station, and used a portion of those funds to redeem the outstanding $215 million convertible unsecured subordinated debentures held by TransAlta.
Important Subsequent Events
On February 20, 2018, TransAlta Renewables entered into an arrangement to acquire two construction ready wind projects, consisting of a 90 MW project in Pennsylvania and a 29 MW project in New Hampshire, supported by long-term contracts with highly creditworthy counterparties.
Fourth Quarter and Full Year Segmented Review
Comparable EBITDA (in CAD$ millions)
3 Months Ended
Year Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Canadian Coal
66
178
324
473
U.S. Coal
21
14
89
41
Canadian Gas
62
70
263
244
Australian Gas
29
32
137
128
Wind and Solar
78
66
214
195
Hydro
14
20
75
82
Energy Marketing
25
13
45
52
Corporate
(20)
(19)
(85)
(71)
Total Comparable EBITDA
275
374
1,062
1,144
Canadian Coal: Comparable EBITDA for the year ended Dec. 31, 2017 decreased $149 million compared to 2016, primarily due to the impact in 2016 of the reversal of an $80 million provision for the Keephills outage in 2013. EBITDA for 2017 was negatively impacted during the year by higher coal costs, and higher OM&A costs.
U.S. Coal: Comparable EBITDA increased $48 million compared to 2016 due to increased sales volumes that led to increased margins from higher market prices and higher contract rates. Lower coal transportation costs and the favourable impact of mark-to-market on forward financial contracts also had a positive impact to comparable EBITDA.
Canadian Gas: Comparable EBITDA for 2017 increased by $19 million compared to 2016, primarily due to the settlement with the OEFC of the retroactive adjustment to price indices at Ottawa and Windsor and the positive impact from the mothballing of our Mississauga gas facility. This was partially offset by a reduction in unrealized mark-to-market positions for gas contracts and the lower earnings at Windsor under a new peaking contract.
Australian Gas: Comparable EBITDA for the year increased by $9 million compared to 2016, due to the commissioning of the South Hedland power station and an increase in customer load, partially offset by the early termination of the lease for our Solomon power station.
Wind and Solar: Comparable EBITDA for 2017 increased $19 million compared to 2016, primarily driven by higher volumes at contracted facilities, higher prices on contracted and uncontracted assets, and lower costs on some service agreements.
Hydro: Comparable EBITDA for 2017 decreased $7 million compared to 2016. The decrease was due to higher OM&A, and a $3 million positive adjustment in 2016 relating to a prior year metering issue at one of our facilities.
Energy Marketing: Comparable EBITDA for 2017 from Energy Marketing decreased $7 million compared to 2016, due to unfavourable first quarter results which were impacted by warm winter weather in the Northeast, significant precipitation in the Pacific Northwest, and reduced margins from our customer business.
Corporate: Our Corporate overhead costs were $14 million higher in 2017 compared to 2016, due to higher annual incentive compensation and our Greenlight initiative costs, which we expect will translate into significant long-term cost savings.
Consolidated Financial Highlights Net loss attributable to common shareholders was $190 million ($0.66 net loss per share) compared to net earnings of $117 million ($0.41 net earnings per share) in 2016. Earnings in 2017 were negatively impacted by lower comparable EBITDA of $82 million, and $105 million due to the reduction of the U.S. tax rate announced in December. Higher depreciation of $34 million year-over-year was due mostly to: $80 million higher depreciation at Canadian Coal due to the shortening of the useful lives of Keephills 3 and Genesee 3, and higher depreciation at Australian Gas of $20 million due to the commissioning of South Hedland in July, partially offset by lower depreciation at Canadian Gas of $62 million due primarily to the accelerated depreciation of the Mississauga facility in 2016. Last year, Canadian Gas included a $48 million positive impact in connection with the Mississauga re-contracting. Total sustaining capital expenditures of $235 million were $35 million lower compared to 2016. Total capital expenditures of $259 million, which includes productivity capital expenditures, were $21 million lower than 2016 and in-line with our guidance for the year. Our productivity capital includes funding for Project Greenlight transformation initiatives, which are expected to reach payback within two years and result in annual recurring savings. Fourth Quarter and Year Ended 2017 Highlights
In $CAD millions, unless otherwise stated
3 Months Ended
Year Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Adjusted availability (%)(2,3)
88.4%
88.9%
86.8%
89.2%
Production (GWh) (3)
10,374
10,624
36,900
38,157
Revenue
638
717
2,307
2,397
Comparable EBITDA (1,4)
275
374
1,062
1,144
Net Earnings (loss) attributable to common shareholders
(145)
61
(190)
117
FFO (1,4)
219
200
804
734
Cash Flow from Operating Activities
81
122
626
744
FCF (1,4)
101
62
328
257
Net Earnings (loss) per common share
($0.50)
$0.21
($0.66)
$0.41
FFO per share (1,4)
$0.76
$0.69
$2.79
$2.55
FCF per share (1,4)
$0.35
$0.22
$1.14
$0.89
Dividends declared per common share
$0.04
$0.08
$0.12
$0.20
TransAlta is in the process of filing its Annual Information Form, Audited Consolidated Financial Statements and accompanying notes, as well as the associated Management’s Discussion & Analysis (MD&A). These documents will be available today on the Investors section of TransAlta’s website at transalta.com or through SEDAR at www.sedar.com. TransAlta will also be filing its Form 40-F with the U.S. Securities and Exchange Commission. The form will be available through their website at www.sec.gov. Paper copies of all documents are available to shareholders free of charge upon request. Conference call We will hold a conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) tomorrow, March 2, 2018, to discuss our fourth quarter and full year 2017 results. The call will begin with a short address by Dawn Farrell, President and CEO, and Donald Tremblay, Chief Financial Officer, followed by a question and answer period for investment analysts and investors. A question and answer period for the media will immediately follow. Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation as the company and Sally Taylor as moderator.
