RNW Shareholders - Frequently Asked Questions

In August 2013, RNW completed its initial public offering providing investors with the opportunity to invest directly in a highly contracted portfolio of clean and renewable power generation facilities. TransAlta initially sold to RNW assets consisting of 28 wind and hydroelectric power generation facilities having an aggregate installed generating capacity of 1,234 MW. Following the initial public offering, TransAlta held approximately 80% of the issued and outstanding common shares of RNW, and through subsequent follow-on offerings reduced its holding to the current level (60% of issued and outstanding common shares of RNW). TransAlta provides management, administrative and operational services to RNW. Since 2013, the strategies of both companies have converged with RNW acquiring natural gas generating facilities, while TransAlta converted certain coal plants to natural gas generating facilities because it elected to shut down its coal units prior to their assumed end of life. Further, in the fall of 2021, TransAlta announced a Clean Electricity Growth Plan that focused on growing TransAlta's contracted and renewable generation assets. As a result, the strategies of both companies have converged. Combining the companies will strengthen TransAlta's portfolio of clean generation assets and enable more focused execution on TransAlta's clean electricity growth goals. The combined company's greater scale and enhanced positioning are expected to drive benefits and unlock value for all shareholders.

The proposed transaction, which will be affected by way of an arrangement under the Canada Business Corporations Act (the "Arrangement") is expected to provide shareholders of the combined company with a single strategy and a clear and compelling opportunity for long-term growth:

• Alignment and Execution of a Single Strategy: The combined company will share a common strategic path to achieve its clean electricity growth objectives and will be more competitive as a single, streamlined, publicly listed entity. The combination will align, clarify and enhance management's strategic focus and efforts in the marketing, development, construction, operation and maintenance of generation assets to serve customers with clean and reliable electricity.
• Accretive Transaction and Attractive Dividend, while Supporting Future Growth: Following the transaction, shareholders of the combined company are expected to benefit from an accretive transaction and receive a sustainable quarterly dividend while ensuring the combined company retains sufficient cash flow for reinvestment in future growth projects.
• Direct Ownership in One of Canada's Largest Independent Power Producers: The combined company will have unified and direct ownership interests in a diversified portfolio of wind, hydro, solar, storage and natural gas generation assets, all backed by an aligned strategy that allows shareholders of the combined company to benefit from future growth.
• Increased Scale, Public Float and Liquidity: The combined company will have a larger market capitalization and is expected to provide stronger access to capital markets while providing increased trading liquidity. The reduced corporate complexity will provide greater transparency and understanding of the combined company's business, which is expected to enable investment in TransAlta's growing clean electricity portfolio.
• Synergies: The combined company will benefit from greater efficiencies and corporate synergies under a single entity. The combined company is expected to have greater capital efficiency to fund growth in a single simplified entity, having a higher retention of cash flows, and the resulting lower corporate and administration costs.

The transaction offers holders of RNW Shares ("RNW Shareholders") a compelling investment proposition and is expected to provide the following benefits:

• Fair Offer Reflecting Attractive Premium: The offer represents an 18.3% premium based on the closing price of RNW Shares on the Toronto Stock Exchange (the "TSX") as of July 10, 2023, and a 13.6% premium relative to RNW's 20-day volume-weighted average price per share on the TSX as of July 10, 2023.
• Clear and Sustainable Path Going Forward: The combined company is expected to be more resilient than RNW as a standalone entity and mitigate near-term risks associated with maintaining RNW's current dividend level given challenges with contract expiries and increased cash taxes. This combined company is expected to have stronger dividend sustainability and payout coverage, and be better positioned to realize growth as compared to RNW as a standalone entity.
• Expanded Pool of Assets: The combined company will hold an expanded pool of assets and have increased business capabilities. RNW Shareholders who elect to receive TransAlta common shares ("TransAlta Shares") as consideration will become owners of TransAlta's high-quality Alberta assets, which total 3.3 GWs in the combined company. It will also provide exposure to TransAlta's energy marketing division, which delivers industry-leading trading capability and market insights, and is expected to generate strong cash flows driving further portfolio diversification.
• Simplified Structure and Synergies: The simplified structure will provide clarity of ownership and enhanced transparency, including through the elimination of tracking shares, which will enhance the investment analysis and decision-making process for investors. The combined company is expected to be able to optimize its use of capital to fund growth more efficiently as compared to RNW as a standalone entity.
• Immediate Exposure to Alberta Electricity Market: RNW Shareholders will benefit from upside due to the current strong power price environment in Alberta and TransAlta's position in the Alberta market to generate significant cash flows through the capabilities and expertise of TransAlta's leading asset optimization team, while continuing to benefit from a strong underlying base of contracted cashflows.
• Enhanced Growth Opportunities: RNW Shareholders who elect to receive TransAlta Shares as consideration will be able to directly participate in the benefits of the combined company including a consolidated development pipeline of 4.3 GWs of clean electricity projects and early-stage investments in new technologies, along with access to business development expertise and innovation capabilities to enhance growth potential that will support capital appreciation.

