Q1 2024 TransAlta Corp Earnings Call

Carmen: Good morning. My name is Carmen, and I will be your conference operator today. At this time, I would like to welcome everyone to TransAlta Corporation's first quarter 2024 results conference call.

Good morning, My name is Carmen and I'll be your conference operator today at this time I would like to welcome everyone to Transalta Corporation first quarter 2024, we sold <unk> conference call.

Carmen: At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star symbol and the numbers 11 on your telephone keypad. If you would like to withdraw your question, press star 11 again. Thank you. Ms. Valentini, you may begin your conference.

At this time all participants are in a listen only mode. After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star symbol and the numbers one one on your telephone keypad, if people would like to withdraw your question.

Speaker Change: Red Star one one again, thank you Ms. Valentini you may begin your conference.

Chiara Valentini: Thank you, Carmen. Good morning, everyone, and welcome to TransAlta's first quarter 2024 conference call. With me today are John Kousinioris, President and Chief Executive Officer. As well, we have Todd Stack, EVP Finance and Chief Financial Officer, and Blain Van Melle, EVP Commercial and Customer Relations.

Valentini: Thank you Carmen good morning, everyone and welcome to Transalta as first quarter 'twenty 'twenty four conference call.

Valentini: With me today are John cuisine, Yaris, President and Chief Executive Officer.

Valentini: That's why we have bought stock EVP of finance and Chief Financial Officer, and Blaine Badmouth, EVP commercial and customer relations.

Chiara Valentini: Today's call is being webcast, and I invite those listening on the phone lines to view the supporting slides that are posted on our website. A replay of the call will be available later today, and the transcript will be posted to our website shortly thereafter. All the information provided during this conference call is subject to the forward-looking statement qualifications set out here on slide two, detailed further in our MD&A, and incorporated in full for the purposes of today's call.

Valentini: Today's call is being webcast and I invite those listening on the phone lines to the use of supporting slides that are posted on our website.

Valentini: Replay of the call will be available later today and the transcript will be posted to our website. Shortly thereafter.

All the information provided during this conference call is subject to the forward looking statement qualification set out here on slide two.

Valentini: Detailed further in our MD&A and incorporated in bulk for the purposes of today's call.

Valentini: All amounts referenced during the call are in Canadian currency, unless otherwise noted.

Valentini: The non ice breast terminology that we're using including just adjusted EBITDA and free cash flow are also reconciled in the MD&A for your reference.

Chiara Valentini: All amounts referenced during the call are in Canadian currency unless otherwise noted. The non-IFRS terminology that we're using, including just adjusted EBITDA and free cash flow, are also reconciled in the MD&A for your reference. On today's call, John and Todd will provide an overview of the quarterly results, and after these remarks, we will open the call for questions. With that, I will turn the call over to John. Thank you.

Valentini: On today's call, John and Todd will provide an overview of the quarterly results.

Valentini: And after these remarks, we will open the call for questions with that let me turn the call over to Charles.

John Harry Kousinioris: Thank you, Chiara. Good morning, everyone, and thank you for joining our first quarter 2024 conference. As part of our commitment to reconciliation, I want to begin by acknowledging that TransAlta's head office, where we are today, is located in the traditional territories of the peoples of Treaty 7, which include the Blackfoot Confederacy, comprising the Siksika, the Pekani, and the Kainai First Nations, the Tsutina First Nation, and the Stony Nakoda, including the Chi The City of Calgary is also home to Métis Nation of Alberta District 5, and TransAlta had an excellent first quarter, which exceeded our expectations and is strongly in line with our stated outlook for the year.

Charles: Thank you Kara good.

Charles: Everyone and thank you for joining our first quarter 2024 conference call.

Charles: As part of our commitment towards reconciliation I want to begin by acknowledging the trends Altus head office, where we are today is located in the traditional territories of the peoples of the Treaty seven which include a blocked with Qs better receipt, comprising 60 comp to be corny kind of per station, that's a juniper station and stony Nicole.

Charles: Including the cheeky first Paul and good Stony per stations. The city of Calgary is also home to <unk> nation of Alberta districts, five and six.

Charles: Turns out that had an excellent first quarter, which exceeded our expectations and is strongly in line with our stated outlook for the year.

John Harry Kousinioris: We delivered a justification bid of $328 million, free cash flow of $206 million, or $0.67 per share, and net earnings to shareholders of $222 million. Our results stemmed from the strong performance of our merchant fleet, the exceptional efforts of our optimization team, which managed our hedging strategies, and our solid operations with improved fleet availability of 92.3%. We also benefited from higher power prices and guidance, particularly during periods of market tightness in January.

Charles: <unk> delivered adjusted EBITDA of 328 million free.

Free cash flow of $206 million were 67 per share and net earnings to shareholders of $222 million.

Our results stemmed from strong performance of our merchant fleet. The exceptional efforts of our optimization team, which managed our hedging strategies and our solid operations with improved fleet availability of 92, 3%.

Charles: We also benefited from stronger power prices in guidance, particularly during periods of market tightness in January.

John Harry Kousinioris: We continue to perform well in managing the evolving markets of our operating portfolio, and our diversified fleet illustrated its resilience and flexibility by generating excellent results from both merchant and contracted assets. With another quarter of strong cash flow, we continue to maintain a strong balance sheet with over $1.7 billion in liquidity, including $417 million in cash, and are well positioned to deliver on our priorities.

Charles: We continue to perform well in managing the evolving markets of our operating portfolio and our diversified fleet illustrated its resilience and flexibility by generating excellent results from both merchant and contracted assets.

Charles: With another quarter of strong cash flow, we continue to maintain a strong balance sheet with over $1 7 billion in liquidity, including $417 million in cash and are well positioned to deliver on our priorities.

John Harry Kousinioris: In addition to our financial performance, there are a number of updates on our strategic initiatives to share with you. First, I'm pleased to announce that we have largely completed the construction program that underpinned the first phase of our Clean Electricity Growth Plan, which we launched back in 2021. We've achieved commercial operations at our 300 megawatt White Rock East and West wind facilities in Oklahoma, along with the Mount Keith transmission expansion in Australia, and our 200-megawatt Horizon Hills Wind Facility is in the final stages of commissioning and expected to reach commercial operations in the near future. Together, these assets will contribute over $115 million to our company in adjusted EBITDA annually.