Dial-in numbers: Toll-free North American participants call: 1-888-231-8191
Outside of Canada & USA call: 1-647-427-7450
A link to the live webcast will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/powering-investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 3757816 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available. Notes(1) These items are not defined under IFRS. Presenting these items from period to period provides management and investors with the ability to evaluate earnings trends more readily in comparison with prior periods results. Refer to the Comparable Funds from Operations and Comparable Free Cash Flow and Earnings and Other Measures on a Comparable Basis sections of the Company’s MD&A for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.(2) Availability and production includes all generating assets (generation operations and finance leases that we operate). (3) Adjusted for economic dispatching at U.S. Coal.(4) During the fourth quarter of 2017, we revised our approach to reporting adjustments to arrive at FFO, mainly to better represent FFO as a cash metric. Previously, FFO was adjusted to include, exclude, or to modify the timing of cash impacts related to adjustments made in arriving at comparable EBITDA. As a result, comparable EBITDA, FFO, and FCF for 2016 has been revised accordingly. About TransAlta Corporation: TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business. For more information about TransAlta, visit our web site at transalta.com.Cautionary Statement Regarding Forward Looking InformationThis news release contains forward looking statements, including statements regarding the business and anticipated financial performance of the Company that are based on the Company’s current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In some cases, forward-looking statements can be identified by terminology such as plans, expects, proposed, will, anticipates, develop, continue, and similar expressions suggesting future events or future performance. In particular, this news release contains forward looking statements including, without limitation, statements pertaining to TransAlta’s business and anticipated future financial performance; our expected strategies and opportunities; the ability to further our de-leveraging throughout 2018, and any impact on dividends; ability to successfully execute our plan for 2018 to 2020 in order to allocate capital shareholders; the implementation of an NCIB, including the approval of the proposed terms thereof by the TSX and the repurchase of any common shares by the Company pursuant to the NCIB; TransAlta’s key priorities for 2018, including blending our coal with gas and the resultant reduction in costs, accelerating the conversion of our coal plants to natural gas, growing our renewable platform and executing on our de-leveraging program; our 2018 financial outlook, including expected comparable EBITDA, FFO and free cash flow ranges; expected sustaining and productivity capital expenditures for 2018; expected Canadian coal capacity factor for 2018; power prices in Alberta and Mid-C; expectations regarding governmental regulatory regimes and legislation and the expected impact of such regimes and regulations on the Company; the terms of any definitive agreement with Tidewater; the acceleration of the conversion of Sundance Units 3 to 6 and Keephills Units 1 and 2 from coal-fired generation to gas-fired generation; ability to ensure that two Sundance coal units can operate at high capacity utilizations with lower costs through the period to 2020; ability to close the 29 MW wind project in New Hampshire; and the transformation of TransAlta to a gas and renewables company. These forward-looking statements are not historical facts but are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: operational risks involving our facilities; changes in market prices where we operate; unplanned outages at generating facilities and the capital investments required; equipment failure and our ability to carry out repairs in a cost effective and timely manner; the effects of weather; disruptions in the source of fuels, water or wind required to operate our facilities; energy trading risks; failure to obtain necessary regulatory approvals in a timely fashion; negative impact to our credit ratings; legislative or regulatory developments and their impacts, including as it pertains to the capacity market being developed in Alberta; increasingly stringent environmental requirements and their impacts; increased competition; global capital markets activity (including our ability to access financing at a reasonable cost); changes in prevailing interest rates; currency exchange rates; inflation levels and commodity prices; general economic conditions in the geographic areas where TransAlta operates; disputes or claims involving TransAlta or TransAlta Renewables, including those pertaining to South Hedland and Solomon Power Stations; and other risks and uncertainties discussed in the Company’s materials filed with the Canadian securities regulatory authorities from time to time and as also set forth in the Company’s MD&A and Annual Information Form for the year ended December 31, 2017. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta’s expectations only as of the date of this news release. The financial outlook that is contained in this news release was approved on March 1, 2018 and is being provided for the purpose of giving the reader information about management’s current expectations and plans. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Note: All financial figures are in Canadian dollars unless otherwise indicated.