TransAlta will acquire all of the RNW Shares not already owned, directly or indirectly, by TransAlta. Each RNW Share will be exchanged for $13.00 in cash or 1.0337 TransAlta Shares, at the election of the RNW Shareholders and subject to pro-rationing based on a maximum aggregate number of TransAlta Shares to be issued to RNW Shareholders of 46,441,779 and a maximum aggregate amount of cash of $800 million. This represents a premium of 18.3% to the closing price of RNW Shares on the TSX as of July 10, 2023 and a premium of 13.6% relative to the 20-day volume-weighted average price per RNW Share on the TSX as of July 10, 2023. The consideration is a mix of $800 million of cash and approximately $584 million in TransAlta Shares.

• This transaction is a part of TransAlta's ongoing strategy of value creation, our vision to become a leader in clean electricity, and our commitment to a sustainable future.
• Over the past few years, TransAlta's strategy has largely aligned with that of RNW's strategy, and this alignment means there is no longer a need or value for separate companies.
• When RNW was launched in 2013, renewable electricity assets represented approximately one quarter of TransAlta's portfolio. Since then, the world energy outlook has undergone a fundamental change - and it continues to rapidly evolve. Global efforts to decarbonize are accelerating. Energy transition and the prevention of climate change have become a priority. Corporations are delivering leadership by committing to net zero goals and investors are ramping up clean investments towards a push to net zero.
• Both companies' investment focus and strategies have converged and are competing for similar growth opportunities, in the same capital markets and for similar investors. The reasons for TransAlta and RNW to have independent strategies and separate structures are no longer present.
• Increasingly shareholders and potential investors alike are observing the merging of these objectives and are seeking clarity.
• Given this shift, TransAlta and RNW will be able to better satisfy customers, shareholders and potential investors, as well as more easily achieve ESG targets, as a combined company. The simplified structure offered by the transaction is expected to provide the combined vehicle needed for both companies to pursue growth and value for the benefit of all shareholders.

• A special committee of independent directors of RNW (the "RNW Special Committee") conducted an independent and comprehensive review process and unanimously concluded that the proposed transaction is fair to RNW Shareholders (without consideration to TransAlta and any affiliate thereof) and recommends that the RNW Shareholders vote in favour of the transaction.
• The RNW Special Committee received verbal fairness opinions from National Bank Financial Inc. ("NBF") and TD Securities ("TD"). Both advisors concluded (subject to certain assumptions and qualifications) that the Arrangement is fair, from a financial point of view, to the minority RNW Shareholders, without consideration to TransAlta or any affiliate thereof (the "RNW Opinions"). NBF also provided a formal valuation of the RNW Shares (the "Formal Valuation") that concluded that the fair value of an RNW Share as of July 10, 2023 was in the range of $12.25 and $13.60. After considering, among other things, the recommendation of the RNW Special Committee and its receipt of the RNW Opinions and the Formal Valuation, the Board of Directors of RNW (the "RNW Board")(with four directors who are not independent abstaining) unanimously determined that the Arrangement is in the best interests of RNW and is fair to the RNW Shareholders (without consideration to TransAlta and any affiliate thereof), approved the execution and delivery of the Arrangement Agreement between TransAlta and RNW dated July 10, 2023 (the "Arrangement Agreement") and unanimously recommended that RNW Shareholders vote in favour of the Arrangement.
• RBC Dominion Securities Inc. ("RBC Capital Markets"), acting as financial advisor to TransAlta, provided a verbal opinion, as of July 10, 2023, to the Board of Directors of TransAlta ("The TransAlta Board")(subject to certain assumptions and qualifications) that the consideration to be paid by TransAlta pursuant to the Arrangement is fair from a financial point of view to TransAlta (the "TransAlta Fairness Opinion").
• After considering, among other things, the TransAlta Fairness Opinion, the TransAlta Board determined that the Arrangement is in the best interests of TransAlta and approved the execution and delivery of the Arrangement Agreement.