Charles: In addition to our financial performance there are a number of updates on our strategic initiatives to share with you. This quarter first I am pleased to announce that we have largely completed the construction program that underpins the first phase of our clean electricity growth plan, which we launched back in 2021.

Charles: We've achieved commercial operations at our 300 megawatt white rock eastern West wind facilities in Oklahoma, along with the Mount Keith transmission expansion in Australia.

And our 200 megawatt Horizon Hills wind facility is in the final stages of commissioning and expected to reach commercial operations in the near future.

Charles: Together these assets will contribute over $115 million to our company and adjusted EBITDA annually with.

John Harry Kousinioris: With the completion of Horizon Hill and White Rock, we will have over one gigawatt of contracted renewables in operation in the United States, providing contracted cash flows to our customers. Next, and as you all know, we recently announced the Chief Financial Officer Succession Plan, and I would like to take a moment to express my own, as well as the Board's, gratitude to Todd Stack for his incredible 34-year career with the company. Todd joined TransAlta as an engineer in our foreign transmission business, had roles in business development, and went on to take greater and greater responsibilities within the company, culminating in his current role as CFO. His contributions to TransAlta are many and have been significant, and are reflective of his values founded on hard work, commitment, and integrity. It was Todd, the very best in his retirement.

Charles: With the completion of horizon human White rock, we will have over one gigawatt of contracted renewables in operation in the United States, providing contracted cash flows to our company.

Next and as you all know, we recently announced the Chief Financial Officer succession plan and would like to take a moment to express my all of them as well as the board's gratitude to Todd stack for his incredible 34 year career with the company.

Charles: Todd joined Transalta, as an engineer and our foreign transmission business had roles in business development and when all undertake greater and greater responsibilities within the company, culminating in his current role as CFO.

His contributions to transalta are many and have been significant and are reflective of his values founded on hard work commitment and integrity.

Speaker Change: Todd the very best in his retirement.

John Harry Kousinioris: As we say farewell to Todd, I'm pleased to be able to do so, as he takes on the role of Chief Financial Officer. Joel will bring over 25 years of experience spanning various areas in the energy sector to our company. His established reputation as a strong collaborative leader will be important as we pursue our strategic objectives. We look forward to you all joining us in July and know that we will benefit from this extensive industry experience and capital markets knowledge.

Speaker Change: As we say farewell to Todd I'm pleased to be here.

Speaker Change: As he takes on the role of Chief Financial Officer.

Speaker Change: Joe will bring over 25 years of experience spanning various areas in the energy sector to our company. He has established reputation as a strong collaborative leader will be important as we pursue our strategic objectives. We look forward to what should you all joining us in July and know that we will benefit from his extensive industry experience in capital markets.

John Harry Kousinioris: And finally, during the quarter, there were a number of regulatory changes and announcements made by the Government of Alberta, which I will now address both substantively and in the context of the impact we expect them to have on our business moving forward. The Alberta government recently announced changes in three key areas that will affect the Alberta electricity market in the near term and the long term. First, the government introduced new requirements for renewable projects and the power plant regulatory approval process.

Speaker Change: Yes.

Speaker Change: And finally during the quarter there were a number of regulatory changes and announcements made by the government of Alberta, which I will now address both substantially and in the context of the impact we expect them to have on our business moving forward.

John Harry Kousinioris: Overall, these requirements will place additional constraints on where new projects can be physically sited, require developers to have greater financial resources to secure future reclamation obligations, and grant standing to additional stakeholders in regulatory proceedings. These regulatory outcomes were all as we expected.

Speaker Change: The government of Alberta recently announced changes in three key areas that will affect the Alberta electricity market in the near term and the long term.

John Harry Kousinioris: Second, the government announced two interim regulations, the Market Power Mitigation Regulation and the Supply Cushion Regulation. They provide new near-term rules around offer behavior and fleet availability, respectively, and will take effect on July 1, 2024. Third, the Minister of Affordability and Utilities directed the Alberta Electric System Operator and the Market Surveillance Administrator to commence work for the design and implementation of a restructured energy market. The design is to be finalized by the end of 2025, with implementation to occur in 2026, an aggressive timeline from our perspective.

Speaker Change: The government introduced new requirements for renewable projects in power plant regulatory approval process.

Speaker Change: Overall these requirements will place additional constraints on brand new projects can be physically sided require developers to have greater financial resources to secure future reclamation obligations and grandstanding two additional stakeholders in regulatory proceedings. These regulatory outcomes will all we're all as we expected.

John Harry Kousinioris: The interim regulations will expire on November 30, 2027, at which time the restructured energy market is expected to be fully implemented. The interim market power mitigation and the supply cushion regulations provide new market mechanisms, ostensibly aimed at enhancing the affordability and reliability of Alberta's power supply. The Market Power Mitigation Regulation applies an offer price limit set at a value equal to the greater of $125 per megawatt hour or 25 times the day ahead national gas price, triggered, when the hypothetical reference generating facility would earn the equivalent of two months of prescribed net revenues. When the offer limit is triggered, it's applied for the remainder of the calendar month, and then it resets at the beginning of the next month.

Speaker Change: Second the government announced two interim regulations, the market power mitigation regulation and the supply cushion regulation.

Speaker Change: They provide new near term rules around also behavior and fleet availability, respectively and will take effect on July one 2024.

Speaker Change: Third the minister of affordability and utilities directed the Alberta electric system, operator, and the market surveillance administrator to commence work for the design and implementation of a restructured energy market.

The design is to be finalized by the end of 2025 with implementation to occur in 2026, an aggressive timeline from our perspective.

Speaker Change: The interim regulations will expire on November 30 of 2027 at which time, we've restructured energy market is expected to be fully implement.

Speaker Change: The interim market power mitigation and the supply cushion regulations provide new market mechanisms extensively aimed at enhancing the affordability and reliability of Alberta power work.