TransAlta Announces TSX Acceptance of Previously Announced Normal Course Issuer Bid
TransAlta Corporation (TransAlta) (TSX: TA; NYSE: TAC) will release its fourth quarter and full year 2017 results after market close on Thursday, March 1, 2018. A conference call and webcast to discuss the results will be held for investors, analysts, members of the media and other interested parties the following day beginning at 9:00 a.m. MST (11:00 a.m. EST). The media will be invited to ask questions following analysts.
Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation as the company and Sally Taylor as moderator.
Dial-in numbers Fourth Quarter and Full Year 2017 Results:
Toll-free North American participants call: 1-888-231-8191
Outside of Canada & USA call: 1-647-427-7450
A link to the live webcast will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 3757816 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
About TransAlta Corporation:
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
TransAlta Announces TSX Acceptance of Previously Announced Normal Course Issuer Bid
TransAlta Corporation (TransAlta or the Company) (TSX: TA; NYSE: TAC) today announced that it has called for the redemption of its outstanding US$500 million 6.65% senior notes maturing May 15, 2018 (the Senior Notes). The Senior Notes will be redeemed on March 15, 2018 at a price equal to the greater of: (i) 100% of the principal amount of the Senior Notes and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date on a semi-annual basis at the treasury rate plus 45 basis points, plus in each case, accrued interest thereon to the date of redemption.
About TransAlta Corporation:
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words expect, anticipate, continue, estimate, may, will, project, should, propose, plans, intends and similar expressions are intended to identify forward-looking information or statements. More particularly, and without limitation, this news release contains forward-looking statements and information relating to the redemption of the Senior Notes, including the timing of such redemption. These statements are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: legislative or regulatory developments; and continued availability of capital. Readers are cautioned not to place undue reliance on these forward-looking statements or forward-looking information, which reflect TransAlta’s expectations only as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
TransAlta Announces TSX Acceptance of Previously Announced Normal Course Issuer Bid
The Board of Directors of TransAlta Corporation (TSX: TA; NYSE: TAC) today declared a quarterly dividend of $0.04 per common share payable on April 1, 2018 to shareholders of record at the close of business on March 1, 2018.
The Board of Directors also declared the following quarterly dividend on its Cumulative Redeemable Rate Reset First Preferred Shares for the period starting from and including December 31, 2017 up to but excluding March 31, 2018:
Preferred Shares
TSX Stock Symbol
Dividend Rate
Dividend Per Share
Record Date
Payment Date
Series A
TA.PR.D
2.709%
$0.16931
March 1, 2018
March 31, 2018
Series B*
TA.PR.E
2.902%
$0.17889
March 1, 2018
March 31, 2018
Series C
TA.PR.F
4.027%
$0.25169
March 1, 2018
March 31, 2018
Series E
TA.PR.H
5.194%
$0.32463
March 1, 2018
March 31, 2018
Series G
TA.PR.J
5.300%
$0.33125
March 1, 2018
March 31, 2018
*Please note the quarterly floating rate on the Series B Preferred Shares will be reset every quarter.
All currency is expressed in Canadian dollars except where noted. When the dividend payment date falls on a weekend or holiday, the payment is made the following business day.
About TransAlta Corporation:
TransAlta Corporation (TransAlta) is a power generation and wholesale marketing company focused on creating long-term shareholder value. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta’s focus is to efficiently operate wind, hydro, solar, natural gas and coal facilities in order to provide customers with a reliable, low-cost source of power. For over 100 years, TransAlta has been a responsible operator and a proud contributor to the communities in which it works and lives. TransAlta has been recognized on CDP’s Canadian Climate Disclosure Leadership Index (CDLI), which includes Canada’s top 20 leading companies reporting on climate change, and has been selected by Corporate Knights as one of Canada’s Top 50 Best Corporate Citizens and is recognized globally for its leadership on sustainability and corporate responsibility standards by FTSE4Good.
For more information about TransAlta, visit our web site at www.transalta.com or follow us on Twitter @TransAlta.
TransAlta Announces TSX Acceptance of Previously Announced Normal Course Issuer Bid
TransAlta Corporation (TransAlta or the Company) (TSX: TA; NYSE: TAC) today responded favourably to details of the Government of Alberta’s determination to permit carbon credits to be earned by existing wind and hydro generation in the Alberta fleet.