Following the Arrangement, the pro forma ownership of the combined company will be approximately:

• 85% TransAlta shareholders, and
• 15% RNW Shareholders.

• The Arrangement Agreement provides for, among other things, a non-solicitation covenant of RNW, subject to a customary "fiduciary out" provision that entitles RNW to consider and accept a superior proposal if TransAlta does not match the superior proposal within a five-business day period.
• If the Arrangement Agreement is terminated in certain circumstances, including if RNW enters into an agreement with respect to a superior proposal, TransAlta is entitled to a termination payment of $95.4 million.

• The Arrangement is subject to the approval of TransAlta Renewables shareholders:
  • 66 2/3% of the votes cast by TransAlta Renewables shareholders present in person or by proxy at the special meeting of shareholders, which includes TransAlta, and
  • A majority of the votes cast by RNW Shareholders present in person or by proxy at the special meeting of shareholders that excludes shares that are beneficially owned or controlled by TransAlta or insiders of TransAlta.
• All of the directors of RNW have entered into support agreements with TransAlta pursuant to which they have agreed to vote their respective RNW Shares in favour of the Arrangement at the RNW Meeting. Additionally, TransAlta, holding approximately 60.1% of the RNW Shares, intends to vote its RNW Shares in favour of the Arrangement at the RNW Meeting.

The Arrangement is subject to regulatory approvals, including approval of the Alberta Utilities Commission, interim and final orders of the Court of King's Bench (Alberta), and stock exchange listing approval.

If not approved, TransAlta Renewables will remain a standalone company and TransAlta will continue to own approximately 60% of the outstanding RNW Shares.

The RNW shareholder meeting will be held on September 26, 2023.

The transaction is expected to close in early October 2023.

Please reach out to TransAlta Renewables Investor Relations at:

• Email: Investor_Relations@transalta.com
• Telephone: 1-800-387-3598 Within North America

The Arrangement offers a superior investment proposition and includes the following benefits:

• Fair Offer Reflecting Attractive Premium: The terms offer represents an 18.3% premium based on the closing price of RNW Shares on the TSX as of July 10, 2023, and a 13.6% premium relative to RNW's 20-day volume-weighted average price per share on the TSX as at July 10, 2023.
• Expanded Pool of Assets: The combined company will offer an expanded pool of assets and business capabilities. RNW Shareholders will become owners of TransAlta's high-quality Alberta assets forming part of a generating portfolio of 3.3 GWs. It will also provide to RNW Shareholders exposure to TransAlta's leading energy marketing division, which delivers industry-leading trading capability and market insights, and is expected to generate strong cash flows driving further portfolio diversification.
• Clear and Sustainable Path Going Forward: The combined company is expected to be more resilient than RNW as a standalone entity and mitigate near-term risks associated with contract expiries and increased cash taxes of RNW. The combined company is expected to have stronger dividend sustainability and payout coverage and be better positioned to realize growth as compared to RNW as a standalone entity.
• Simplified Structure and Synergies: The simplified structure provides clarity of ownership and enhanced transparency, including through the elimination of tracking shares, which will enhance the investment analysis and decision-making process for investors. The combined company is expected to be able to optimize its use of capital to fund growth more efficiently as compared to RNW as a standalone entity.
• Immediate Exposure to Alberta Electricity Market: RNW Shareholders will benefit from upside due to the current strong power price environment in Alberta and TransAlta's position in the Alberta market to generate significant cash flows through the capabilities and expertise of TransAlta's leading asset optimization team.
• Enhanced Growth Opportunities: RNW Shareholders will be able to directly participate in a consolidated development pipeline of 4.3 GWs of clean energy projects and early-stage investments in new technologies, along with access to business development expertise and innovation capabilities to enhance growth potential that will support capital appreciation.

No immediate action is required of RNW Shareholders. Further details regarding the Arrangement and voting procedures will be contained in a management information circular (the "Circular") to be sent to RNW Shareholders in connection with the RNW Meeting. The Circular was mailed on August 25, 2023.

Further details regarding the Arrangement will be contained in a management information circular for the RNW Meeting to be sent to RNW Shareholders in connection with the RNW Meeting. The Circular was mailed on August 25, 2023.

The RNW shareholder meeting will permit voting by mail, phone and internet. Further details regarding the Arrangement and voting procedures will be contained in a management information circular for the RNW shareholder meeting to be sent to RNW shareholders in connection with the RNW meeting. The Circular was mailed on August 25, 2023.