Speaker Change: Our concurrent litigation regulation applies an offer price limit set at a value equal to the greater of $125 per megawatt hour, where 25 times. The day ahead natural gas price.

It's triggered when a hypothetical referenced generating facility, but earn the equivalent of two months of prescribed net revenues on the offer limited triggered it's applied for the remainder of the calendar month and then it resets at the beginning of next.

John Harry Kousinioris: The offer price limit does not apply to market participants with offer control below five of Generating Capacity in Alberta, to Renewable Energy Resources, or to Energy Storage Resources. Although TransAlta will be caught by the offer price limit, our hydro, wind, and battery assets will be excluded from the offer price limit regime. These facilities continue to retain full pricing discretion within the market. It's also important to note that the offer price limit is not the same as the clearing price.

Speaker Change: The offer price limit does not apply to market participants with Arbor control below 5% of generating capacity in Alberta to renewable energy resources Orange energy storage resource.

Speaker Change: Although transalta will be caught by the off price limit our hydro wind and battery assets will be excluded from the offer price limit regime. These facilities continue to retain full pricing discretion within the market.

Speaker Change: It's also important to note that the offer price limit is not the same as the clearing.

John Harry Kousinioris: The market clearing price will continue to depend on the system marginal price based on merit order, including offer prices bid by generators or facilities that are not constrained by the regulations. We have assessed the proposed market power mechanisms and mitigation mechanism and do not expect it to significantly impact our company. We believe market prices will continue to be set primarily by bidding behavior driven by pre-existing supply and demand fundamentals in the province of Alberta, which is reflected in the weaker pricing conditions we expect over the period that the regulations will be in place. The second interim regulation is the Supply Cushion Regulation, which will require the ISO to direct generators online that require one hour or more to synchronize to the grid.

Speaker Change: The market clearing price will continue to depend on the system marginal price based on merit order, including offer prices, but by generators or facilities that are not constrained by the regulation.

Speaker Change: We have assessed the proposed market power mechanisms and mitigation mechanisms and do not expect it to significantly impact our company.

Speaker Change: We believe market prices will continue to be set primarily by bidding behavior, driven by preexisting supply and demand fundamentals in the province of Alberta, which are reflected in the weaker pricing conditions, we expect over the period that the regulations will be in place.

John Harry Kousinioris: Specifically, the ASO is required to forecast and erect long-lead time generation into service when the supply cushion is expected to be equal to or less than 932 megawatts. Generation directed into service will receive a cost guarantee to cover startup and variable costs. If the pool price revenues are not sufficient to compensate, Although the impacts of this regulation are still unclear, given the lack of any details around the proposed mechanism, once again, our current expectation is that the market pricing dynamics under the supply cushion regulation will largely be as they are today when the market is expected to be tight and short on supply.

Speaker Change: The second interim regulation of the supply cushion regulation, which will require the ISO to direct generators online that require one hour or more synchronized to the grid.

Speaker Change: Specifically the Asa was required to forecast indirect long lead time generation into service when the supply cushion is expected to be equal to or less than 932 megawatts.

Speaker Change: Generation directed into service, we will receive a cost guarantee to cover startup and variable costs. If the pool price revenues are not sufficient to compensate.

Although the impacts of Dysregulation youre still unclear given the lack of any details around the proposed mechanism. Once again, our current expectation is that the market pricing dynamics under the supply Christian regulation will largely be as they are today when the market is expected to be tight and short on supply.

John Harry Kousinioris: In such circumstances, long-lead time assets, such as our coal to gas units, will already be planning to start up and run to supply electricity to the grid, given the economic incentive to do so. Finally, the Government of Alberta announced that it would be restructuring the Energy Only Mark.

In such circumstances long lead time assets, such as our coal to gas units will already be planning to start up and run to supply electricity to the grid given the economic incentive to do so.

Speaker Change: Finally, the government of Alberta announced that it would be restructuring the energy only market.

John Harry Kousinioris: While specifics have yet to be determined, the restructuring is intended to result in stronger incentives for dispatchable generation and to provide long-term signals for investment to promote grid reliability within the province. The restructured energy market is expected to include the introduction of a day ahead market, an administrative scarcity pricing mechanism, the allowance of negative pricing alongside a higher price cap, and the reduction of settlement windows from one hour to 15 or five minutes. TransAlta has actually advocated for and supports a number of these market reforms.

Speaker Change: Specifics of yet to be determined the restructuring is intended to result in stronger incentives for dispatch will generation and to provide long term signals for investment to promote grid reliability within the products.

Speaker Change: Our restructured energy market is expected to include the introduction of a day head market and administrative scarcity pricing mechanism the allowance of negative pricing alongside a higher price gap and the reduction of settlement windows from one hour to 15 or five minutes.

Speaker Change: Turns out that has actually advocated for and supports a number of these market reforms, we share the government's view that a market redesign as necessary and look forward to working with the ISO and the government to develop a framework that delivers reliable and affordable electricity for Albert at the same time, the new market needs to enable companies to invest.

John Harry Kousinioris: We share the government's view that a market redesign is necessary and look forward to working with the ISO and the government to develop a framework that delivers reliable and affordable electricity for Albertans. At the same time, the new market needs to enable companies to invest in projects and technologies that will be needed in the future with appropriate risk-adjusted returns on their investment. The market would also need to find ways to better incentivize reliability services to address the issue of increasing generation intermittency.

Speaker Change: And projects and technologies that will be needed in the future with appropriate risk adjusted returns on their investments.

Speaker Change: The market would also need to find ways to better incentivize reliability services to address the issue of increasing generation Intermittency. We have the assets that can fulfill this reliability need but require a market construct the values and incentive such services.

John Harry Kousinioris: We have the assets that can fulfill this reliability need but require a market constructed values to incentivize such services. We're hopeful that through the consultation process, the right parameters will be put in place to ensure strong future development opportunities for all forms of generation required to achieve a net zero grid. We will continue to be actively engaged in the industry working group and stakeholder process and are confident that the Government of Alberta wants to retain an investor-owned, energy-only market.

Speaker Change: We're hopeful that through the consultation process the right parameters will be put in place to ensure strong future development opportunities for all forms of generation required to achieve net zero grid.