On December 6, 2017, the Government of Alberta announced its intention to adopt a carbon credit regime that will fully recognize the value of carbon reductions from the generation of electricity from existing renewable assets. Under Alberta’s output based allocation system for carbon emissions, TransAlta’s existing wind and hydro facilities will receive credits for emissions below the performance standard of 0.37 tonnes of CO2 per MWh. Effective January 1, 2018, these credits can be used to offset up to 40%, escalating to 60% by 2022, of the carbon price obligations incurred by generation that exceeds the performance standard, which will be charged a price of $30 per tonne of CO2. The carbon credit regime will allow the Company to allocate the emissions benefits from its existing renewables generation in Alberta to offset the direct carbon costs of its thermal generation, including generation from its coal-to-gas converted units.
The recent announcement by the provincial government will more competitively position our existing renewable generation,- said Dawn Farrell, President and Chief Executive Officer. By treating existing renewable generation equally, we expect to eventually receive $30 million to $50 million annually in credits attributable to our existing renewable assets.
The Pan-Canadian Framework on Clean Growth and Climate Change agreed to in late 2016 by the Government of Canada and most provinces and territories, including Alberta, is expected to result in the carbon price increasing to $40 per tonne of CO2 in 2021 and $50 per tonne of CO2 in 2022, thereby increasing the value of the carbon credits in the future.
About TransAlta Corporation:
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words expect, anticipate, continue, estimate, may, will, project, should, propose, plans, intends and similar expressions are intended to identify forward-looking information or statements. More particularly, and without limitation, this news release contains forward-looking statements and information relating to: the Government of Alberta’s carbon credit regime, including that it will fully recognize the value of carbon reductions from existing renewable generation and that TransAlta’s existing wind and hydro facilities will receive credits for emissions below the performance standard of 0.37 tonnes of CO2 per MWh; that carbon credits can be used to offset up to 40%, escalating to 60% by 2022, of the carbon price obligations; the carbon price obligation will be $30 per tonne of CO2.; and the expected benefits to be realized by the Company as a result of the Government of Alberta’s carbon credit regime, including facilitating a more competitive position for the Company’s thermal units; the carbon price increasing to $40 per tonne of CO2 in 2021 and $50 per tonne of CO2 in 2022; the increase in value of the carbon credits in the future; and the receiving between $30 million and $50 million annually in credits attributed to the Company’s existing renewable generation. These statements are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: legislative or regulatory developments, including as it pertains to the Alberta capacity market; the Federal and/or Provincial governments failing to implement the proposed legislation or regulations; the Federal and/or Provincial governments adopting different carbon prices rules; the Provincial government determining not to continue the proposed carbon regime regulation beyond its expected expiry in 2022; and other risk factors contained in the Company’s annual information form and management’s discussion and analysis. Readers are cautioned not to place undue reliance on these forward-looking statements or forward-looking information, which reflect TransAlta’s expectations only as of the date of this news release. The purpose of the financial outlooks contained in this news release are to give the reader information about management’s current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Note: All financial figures are in Canadian dollars.
TransAlta Announces TSX Acceptance of Previously Announced Normal Course Issuer Bid
TransAlta Corporation (TransAlta or the Company) (TSX: TA; NYSE: TAC) announced today that its Board of Directors has approved additional elements in the Company’s strategy to accelerate its transition to gas and renewables generation. These elements include:
Entering into a letter of intent with Tidewater Midstream and Infrastructure Ltd. (Tidewater) to construct a 120 kilometre natural gas pipeline from Tidewater’s Brazeau River Complex to TransAlta’s generating units at Sundance and Keephills to eventually supply the Company with up to 340 million cubic feet of gas per day;
Accelerating the conversion of Sundance Units 3 to 6 and Keephills Units 1 and 2 from coal-fired generation to gas-fired generation in the 2021 to 2022 timeframe, a year earlier than originally planned. The coal-fired plants operated by TransAlta, once converted to gas, are anticipated to be able to run through to 2031 to 2039 a significant lengthening of their asset lives; and
Mothballing temporarily a combination of Sundance units in 2018 and 2019 to ensure that two Sundance coal units can operate at high capacity utilizations with lower costs through the period to 2020 when additional power will be needed in the Alberta market. Sundance Units 3 to 6 will re-enter the market starting in 2020 as the demand for electricity rises.
Details on the Company’s Brazeau Pumped Storage Project, which is a key cornerstone of its gas and renewables strategy, are also provided. The Company expects dispatchable renewable resources to be valuable in a future where carbon emitting plants will mostly provide back up to low cost intermittent renewable resources.
The Company also provided its 2018 annual guidance today, which is discussed below.
We continue to position TransAlta as a leader in clean power generation and our strategy dramatically improves our competitive position and our ability to generate strong cash flow over the long term,- said Dawn Farrell, President and Chief Executive Officer. Our asset base in Alberta is poised to ensure that we can provide low cost, clean, reliable and firm electricity to customers.