• Yes. The board of directors of RNW has declared monthly dividends for July, August and September as set out below.

Dividend Per Share	Record Date	Payment Date
$0.07833	July 14, 2023	July 31, 2023
$0.07833	August 15, 2023	August 31, 2023
$0.07833	September 15, 2023	September 29, 2023

• Any further dividends are at the discretion of the RNW Board.

• The dividend for TransAlta Corporation is $0.22 per share on an annualized basis.
• The dividend is paid quarterly and is currently set at $0.055 per share.

• Dividends are paid quarterly as determined by the TransAlta Board. In determining the level of the dividend, the TransAlta Board assesses the dividend payout as a percentage of earnings and as a percentage of cash flow from operations over a period of time.
• Common share dividends are usually paid on the first of the month in January, April, July and October. When a dividend payment date falls on a weekend or holiday, the payment is made the following business day. Dividends are paid in Canadian dollars.
• Declared dividends and further information are available on TransAlta's website at https://transalta.com/investors/shareholder-information/

No, the terms of the Arrangement Agreement have already been set. Under the terms of the Arrangement Agreement, each RNW Share will be exchanged for, at the election of each RNW Shareholder, either 1.0337 TransAlta Shares or $13.00 in cash, subject to pro rationing based on a maximum aggregate number of TransAlta Shares to be issued to RNW Shareholders of 46,441,779 and a maximum aggregate cash amount of $800 million.

The Plan of Arrangement provides that RNW Shareholders that do not deliver a duly completed election form prior to the RNW Meeting, shall be deemed to have elected to receive TransAlta Shares in respect of all of such holder's RNW Shares, subject to pro rationing based on a maximum aggregate number of TransAlta Shares to be issued to RNW Shareholders of 46,441,779 and a maximum aggregate amount of cash of $800 million.

Information on how to elect your preference for TransAlta Shares or cash will be available in the Circular. A letter of transmittal and election form will accompany the Circular and will need to be completed and returned prior to the date of the RNW Meeting. Further details regarding the Arrangement will be contained in the Circular to be sent to RNW Shareholders in connection with the RNW Meeting. The Circular was mailed on August 25, 2023, and the RNW Meeting will be held on September 26, 2023.

No, you do not need to sell your RNW Shares now that the deal has been announced. RNW Shares will continue to trade on the TSX until the date of closing.

Yes. The Renewables Special Committee has received the NBF Formal Valuation and Fairness Opinion and the TD Fairness Opinion from its financial advisors, NBF and TD, respectively, to the effect that, as of July 10, 2023, based upon and subject to the assumptions, qualifications and limitations set forth therein, the consideration to be paid by TransAlta to the Renewables Shareholders (other than TransAlta and its affiliates) in respect of the Renewables Shares pursuant to the Arrangement is fair, from a financial point of view, to such Renewables Shareholders. NBF also verbally delivered its formal valuation (later confirmed by delivery of a written formal valuation) that, subject to the assumptions and limitations contained therein, the fair market value of a Renewables Share as of July 10, 2023 is in the range of $12.25 and $13.60. See the Circular for more information.

Yes. Each director of Renewables, collectively holding approximately 0.02% of the outstanding Renewables Shares on a non-diluted basis, has entered into a Renewables Lock-up Agreement with TransAlta pursuant to which he or she have agreed, among other things, to vote their Renewables Shares in support of the Arrangement Resolution at the Meeting.

There is no physical location for the Meeting. The Meeting will be held on September 26, 2023 at 10:00 a.m. (Calgary time) in a virtual-only format that will be conducted via live audio webcast accessible at web.lumiagm.com/450755248, password "transalta2023" (case sensitive). Such format will give Renewables Shareholders an equal opportunity to participate in the Meeting online regardless of their geographic location.

Renewables Shareholders may use the Internet to transmit their voting instructions by accessing the website at www.investorvote.com and following the instructions. You will require your 15-digit control number found on your form of proxy. Please note that if Renewables Shareholders vote by Internet, their completed form of proxy and voting instructions must be received before 10:00 a.m. (Calgary time) on September 22, 2023 or, in the case of any adjournment(s) or postponement(s) of the Meeting, not less than 48 hours (excluding Saturdays, Sundays and holidays) prior to the time fixed for the adjourned or postponed Meeting.