Speaker Change: We will continue to be actively engaged in the industry working group and stakeholder processes and are confident that the government of Alberta wants to retain an investor owned energy only market.

John Harry Kousinioris: As we take stock of the Government of Alberta's regulatory announcements, we've reassessed our own growth plans in the province. Our 300-MW Ripplinger Wind Project has been impacted by the new restrictions on development near protected areas and pristine viewscapes and will not be advisable, so it has been removed from our growth. Also, due to the near-term uncertainty stemming from the forthcoming market redesign, we've decided to pause the development of three advanced stage greenfield projects. Our 180 megawatt water charger, 100 megawatt tempest, and 44 megawatt pinnacle project.

Speaker Change: As we take stock of the government of Alberta is regulatory announcements, we've reassessed their own growth plans in the province.

Speaker Change: Our 300 megawatt Ripplinger wind project has been impacted by the new restrictions on development near protected areas and Christine views Capes and will not be advanced the project has been removed from our growth pipeline.

Speaker Change: So due to the near term uncertainty stemming from the forthcoming market redesign we've decided to pause the development of three advanced stage Greenfield projects are 180 megawatt water Charger 100 megawatt Tempest and 44 megawatt clinical projects.

John Harry Kousinioris: These projects all have varying degrees of merchant market exposure and have been put on hold until we receive sufficient clarity regarding the future market structure and the impact of changing frameworks on resulting market prices. We want to ensure that market changes will not impact our investment thesis on these projects before we proceed, so we have pushed out financial investment decisions until at least 2026, as we work to better understand the impact of the evolving market. That's it.

Speaker Change: These projects all have varying degrees of merchant market exposure and have been put on hold until we received sufficient clarity regarding the future market structure and the impact of changing framework sudden resulting market prices, we want to ensure that market changes will not impact our investment thesis on these projects before we proceed and it pushed out.

Speaker Change: Financial investment decisions until at least 2026, as we work to better understand the impact of the evolving market.

John Harry Kousinioris: We continue to have a robust pipeline of approximately 5 gigawatts distributed among Canada, the United States, and Western Australia. We will allocate development efforts and capital to markets that bring geographic diversity, market stability, and strong returns. In the near to medium term, we will be focusing on organic growth projects that have limited merchant exposure in Alberta, as well as sites that are located in the United States and Western Australia. We won't grow simply for the sake of meeting targets.

Speaker Change: That said.

Speaker Change: We continue to have a robust pipeline of approximately five gigawatts distributed about Canada, the United States and Western Australia.

Speaker Change: We will allocate development efforts and capital to markets, which brings geographic diversity market stability and strong returns in the near to medium term, we will be focusing on organic growth projects that have limited merchant exposure in Alberta as well as sites that are located in the United States and Western Australia.

It won't grow simply for the sake of making targets long term shareholder value creation. We will provide we will continue to ultimately drive our capital allocation decisions.

John Harry Kousinioris: Long-term shareholder value creation will continue to ultimately drive our capital allocation. With the recent regulatory changes in Alberta, we've also reassessed our proposed Heartland Generation Act. We continue to see benefits in acquiring Heartland and continue to work on advancing the transaction through the regulatory review process with the Competition Bureau. The Heartland acquisition will serve to enhance our generation capabilities to meet the opportunities and challenges of the energy transition in Alberta, which have not fundamentally changed with the market changes being advanced by the government.

Speaker Change: With the recent regulatory changes in Alberta, We've also reassessed our proposed Heartland generation acquisition, we continue to see benefits of acquiring heartland and continue to work on advancing the transaction through the regulatory review process with the competition Bureau.

Speaker Change: Armand acquisition will serve to enhance our generation capabilities to meet the opportunities and challenges of the energy transition in Alberta, which have not fundamentally changed with the market changes being our best by the government.

John Harry Kousinioris: The market will still require low cost, highly flexible, and fast responding generation, which will be supportive of grid reliability over the coming year. We've seen multiple grid alerts since the beginning of 2024, where Heartland's assets have been supportive in providing reliability, illustrating their potential value as part of our portfolio. And we expect the interim regulations to have a modest impact on the economics of the proposed transit. Heartland's assets, acquired at a cost significantly lower than U-Build, will support our competitive positioning in response to the changing market dynamics, and through the highly contracted revenues of the Heartland portfolio, add diversification and stability to our cash flow profile.

Speaker Change: The market will still require low cost highly flexible and fast responding generation, which would be supportive of grid reliability over the coming years.

Speaker Change: We've seen multiple grid alert since the beginning of 2024, where heartlands assets were supportive and providing reliability illustrating their potential value as part of our portfolio and we expect the interim regulations to have a modest impact on the economics of the proposed transaction.

Heartlands assets acquired at a cost significantly lower the Newbuild will support our competitive positioning in response to the changing market dynamics and through the highly contracted revenues to the heartland portfolio as diversification and stability to our cash flow profile.

John Harry Kousinioris: We also remind everyone that the purchase agreement provides that the economic benefits of the portfolio arising after October 31, 2023, accrue to the account of TransAlta, and Partners' performance over the past several months will result in a favorable purchase price adjustment for TransAlta. Todd will now provide more details on the

Speaker Change: We also remind everyone that the purchase agreement provides that the economic benefits of the portfolio rising after October 31, 2023 accrue to the account of Transalta.

Speaker Change: <unk> performance over the past several months will result in a favorable purchase price adjustment for Transalta Todd.

Speaker Change: Todd will now provide more details on the quarter.

Todd John Stack: Thank you, John, and good morning, everyone. Let me start my comments this morning with a discussion of our Alberta portfolio and how it performed during the first quarter of 2024. For the quarter, we continue to realize higher than average merchant spot power prices for energy on our hydro and gas fleet, and we effectively optimized our capacity and ancillary services across the fleet. The spot price for the first quarter averaged $99 per megawatt hour, which, as we expected, was significantly lower than the average price of $142 for the first quarter of 2023. Weather conditions in Q1 were relatively mild compared to the first quarter of 2023, which had multiple periods of extremely cold weather.

Todd: Thank you John and good morning, everyone let.