Gas Supply for Conversions and Accelerated Coal-to-Gas Conversion Schedule
As announced earlier today, TransAlta has entered into a letter of intent with Tidewater for the construction of a 120 kilometre pipeline from their Brazeau River Complex to TransAlta’s Sundance and Keephills facilities. The pipeline will provide initial capacity of 130 million cubic feet of gas per day by 2020, and have expansion capability to 340 million cubic feet of gas per day. The initial capacity will support fuel blending, using a fuel combination of coal and gas for generation, which will reduce the marginal cost as well as emissions. TransAlta will have the option to invest up to 50 percent in the pipeline, which, if exercised, would reduce the costs associated with the tolling agreement.
The decision to work with Tidewater advances the timeframe for the construction of a pipeline and permits the acceleration of plant conversions. As a result, and given the clarity provided by the draft coal-to-gas conversion rules proposed by the Government of Canada, the Company has determined to accelerate the conversion of Sundance Units 3 to 6 and Keephills Units 1 and 2 from coal-fired generation to gas-fired in the 2021 to 2022 timeframe, a year earlier than originally planned. TransAlta remains of the view that having at least two pipelines supplying natural gas would reduce operational risks and continues to advance discussions with other parties to construct additional pipelines to meet the remaining gas supply requirements for the facilities.
Although not yet finalized, the Government of Canada has proposed coal-to-gas conversion rules that would extend the life of TransAlta’s gas conversion units by five-to-ten years past their federal end of coal life, depending on their CO2 emissions profile. The proposed rules would see the life of TransAlta’s entire coal-fired fleet extended by an aggregate of approximately 75 years.
In addition to the extending of their operating lives, the benefits of converting units to gas generation include: (i) significantly lowering carbon intensities, emissions, and costs; (ii) significantly lowering operating and sustaining capital costs; and (iii) increasing operating flexibility.
Sundance Operations in the 2018 to 2020 Timeframe
The Board of Directors have approved the following;
Sundance Unit 3, will be temporarily mothballed on April 1, 2018 for a period of up to two years;
Sundance Unit 5, will be temporarily mothballed on April 1, 2018 for a period of up to one year; and
Sundance Unit 4, will be temporarily mothballed on April 1, 2019 for a period of up to two years.
The decision to mothball selected units ensures that the remaining units operate at strong capacity utilization factors which ensure competitive cost structures. Sundance Unit 3, Sundance Unit 4 and Sundance Unit 5 comprise 368 MW, 406 MW and 406 MW, respectively, of the 2,141 MW Sundance power plant. TransAlta maintains the flexibility to return mothballed units to service when market fundamentals support the addition of their generation. The mothballing of the units will also assist TransAlta in its preparations for converting the units to gas.
On April 19, 2017, the Company announced that it would retire Sundance Unit 1 and mothball Sundance Unit 2, effective January 1, 2018. Sundance Unit 2 will also be available to return to service in 2020.
Brazeau Pumped Storage
Brazeau Hydro is an existing power station on the North Saskatchewan River location north-west of Edmonton. The facility currently produces 355 MW of power under a power purchase arrangement (PPA) with the Balancing Pool. The PPA expires at the end of 2020. Brazeau Pumped Storage is a development project, at Brazeau Hydro, that would create up to 900 MW of additional generation and storage capability. The facility would utilize the existing footprint to generate power under conditions of strong demand and store power when supply resources outpace demand. It is particularly competitive for ensuring that low cost, intermittent wind and solar generation resources can be stored for use in high demand periods. The Company is developing the project in anticipation of a requirement over time to replace baseload thermal resources with dispatchable renewable resources in the Alberta market. The project, if it were to win a long-term contract in a future competitive call, could be ready for service as early as 2025.
2018 Outlook
For 2018, we expect our annual free cash flow (FCF) to be in-line with our 2017 expected annual FCF, despite the expiry of the Sundance A PPA, the early termination of the Sundance B PPA and Sundance C PPA, and the termination of our Solomon contract in Australia. We have already received approximately $400 million for the early termination of the Solomon contract and we are expecting to receive in excess of $200 million from the Balancing Pool for the early termination of the Sundance B PPA and Sundance C PPA. As a result, we have accelerated our debt reduction plan and will have additional financial flexibility over the next three years. The PPA terminations have provided increased operational flexibility and enables optimization of the Sundance power plant. This optimization results in significant reductions in operating costs as well as sustaining and productivity capital, which we expect will be in the range of $215 to $235 million.