• The Meeting will be held in a virtual-only format. Renewables Shareholders will not be able to attend the Meeting in person.
• Registered Renewables Shareholders and duly appointed proxyholders (including beneficial Renewables Shareholders who have duly appointed themselves as proxyholders) who attend the Meeting online will be able to listen to the Meeting, ask questions and vote at the Meeting by completing a ballot that will be made available online during the Meeting, all in real time, provided that they are connected to the Internet at web.lumiagm.com/450755248. Such persons may then enter the Meeting by clicking "Login" and entering a Control Number and, password "transalta2023" (case sensitive) before the start of the Meeting.
• Registered Renewables Shareholders: If you are a registered Renewables Shareholder, the control number located on the form of proxy or in the email notification you received is your Control Number.
• Duly appointed proxyholders: If you are a duly appointed third-party proxyholder, Computershare Investor Services Inc. will provide you with a Control Number by e-mail after the Proxy Deadline has passed and you have been duly appointed as proxyholder AND registered as described in the Circular. Registration of third-party proxyholders as described above is an additional step that must be completed in order for proxyholders to attend and participate at the Meeting. Without a Control Number, proxyholders will not be able to ask questions or vote at the Meeting but will be able to listen as a guest.
• Guests: Guests are welcome to attend the webcast, but will be unable to participate or vote at the Meeting. To join as a guest please visit the Meeting online at web.lumiagm.com/450755248 and select "Join as a Guest" when prompted.
• Non-registered (beneficial) Renewables Shareholders who have not duly appointed themselves as proxyholder will be able to attend the Meeting as a guest but will not be able to vote at the Meeting. This is because Renewables and its transfer agent do not have a record of the non-registered (beneficial) Renewables Shareholders, and, as a result, will have no knowledge of your shareholdings or entitlement to vote, unless you appoint yourself as proxyholder. If you are a non-registered (beneficial) Renewables Shareholder and wish to vote at the Meeting, you have to appoint yourself as proxyholder by inserting your own name in the space provided on the voting instruction form sent to you and must follow all of the applicable instructions provided by your intermediary.

You are a beneficial Renewables Shareholder if your Renewables Shares are registered in the name of an intermediary and your certificate is held with a bank, trust company, securities broker, trustee or other institution. If you are a beneficial Renewables Shareholder, your package includes a voting instruction form. Beneficial Renewables Shareholders should follow carefully the instructions provided in the voting instruction form by using one of the described methods provided to vote their Renewables Shares. The voting instruction form is similar to a form of proxy however it can only instruct the registered Renewables Shareholder how to vote your shares.

As a beneficial Renewables Shareholder, you may:

• Option 1. Vote through your intermediary
  If you wish to vote through your intermediary, follow the instructions on the proxy or voting instruction form provided by your intermediary. Your intermediary is required to ask for your voting instructions before the Meeting. Please contact your intermediary if you did not receive a voting instruction form. Alternatively, you may receive from your intermediary a preauthorized proxy indicating the number of Renewables Shares to be voted, which you should complete, sign, date and return as directed on the proxy.
• Option 2. Vote at the Meeting or by proxy
  Renewables does not have access to the names or holdings of any non-registered Renewables Shareholders. That means you can only vote your Renewables Shares at the Meeting if you have previously appointed yourself as the proxyholder for your Renewables Shares. If you wish to vote at the Meeting, appoint yourself as your proxyholder by writing your own name in the space provided on the proxy or voting instruction form provided by your intermediary AND following the instructions under "General Proxy Matters for Renewables - How to Vote - Voting at the Meeting" in the Circular to register yourself as proxyholder. Do not complete the voting section on the proxy or voting instruction form as your vote will be taken at the Meeting and return the proxy or voting instruction form to your intermediary in the envelope provided. You may also appoint someone else as the proxyholder for your Renewables Shares by printing their name in the space in the proxy or voting instruction form provided by your intermediary, submitting it as directed on the form AND following the instructions under "General Proxy Matters for Renewables – How to Vote – Voting at the Meeting" in the Circular to register that person as your proxyholder. Your vote, or the vote of your proxyholder, will be taken and counted at the Meeting. Your proxyholder must vote your Renewables Shares in accordance with your instructions at the Meeting. Please ensure that the person you appoint is aware that he or she has been appointed and attends the Meeting. If your proxyholder does not attend the Meeting, your Renewables Shares will not be voted.
• Option 3. Vote by telephone or over the Internet
  If you wish to vote by telephone or the Internet, follow the instructions for telephone or the Internet voting on the proxy or voting instruction form provided by your intermediary. Non-registered Renewables Shareholders who do not object to their name being made known to Renewables may be contacted by Kingsdale to assist in conveniently voting their Renewables Shares directly by telephone. Renewables may utilize the Broadridge Investor Communications Solutions QuickVote™ service to assist beneficial Renewables Shareholders with voting their Renewables Shares over the telephone.