Todd: Let me start my comments this morning with a discussion.

Todd John Stack: In Q1, our hydro fleet in Alberta continued to significantly outperform with an average realized price of $152 per megawatt hour, a notable 53% premium to the spot price. Our gas fleet in Alberta also exceeded expectations. Operating with strong availability and capturing peak pricing throughout the quarter of $118 per megawatt hour, which was 19% above the spot price. In the quarter, the gas fleet in Alberta also benefited from higher production levels during peak pricing, as well as higher priced power hedges, which partially offset the impact of lower Albertan spot prices. Our merchant wind fleet realized an average price of $51 per megawatt hour, which was in line with our expectations.

Todd: On our Alberta portfolio and how it performed during the first quarter of 'twenty 'twenty four for.

Todd: For the quarter, we continued to realize higher higher than average merchant spot power pricing for energy on our hydro and gas fleet, and we effectively optimized our capacity and ancillary services across the fleet.

Todd: The spot price for the first quarter averaged $99 per megawatt hour, which as we expected was significantly lower than the average price of $142 for the first quarter of 2023.

Todd: Other conditions in Q1 were relatively mild compared to the first quarter of 2023, which had multiple periods of extremely cold weather.

Todd: In Q1, our hydro fleet in Alberta continued to significantly outperform with an average realized price of $152 per megawatt hour a notable 53% premium to the spot price.

Todd: Our gas fleet in Alberta also exceeded expectations operating with strong availability and capturing peak pricing throughout the quarter of $118 per megawatt hour, which was 19% above the spot price.

In the quarter to gas fleet in Alberta also benefited from higher production levels during peak pricing as well as higher price power hedges, which partially offset the impact of lower Alberta spot pricing.

Our merchant wind fleet realized an average price of $51 per megawatt hour, which was in line with our expectations.

Todd John Stack: In addition to strong realized spot prices, our hedging program was able to further mitigate the impact of the extended periods of lower power prices experienced in the quarter. During Q1, we had hedged production of 1900 gigawatt hours at an average price of $88. Looking at the balance of the year, we have approximately 6,400 gigawatt hours of gas generation hedged in Alberta at an average price of $85. And we've hedged roughly 64% of our required natural gas volumes at an average price of $2.80 per gigawatt hour.

Todd: In addition to strong realized spot pricing our hedging program was able to further mitigate the impact of the extended periods of lower power prices experienced in the quarter. During Q1, we had hedged production of 1900 gigawatt hours at an average price of $88.

Todd: Looking at the balance of the year, we have approximately 6400 gigawatt hours of gas generation hedged in Alberta at an average price of $85 and we've hedged roughly 64% of our group's acquired natural gas volumes at an average price of $2 80 per GJ.

Todd John Stack: We're comfortable with our current natural gas hedge level and believe natural gas prices in Alberta will remain soft for the balance of the year due to significant supply and storage levels. Gas prices through the end of the year are projected to be below $2 per GJ, which will provide the opportunity for higher margins from the gas. For 2025 and 2026, our team has hedged production at an average price of $80 per megawatt hour, which is above the current forward curve levels for both years. We will continue to lock in opportunistic hedges to secure cash flow and limit the downside impact of lower power prices in the next two years.

Todd: We're comfortable with our current natural gas hedge level I believe natural gas prices in Alberta will remain soft for the balance of the year due to significant supply and storage levels.

Todd: Gas prices through the end of the year are projected to be below $2 per GJ, which will provide the opportunity for higher margins from the gasket.

For 2025 and 2026, our team has had hedged production at an average price of $8 per megawatt hour, which is above the current forward curve levels for both years, we will continue to lock in opportunistic hedges to secure cash flow and limit the downside impact of lower power prices in the next two years.

Todd John Stack: These hedges are supportive of cash flows in future years and provide a base for our Alberta fleet. Based on our hedge levels and our price outlook for 2025, our early estimates have cash flows for 2025, which are broadly in line with our 2024 free cash flow outlook. Looking at the first quarter, we had very strong results, which were led by our hydro and gas segments, and we're extremely pleased with how the portfolio performed.

These hedges are supportive of cash flows in future years and provide a base for our Alberta fleet.

Todd: Based on our hedge levels and our price outlook for 2025.

Todd: Early estimates of cash flows for 2025, which are broadly in line with our 2020 for free cash flow outlook.

Todd: Looking at the first quarter, we had very strong results, which were led by our hydro and gas segments and we're extremely pleased with how the portfolio performed.

Todd John Stack: As we predicted through our forecasts, we were fully expecting that the year-over-year performance across all of our merchant assets would be impacted by lower Alberta Power Bill revenues. In the quarter, the gas segment delivered adjusted EBITDA of $134 million.

Todd: As we predicted through our forecast we were fully expecting that the year over year performance across all of our merchant assets would be impacted by lower Alberta power prices.

Todd: In the quarter the gas segment delivered adjusted EBITDA of $134 million.

Todd John Stack: Strong performance was driven by high availability, strong production, and higher realized prices from merchant sales and our hedging activity. Adjusted EBITDA Hydro delivered a stronger than expected contribution of $87 million. Given the strong performance in the first quarter, the hydro segment is tracking towards adjusted EBITDA for the full year 2024 of $250 to $300 million. The energy transition segment delivered $26 million of adjusted EBITDA, which decreased year over year due to outages at Centralia and increased economic dispatch as a result of lower market prices. The Wind and Solar Segment delivered EBITDA of $89 million.

Strong performance was driven by high availability strong production and higher realized prices from merchant sales in our hedging activities.

Todd: Adjusted EBITDA is hydro delivered a stronger than expected contribution of $87 million.

Given the strong performance in the first quarter. The hydro segment is tracking towards adjusted EBITDA for the full year 2024 up $250 million to $300 million.

The energy transition segment delivered $26 million of adjusted EBITDA, which decreased year over year due to outages outages at Centralia and increased economic dispatch as a result of lower market prices.

Todd: The wind and solar segment delivered EBITDA of $89 million.