The outlook assumes an average price of $50-60/MWh in Alberta and that the Sundance merchant units will run between 65 to 75% in 2018. The following table outlines TransAlta’s financial targets for 2018:
Measure
Target
Comparable EBITDA(1)
$950 million to $1,050 million
FFO(1)
$725 million to $800 million
FCF (1)
$275 million to $350 million
Dividend
$0.16 per share, 13 to 17 per cent payout of Comparable FCF
Range of key power price assumptions:
Market
Power Prices ($/MWh)
Alberta Spot
$50 to $60
Alberta Contracted
$35 to $40
Mid-C Spot (US$)
$20 to $25
Mid-C Contracted (US$)
$47 to $53
Other assumptions relevant to the 2018 outlook:
Sustaining Capital
$215 million to $235 million
Canadian Coal Capacity Factor
65% to 75%
Hydro/Wind Resource
Long term average
(1) These items are not defined under IFRS. Presenting these items provides management and investors with the ability to evaluate earnings trends more readily in comparison with prior periods results. Refer to the Funds from Operations and Free Cash Flow, Discussion of Segmented Comparable Results, and Earnings and Other Measures on a Comparable Basis sections of TransAlta’s 2017 third quarter management discussion and analysis for additional information.
Investor Day
TransAlta will be hosting an Investor Day at 9:30am ET on Wednesday, December 6th, 2017 during which our executive team will discuss the announcements above. A link to the presentation and live webcast will be available on the Investors section of TransAlta’s website at https://transalta.com/investors/events-and-presentations.
About TransAlta Corporation:
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words expect, anticipate, continue, estimate, may, will, project, should, propose, plans, intends and similar expressions are intended to identify forward-looking information or statements. More particularly, and without limitation, this news release contains forward-looking statements and information relating to: the mothballing of Sundance Units 3, 4 and 5; the expected value of dispatchable renewable resources, such as the Brazeau Pumped Storage project; that carbon emitting plants are expected to primarily provide back up to low cost intermittent renewable resources in the future; the expectation that mothballing a combination of Sundance units in 2018 and 2019 will allow the two operating Sundance coal units to operate at high capacity utilizations to 2020, when additional power is expected to be needed in the Alberta market; the conversion to gas-fired generation of Sundance Units 3 to 6 and Keephills Units 1 to 2, including the timing thereof; the lengthening of the coal-fired plants lives, once converted to gas, to 2031 to 2039;the expected gas supply required for converted units and the construction by Tidewater of a 120 kilometre pipeline to TransAlta’s Sundance and Keephills facilities with a capacity of 130 million cubic feet of gas per day by 2020 and expansion capability to 340 million cubic feet of gas per day; the terms of any definitive agreement with Tidewater, including the option to invest up to 50 percent in the pipeline; the anticipated benefits of converting units to gas; the Government of Canada’s proposed coal-to-gas conversion rules expected to extend the life of TransAlta’s coal units by five-to-ten years past their federal end of coal life, depending on their emissions profile; the life of TransAlta’s coal-fired fleet to be extended by an aggregate of approximately 75-years;the benefits of converting coal-fired generating units to gas-fired generating units; the construction and development of the Brazeau Pumped Storage project, including that such project would create up to 900 MW of additional hydro and storage capability, the timing for when such project could come on-line, the competitiveness of such project, and the anticipated Alberta provincial requirement to replace baseload thermal generation with dispatchable renewable resources; the 2018 outlook, including 2017 expected annual FCF and 2018 financial targets; amounts to be received from the Balancing Pool in connection with the termination of the Sundance B and Sundance C PPAs; increased asset optimization; reductions in operating costs and sustaining and productivity capital in the range of $215 to $235 million; and the 2018 dividend amounts and payout ratio. These statements are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: legislative or regulatory developments, including as it pertains to the Alberta capacity market; the Federal and/or Provincial governments not implementing legislation or regulations facilitating the conversion from coal generation to gas generation; the Federal and/or Provincial governments adopting different carbon prices rules; changes in economic and competitive conditions; inability to secure natural gas supply and the construction of a natural gas pipeline on terms satisfactory to the Company; the introduction of disruptive sources of energy or capacity; changes in the price for natural gas and electricity, including expected pricing in Alberta and Mid-C; decreased demand for energy or capacity; Canadian coal capacity factors and hydro and wind resources being lower than expected; availability of financing; and other risk factors contained in the Company’s annual information form and management’s discussion and analysis. Readers are cautioned not to place undue reliance on these forward-looking statements or forward-looking information, which reflect TransAlta’s expectations only as of the date of this news release. The purpose of the financial outlooks contained in this news release are to give the reader information about management’s current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
TransAlta Announces TSX Acceptance of Previously Announced Normal Course Issuer Bid
TransAlta Corporation (TransAlta or the Company) (TSX: TA; NYSE: TAC) and Tidewater Midstream and Infrastructure Ltd. (Tidewater) (TSX: TWM) announced today that the two companies have entered into a Letter of Intent (LOI) for Tidewater to construct a 120 Kilometre natural gas pipeline from its Brazeau River Complex to TransAlta’s generating units at Sundance and Keephills.