If you are a U.S. beneficial Renewables Shareholder and you wish to attend the Meeting and vote your shares, you must follow the instructions on the back of your proxy or voting instruction form to obtain a legal proxy. Once you have received your legal proxy, you will need to submit and deliver it to Renewables or its registrar and transfer agent, Computershare Investor Services Inc., prior to the Proxy Deadline in order to vote your shares.

Proxies must be received before 10:00 a.m. (Calgary time) on September 22, 2023 or, in the case of any adjournment(s) or postponement(s) of the Meeting, not less than 48 hours (excluding Saturdays, Sundays and holidays) prior to the time fixed for the adjourned or postponed Meeting. The time limit for deposit of proxies may be waived or extended by the Chair of the Meeting at his or her discretion, without notice.

Yes. Once you have carefully read and considered the information in the Circular, you need to complete and submit the enclosed form of proxy or voting instruction form, as applicable. You are encouraged to vote well in advance of the Proxy Deadline to ensure that your Renewables Shares are voted at the Meeting.

A broker or other securities intermediary will vote your Renewables shares only if you provide instructions to such intermediary on how to vote. If you fail to provide proper instructions, the Renewables Shares will not be voted on your behalf at the Meeting. If you do not wish to appoint yourself as proxyholder, as a non-registered (beneficial) Renewables Shareholder, you should instruct your intermediary to vote your Renewables Shares on your behalf by following the directions on the voting instruction form provided by such intermediary. Unless your intermediary gives you its proxy to vote at the Meeting, you cannot vote those Renewables Shares owned by you at the Meeting.

• The transfer of an RNW Share to TransAlta for cash consideration under the Arrangement will be a taxable disposition for Canadian income tax purposes. In such circumstances, the RNW Shareholder will generally realize a capital gain (or a capital loss) to the extent the aggregate cash consideration received exceeds (or is less than) the tax cost of the RNW Shares and any reasonable costs of disposition.
• The transfer of an RNW Share to TransAlta for TransAlta Shares under to the Arrangement will be tax-deferred for Canadian income tax purposes. However, in such circumstances an RNW Shareholder may choose to (i) report any portion of the gain or loss realized on the disposition in its Canadian federal income tax return or (ii) make an election under section 85 of the Income Tax Act (Canada) (the "Tax Act") jointly with TransAlta (a "Joint Tax Election").

• An RNW Shareholder making a Joint Tax Election is generally able defer all or a portion of the capital gain that would otherwise arise upon the disposition of the RNW Shares, subject to the limitations set forth in Canada's tax legislation.
• One of the limitations is that the elected amount in the Joint Tax Election cannot be less than the cash consideration received from TransAlta. As a result, where the cash consideration received by an RNW Shareholder is less than the aggregate tax cost of the TransAlta Shares held by the RNW Shareholder, it may be possible for the RNW Shareholder to obtain a tax-deferral on the cash consideration by filing a Joint Tax Election.

A Joint Tax Election may be made by any taxable Canadian RNW Shareholder that receives a combination of cash consideration and TransAlta Shares for their RNW Shares. RNW Shareholders who only receive cash consideration are not eligible to make a Joint Tax Election.

Details regarding the process for making a Joint Tax Election with TransAlta will be included in the Circular that will be provided to RNW Shareholders.

Unless the RNW Shares are "taxable Canadian property" that is not "treaty-protected property" (each as defined in the Tax Act) to a RNW Shareholder, the disposition of such RNW Shares by a RNW Shareholder that is non-resident of Canada for purposes of the Tax Act will not be taxable in Canada.

The disposition of RNW Shares pursuant to the Arrangement by a RNW Shareholder will be taxable for United States federal income tax purposes. Provided that RNW was not classified as a "passive foreign investment company" within the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986, as amended, for any year or period during which a RNW Shareholder has held RNW Shares, such RNW Shareholders will generally realize a taxable gain (or a taxable loss) for U.S. federal income tax purposes to the extent the aggregate of the cash consideration and the fair market value of the TransAlta Shares received exceeds (or is less than) the RNW Shareholder's adjusted tax basis in the RNW Shares that are disposed of pursuant to the Arrangement.