Todd John Stack: While results were in line with our performance from last year, they were below our expectations for the quarter, and we expect to see a stronger contribution in Q2. In Q1, the segment benefited from the addition of Garden Plain, Northern Goldfield Solar, and the return to service of Kent Hills. However, the segment was impacted by lower realized prices and lower wind resources from the Alberta fleet.

Todd: While results were in line with or without.

With our performance from last year, they were below our expectations for the quarter and we expect to see a stronger contribution in Q2.

Todd: In Q1 the segment benefited from the addition of garden plane, Northern Goldfield solar and the return to service of Kent Hills. However, the segment was impacted by lower realized prices and lower wind resource from the Alberta fleet.

Todd John Stack: In Q2, the segment will benefit from contributions from the new White Rock and Horizon Hill Wing. And finally, our energy marketing segment delivered adjusted EBITDA of $20 million, which was significant, but which was slightly below expectations and primarily due to lower realized trades during the quarter in comparison to the prior year. Energy marketing results remain within our gross margin guidance for 2024, and we expect more trades to settle in the coming year in the coming quarter. Overall, the first quarter of 2024 was strong, delivering free cash flow of $206 million, or $0.67 per share, which by itself is approximately 40% of the midpoint of our 2024 guidance of $525 million.

Todd: Q2, the segment will benefit from contributions from the new White rock and horizon facilities.

And finally, our energy marketing segment delivered adjusted EBITDA of $20 million, which was significant which was slightly below expectation and primarily due to lower realized trades during the quarter in comparison to the prior year energy marketing results remained within our gross margin guidance for 2024, and we expect more trades to settle in the coming in the coming quarters.

Overall, the first quarter of 2024 was strong delivering free cash flow of $206 million or 67 per share, which by itself is approximately 40% of the midpoint of our 2024 guidance of $525 million.

Todd John Stack: Focusing on hydro, our hydro assets continue to see strong realized prices and production during peak hours, demonstrated by the significant outperformance to spot prices in the quarter. We continue to see strength through the balance of the year and are confident in the long-term trends of the fleet. Energy production and ancillary service volumes remain largely consistent on a quarter over quarter basis with modest changes in production that average out over time. This provides long-term predictability and a floor to cash flows that is unique to this asset class. TransAlta has been managing the hydro system in Alberta for over 100 years.

Todd: Focusing on hydro our hydro assets continued to see strong realized pricing and production during peak hours demonstrated by the significant outperformance to spot price in the quarter. We continue to see strength of the balance of the year and our confidence in the long term trends of the fleet.

Todd: Energy production and ancillary service volumes remained largely consistent on a quarter over quarter basis with modest changes in production that average out over time.

Todd: This provides long term predictability in our Florida cash flows that is unique to this asset class.

I have been managing the hydro system in Alberta for over 100 years every year, we balanced billing reservoirs with water is available maintaining acceptable minimum flows throughout the year and optimizing generation and then celery services around water availability and.

Todd John Stack: Every year, we balance filling reservoirs when water is available, maintaining acceptable minimum flows throughout the year, and optimizing generation and ancillary services around water availability. In 2024, we're expecting our water levels in Alberta to be in line with what we saw in 2023. Both snowpack and rainfall provide significant contributions to reservoir levels, and we are just entering the rainy season here in Alberta. Currently, we remain confident in the fleet's ability to realize its long-term average production levels.

Todd: In 2024, we are expecting our water levels in Alberta to be in line with what we saw in 2023 <unk>.

Todd: Ill Snowpack and rainfall provides significant contributions to reservoir levels and we are just entering into the rainy season here in Alberta.

Todd: Currently we remain confident in the fleet's ability to realize its long term average production levels.

Todd John Stack: Real-life pricing in hydro continues to be strong, with a premium to spot electricity prices averaging roughly 28% over the last three years, and ancillary services earning an average of 50% of the spot prices. Looking forward, we expect the segment to continue to receive a premium to spot prices and perform within our 2024 guidance expectation. I will now pass it back to John to discuss our 2024 guidance and balance of year priorities.

Realized pricing and hydro continues to be strong with a premium to spot electricity prices, averaging roughly 28% over the last three years and with ancillary services, earning an average of 50% spot prices.

Todd: Looking forward, we expect the segment to continue to receive a premium to spot pricing and performed within our 2024 guidance expectations.

I will now pass it back to John to discuss our 2020 for guidance and balance of your priorities.

John Harry Kousinioris: Thanks, Todd. Looking at full year 2024, we continue to be confident that we will meet our guidelines. Our results in the first quarter show the value of our optimization and hedging strategies and diversified fleet. We have prepared extensively for weakening market conditions in Alberta. First, we have a relatively high hedge position, which was also reflected in our first quarter results. Hedges have been executed both financially and through our commercial and industrial business, and they mitigate the downside impact of the significant new gas-fired supply additions and evolving market conditions. We have hedge positions that are above current forward prices and have secured attractive hedge positions for 2025 and 2026. Additionally, we expect the impact of the interim regulations in Alberta to be muted.

John Harry Kousinioris: Thanks, Todd looking at full year 2024, we continue to be confident that we will meet our guidance our results in the first quarter showed the value of our optimization and hedging strategies and diversified fleet.

John Harry Kousinioris: We are prepared extensively for weakening market conditions in Alberta.

John Harry Kousinioris: We have a relatively high hedge position, which was also reflected in our first quarter results hedges have been executed both financially and through our commercial and industrial business and mitigate the downside impact of a significant new gas fired supply additions and evolving market conditions, we have hedged positions that are above current forward.

John Harry Kousinioris: Prices and a secured attractive hedge positions for 2025 and 2026.

John Harry Kousinioris: We expect the impact of the interim regulations in Alberta to be muted on our company.

John Harry Kousinioris: Third, we're confident in the ability of our hydro fleet to deliver strong results, which it has shown so far this year. And finally, our outlook includes the adjusted EBITDA contributions for the year from the Mount Keith Transmission Project in Australia, as well as the recently commissioned White Rock East and West and soon to be commissioned Horizon Hill facilities in Oklahoma. The contribution from assets to our guidance is significant, and they provide long-term, predictable, contracted cash.