The Tidewater Pipeline will facilitate TransAlta’s strategy to convert its coal units at Sundance and Keephills to natural gas. Converting the coal units extends the operating life of the assets and significantly reduces operating costs and emissions.
The pipeline will provide initial capacity of 130 MMcf/d by 2020, and have expansion capability to 340 MMcf/d, which represents approximately 50% of TransAlta’s gas requirements at full capacity. Under the LOI, TransAlta has the option to invest up to 50% in the pipeline.
Construction of the natural gas pipeline supports our strategy of being a low-cost provider of firm, clean and reliable energy,- said Dawn Farrell, President and Chief Executive Officer of TransAlta. In addition, having greater access to natural gas allows TransAlta to blend natural gas with the coal, prior to fully converting the units, allowing us to take advantage of low natural gas prices and reduce our carbon costs.
Tidewater is excited to enter into a long-term arrangement with TransAlta which is supported by a 15-year take or pay agreement that provides oil and gas producers throughout Western Canada with direct connectivity to a new, large demand source,- said Joel MacLeod, President and Chief Executive Officer of Tidewater. This agreement with TransAlta enables Tidewater to transport production direct from the wellhead, through Tidewater’s extensive natural gas processing and storage infrastructure network, direct to an end market.
About TransAlta Corporation:
TransAlta develops new, and owns and operates a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are Canada’s largest producer of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
About Tidewater Midstream and Infrastructure Ltd.
Tidewater is traded on the TSX under the symbol TWM. Tidewater’s business objective is to build a diversified midstream and infrastructure company in the North American natural gas and natural gas liquids (NGL) space. Its strategy is to profitably grow and create shareholder value through the acquisition and development of oil and gas infrastructure. Tidewater plans to achieve its business objective by providing customers with a full service, vertically integrated value chain through the acquisition and development of oil and gas infrastructure including: gas plants, pipelines, railcars, trucks, export terminals and storage facilities.
Forward-Looking Statements
This news release contains forward looking statements within the meaning of applicable securities laws, including statements regarding: the construction of a 120 kilometre natural gas pipeline from Tidewater’sBrazeau River Complex to TransAlta’s generating units at Sundance and Keephills; TransAlta’s strategy of converting certain of its coal units to natural gas; and the terms of any definitive agreement with Tidewater, including that the pipeline will provide initial capacity of 130 MMcf/d by 2020, have expansion capability to 340 MMcf/d, and provide TransAlta with an option to invest up to 50% in the pipeline. These statements are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: legislative or regulatory developments, including as it pertains to the emission standards; the Federal and/or Provincial legislation impacting the conversion from coal generation to gas generation; changes in economic and competitive conditions; ability to secure natural gas supply; any inability to reach a definitive agreement with Tidewater regarding the construction of a natural gas pipeline on terms satisfactory to the Company; changes in the price for natural gas; decreased demand for energy or capacity; higher costs, expenses and interest rates; strikes or other labour disruptions; and other risk factors contained in the Company’s annual information form and management’s discussion and analysis. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta’s expectations only as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
TransAlta Announces TSX Acceptance of Previously Announced Normal Course Issuer Bid
Lower GHG emissions and 30 per cent more electricity from the same fuel
The Pilbara’s most efficient combined-cycle natural gas power station officially opened today in South Hedland, securing electricity supply to residents and businesses across the Pilbara.
TransAlta Energy Australia, owner-operator of the AU$570 million station, marked the milestone with a formal opening attended by the head of its Canadian parent company, President and CEO, Dawn Farrell, and foundation customer Horizon Power.
The 150 MW power station provides low-cost electricity with low greenhouse gas emissions, feeding power into the North West Interconnected System (NWIS), which serves approximately 47,500 people across Karratha, Port Hedland, South Hedland, Point Samson and Roebourne.
Unlike other natural gas-powered stations in the region, the South Hedland combined-cycle gas power station uses both gas and steam turbines, which together produce up to one-third more electricity from the same fuel than a traditional simple-cycle plant. The waste heat from the gas turbine is routed to the nearby steam turbine, which generates additional electricity and energy.
We are proud to be working with Horizon Power and proud of our work in Australia over the past 20 years and the facilities we have built and maintained in Western Australia,- said TransAlta President and CEO, Dawn Farrell.
We are here to stay in the Pilbara and to have Horizon Power as a key and substantial customer with TransAlta.
South Hedland power station is a clean, cost-effective, important driver of growth, jobs and infrastructure in the Pilbara region, added Ms. Farrell.
Ms Farrell joined Horizon Power’s Managing Director, Frank Tudor, Chairman, Ian Mickel and Parliamentary Secretary to the Energy Minister, Reece Whitby, MLA for the opening.
Completion of the South Hedland Power Station is the outcome of our partnership with TransAlta and several years of work, and is part of a bigger vision to have a fully integrated and coordinated electricity network in the Pilbara,- said Horizon Power’s Frank Tudor.
This new station ensures customers are buying power from the most cost-effective system possible.
This project is a great example of a public-private partnership working together to deliver the right outcomes for the resources sector and regional communities,- said Mr Tudor.
The power station, which has been generating power since July, has an operating life of 40 years and will serve what is expected to be ever-increasing demand from a growing population.
TransAlta has operated in Western Australia since 1996, with six facilities totaling 450 MW of electricity generating capacity. The company’s role in helping to secure energy supply in the region provides a firm foundation upon which hundreds of businesses and thousands of local residents rely to fuel a burgeoning local economy. In other Australian investments, the company is currently also developing the Goonumbla 70 MW solar farm located in NSW.
TransAlta’s Western Australia operations include:
South Hedland Power Station
Southern Cross Energy (Located in Kambalda, Mount Keith, Leinster & Kalgoorlie)
Fortescue River Gas Pipeline
Parkeston Gas Power Station
About TransAlta
TransAlta develops new, and owns and operates a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are Canada’s largest producer of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
TransAlta Announces TSX Acceptance of Previously Announced Normal Course Issuer Bid
TransAlta Corporation (TransAlta or the Company) (TSX: TA, NYSE: TAC) and TransAlta Renewables Inc. (TransAlta Renewables) (TSX: RNW) announced today that TEC Hedland Pty Ltd, a subsidiary of TransAlta, received formal notice of termination of the South Hedland Power Purchase Agreement (PPA) from a subsidiary of Fortescue Metals Group Limited (FMG). The PPA allows FMG to terminate the agreement if the power station has not reached commercial operation within a specified time period. FMG continues to be of the view that the South Hedland Power Station has yet to achieve commercial operation.
TransAlta and TransAlta Renewables remain confident that all conditions required to establish commercial operations, including all performance conditions, have been achieved under the terms of the PPA. These conditions include receiving a commercial operation certificate, successfully completing and passing certain test requirements, and obtaining all permits and approvals required from the North West Interconnected System (NWIS) and government agencies.
Confirmation of commercial operation has been provided by independent engineering firms, as well as by Horizon Power, the state-owned utility. TransAlta and TransAlta Renewables will take all steps necessary to protect their interests in the facility and ensure all cash flows promised under the PPA are realized.
The South Hedland Power Station has been fully operational and able to meet FMG’s requirements under the terms of the PPA since July 2017.
The South Hedland Power Station, located in the Pilbara Region of Western Australia, is a 150 MW combined-cycle natural gas power station that is one of the most efficient power plants in Western Australia, providing low cost electricity to its customers and generating low greenhouse gas emissions.
About TransAlta Corporation:
TransAlta is a power generation and wholesale marketing company focused on creating long-term shareholder value. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta’s focus is to efficiently operate wind, hydro, solar, natural gas and coal facilities in order to provide customers with a reliable, low-cost source of power. For over 100 years, TransAlta has been a responsible operator and a proud contributor to the communities in which it works and lives. TransAlta has been recognized on CDP’s Canadian Climate Disclosure Leadership Index (CDLI), which includes Canada’s top 20 leading companies reporting on climate change, and has been selected by Corporate Knights as one of Canada’s Top 50 Best Corporate Citizens and is recognized globally for its leadership on sustainability and corporate responsibility standards by FTSE4Good.
This news release contains forward looking statements, including statements regarding the business and anticipated financial performance of the Company and TransAlta Renewables that are based on the Company’s and TransAlta Renewable’s current expectations, estimates, projections and assumptions in light of their experience and their perception of historical trends. In some cases, forward-looking statements can be identified by terminology such as plans, expects, proposed, will, anticipates, develop, continue, and similar expressions suggesting future events or future performance. In particular, this news release contains forward-looking statements pertaining to, without limitation, the following: the satisfaction of all conditions to achieving commercial operations under the terms of the PPA; the ability of the South Hedland Power Station to meet all of the requirements of FMG under the terms of the PPA; TransAlta and TransAlta Renewables taking all steps necessary to protect their interests in the South Hedland Power Station and to ensure all cash flows promised under the PPA are realized; and the ability of the South Hedland Power Station to provide low cost electricity and generate low greenhouse gas emissions. These forward-looking statements are not historical facts but reflect the Company’s and TransAlta Renewables current expectations concerning future plans, actions and results. These statements are subject to a number of risks and uncertainties that could cause actual plans, actions and results to differ materially from current expectations including, but not limited to: the outcome of the dispute with FMG; and operational breakdowns, failures, or other disruptions. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company’s and TransAlta Renewables expectations only as of the date of this news release. The Company and TransAlta Renewables disclaim any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