Third we are confident in the ability of our hydro fleet to deliver strong results, which had has shown so far this year and finally, our outlook includes the adjusted EBITDA contributions for the year from the mouth, Keith transmission project in Australia as well as the recently commissioned white rock eastern West and soon to be commissioned horizons built facilities.

John Harry Kousinioris: In Oklahoma the <unk>.

Contribution from assets to our guidance is significant and they provide long term predictable contracted cash flows.

John Harry Kousinioris: We have commenced our preparations for 2025, both from an operating and optimization perspective. Based on our early look at work, we currently expect our results in 2025 to be broadly in line with our results in 2024.

John Harry Kousinioris: We have commenced our preparations for 2025, both from an operating and optimization perspective based on our early look work. We currently expect our results in 2025 to be broadly in line with our results in 2024, we're confident in our assets and our employees capabilities to deliver.

John Harry Kousinioris: We're confident in our assets and our employees' abilities to deliver. Considering the changes to our growth plan and the affirmation of our guidance, we remain committed to our capital allocation priorities and returning value to our shareholders. We continue to believe our Enhanced Common Share repurchase program for 2024 of up to $150 million is an appropriate use of free cash flow to return capital to our shareholders. We were very active in the market through the first four months of the year and, year-to-date, have returned $53 million, or approximately 35% of our 2024 target, resulting in a reduction of almost $6 million in our common share.

John Harry Kousinioris: Considering the changes to our growth plan and the affirmation of our guidance, we remain committed to our capital allocation priorities and returning value to our shareholders. We continue to believe our enhanced common share repurchase program for 2024 of up to $150 million is an appropriate use of free cash flow to return capital to our shareholders.

John Harry Kousinioris: We were very active in the market through the first four months of the year and year to date have returned $53 million or approximately 35% over 2024 target, resulting in a reduction of almost $6 million of our common shares and.

John Harry Kousinioris: In fact, since January of last year, we've completed 140 million in share buybacks, resulting in the repurchase of over 13 million common shares. We will be renewing our normal course issuer bid later this month and will continue to repurchase shares given our current share price, which we believe to be undervalued.

John Harry Kousinioris: In fact since January of last year, we've completed $140 million in share buybacks, resulting in the repurchase of over 13 million common shares.

John Harry Kousinioris: We will be renewing our normal course issuer bid later this month and will continue to repurchase shares given our current share price, which we believe to be undervalued.

John Harry Kousinioris: We believe our shared purchase plan is an appropriate and balanced use of our capital. Our liquidity still permits us to pursue opportunistic growth with returns that meet our strict thresholds while maintaining our balance sheet strength and resilience. With that in mind, I'd like to update you on where we are with our 2024 priorities. As I look at our remaining strategic priorities for 2024, we're focused on progressing the following key goals. First, improving our leading and lagging safety performance while achieving strong fleet availability of 93.1%.

John Harry Kousinioris: We believe our share repurchase plan as an appropriate and balanced use of our capital our liquidity still permits us to pursue opportunistic growth with returns that meet our strict thresholds while maintaining our.

John Harry Kousinioris: Our balance sheet strength and resilience.

John Harry Kousinioris: Achieving EBITDA and free cash flow within our guidance. Proceeding with our Enhanced Common Share Repurchase Program for 2024 and advancing our ESG program. We also look forward to closing and integrating the Heartland Generation transaction, subject to the satisfactory review of the transaction by the Competition Bureau. On this slide, you will notice that there is a box around our 2024 growth. We remind everyone that this target is aspirational, as we will continue to be prudent and disciplined in our growth plan. Given that we have paused over 300 megawatts of advanced stage projects in Alberta, we do not expect to reach our 400 megawatt growth target from our green fuel development program in 2024.

Speaker Change: I'd like to update you on where we are with our 2024 priorities as I look at our remaining strategic priorities for 2024, we're focused on progressing the following key goals.

Speaker Change: Improving our leading and lagging safety performance, while achieving strong fleet availability of 93, 1%.

Speaker Change: Keeping EBITDA and free cash flow within our guidance ranges proceeding with our enhanced common share repurchase program for 2024 and advancing our ESG programs.

We also look forward to closing and integrating heartland generation transaction subject to the satisfactory review of the transaction by the competition Bureau.

Speaker Change: On this slide you will notice that there is a box around our 2024 growth target.

Speaker Change: We remind everyone that this target was aspirational as we will continue to be prudent and disciplined in our growth plan.

Speaker Change: Even though we have paused over 300 megawatts of advanced stage projects in Alberta, we do not expect to reach our 400 megawatt growth target from our Greenfield development program in 2020 for.

John Harry Kousinioris: Our growth team will turn their attention to our development pipeline to advance high-quality and attractive return projects in other regions. Our return thresholds continue to be strict, and we will continue to aggressively repurchase shares, as that is where we are currently seeing the best value for our shareholders. Our Clean Electricity Growth Plan targets extend to 2028, and we will be patient in deploying capital and will balance what is best for our shareholders in both the near and long term.

Our growth team will turn their attention to our development pipeline to advance high quality and attractive return projects in other regions.

Speaker Change: Our return thresholds continued to be strict and we will continue to aggressively repurchase shares as that is where we are currently seeing the best value for our shareholders. Our clean electricity growth plan targets extend to 2028, and we will be patient in deploying capital and we will balance what is best for our shareholders in both the near and long term.

John Harry Kousinioris: I'd like to close by highlighting what I think makes TransAlta a highly attractive investment and a great value opportunity. First, our cash flows are strong and underpinned by a growing, high-quality, and diversified portfolio. Our business is driven by our unique, reliable, and perpetual hydro portfolio, our contracted wind and solar portfolio, and our efficient gas portfolio, all of which are complemented by our world-class asset optimization and energy marketing capabilities. Secondly, we're a clean electricity leader with a focus on tangible greenhouse gas emissions reduction.

Speaker Change: I'd like to close by highlighting what I think makes transalta, a highly attractive investment and a great value opportunity first our cash flows are strong and underpinned by a growing high quality and diversified portfolio. Our business is driven by our unique reliable and perpetual hydro portfolio, our contracted wind and solar.

Speaker Change: Palio and our efficient gas portfolio, all of which are complemented by our world class asset optimization and energy marketing capabilities.

Speaker Change: We are clean electricity leader with a focus on tangible greenhouse gas emissions reductions we remain on track to achieve our ambitious cotwo emissions reduction targets and remain committed to net zero by 2045.

John Harry Kousinioris: We remain on track to achieve our ambitious CO2 emissions reduction targets and remain committed to net zero by 2045. Third, we have a diversified development pipeline and a talented development team focused on realizing its value. And fourth, our company has a sound financial foundation, our balance sheet is strong, and we have ample liquidity to return cash flow to our shareholders, to fund share repurchases, close the Heartland acquisition, and pursue and deliver growth when returns meet our threshold.

Third we have a diversified development pipeline and a talented development team focused on realizing its value with the appropriate returns to achieve our clean electricity growth plan ambitions.

Speaker Change: Fourth our company has a sound financial Foundation.

Speaker Change: Balance sheet is strong and we have ample liquidity to return cash flow to our shareholders through share repurchases closed the heartland acquisition and pursue and deliver growth when returns meet our thresholds.

John Harry Kousinioris: Finally, we have our people. Our people are our greatest asset, and I want to thank all our employees and contractors for the outstanding work they have done to deliver strong results in the first quarter and set the company up for success for the rest of the year. Thank you. I'll turn the call back over to Chiara.

Finally, we ever people.

Speaker Change: Our people are our greatest asset and I want to thank all our employees and contractors for the outstanding work. They have done to deliver strong results in the first quarter and set the company up for success for the rest of the year.

Speaker Change: I'll turn the call back over to Keira.

Chiara Valentini: Thank you, John. Carmen, would you please open the call for questions from the analysts? Thank you.

Keira: Thank you John Carmen would you. Please open the call for questions from the analysts.

Carmen: Thank you. And as a reminder, press star then 11 to get in the queue and wait for your name to be announced. To remove your question, simply press star 11 again. Stand by while we compile the Q&A roster. One moment for our first question, and it comes from Mark Jarvi with CIBC. Please proceed. Yeah, good morning.

Keira: Thank you and as a reminder, press Star then one one to get into queue and wait for your name to be announced to remove your question simply press star one again.

Keira: And I, while we compile the Q&A roster.

Keira: One moment for our first question and it comes from Mark Jarvi with CIBC. Please proceed.

Mark Thomas Jarvi: Yeah, good morning, everyone. First, all the best to you, Todd, in retirement. It's always been a pleasure to get to know you over the last couple of years.

Mark Thomas Jarvi: Yes. Good morning, everyone first all the best to Todd in retirement, so pleasure to get to know over the last couple of years.

Mark Thomas Jarvi: So John, maybe this, you know, your commitment to the Heartland deal, but you don't want to pursue things like Pinnacle, which would think to make sense in the new market environment. So maybe reconcile this. And if there are some modest reductions in potential cash flows, is there a price adjustment?

Mark Thomas Jarvi: John maybe just.

Mark Thomas Jarvi: Your commitment to the Heartland deal, but you don't want to pursue things like pinnacle, which would make sense in the new market environment. So maybe reconcile this.

Mark Thomas Jarvi: And if there is some modest reductions in potential cash flows is there a price adjustment.

Possible on that deal.

John Harry Kousinioris: Yeah, Mark. Good morning, and I agree with your comments on Todd. He'll definitely be missed here in the company.

John: Yes, Mark.

Mark Thomas Jarvi: Good morning.

Speaker Change: Agree with your comment on Todd you'll definitely be missed.

Speaker Change: Here in the company.

John Harry Kousinioris: Look at Heartland You know, we've reevaluated the transaction in the context of the changing regulations and the market dynamics that we see in the company. It's based on all of our internal forecasting. The transaction continues to make a lot of sense, and one of the key drivers for the transaction for us is our ability to use that kind of significant number of peaking assets that are part of that portfolio, which is a number that our optimization team feels good about.

Speaker Change: Look on Heartland.

Speaker Change: We've reevaluated the transaction in the context of the changing regulations in the market dynamics that we see in the company. It's based on all of our internal forecasting.

Speaker Change: The transaction continues to make a lot of sense and one of the key drivers for the transaction for us is our ability to.

Speaker Change: Use that on a significant number of peaking assets that are part of that portfolio, which is a number that our optimization team feels good.

John Harry Kousinioris: And it's at a price that's exceptional, a price that is much lower than the kind of investment that would be required for us to get the Pinnacle asset developed and operating in the province of Alberta. So when we look on balance at the value associated with our company with completing the Heartland acquisition, we think it's going to create a lot of value for our shareholders. We're confident in it going forward. And then just to address your ongoing question about there being an adjustment to the purchase price, we're not contemplating any changes at this time under the terms of the agreement.

Speaker Change: It's at a price that's exceptional a price that is much lower than the kind of investment that would be required for us to get to clinical.

Speaker Change: Asset developed and operating in the province of Alberta, So when we look on balance at the value associated to our company with completing the heartland.

Acquisition, we think.

It's going to create a lot of value for our shareholders for confident in it going forward and then just to address your your ongoing question on there being an adjustment to the purchase price we're not contemplating anything at this time under the terms of the agreement there is a price adjustment mechanism in the sense that the effective date is the end of October of 2020.

John Harry Kousinioris: There is a price adjustment mechanism in the sense that the effective date is the end of October of 2023, so the value of the portfolio after that date effectively has the effect of grinding down the purchase price. But we're not renegotiating the transaction or anything like that.

Speaker Change: <unk> so the value of the portfolio. After that date effectively has the effect of grinding down the purchase price, but we're not we're not renegotiating the transaction or anything like that.

John Harry Kousinioris: And where are you in the competition review at this point? Any updated views on timelines for closing that deal?

Speaker Change: And where are you in the competition review at this point and any updated views on timelines for closing that deal.

John Harry Kousinioris: Yeah, we still think that we'll be able to get through that process within the first half of the year.

Speaker Change: Yes, we still think that we'll be able to get through that process.

Speaker Change: Within the first half of the year.

Speaker Change: Look we are dealing with the competition Bureau.

Speaker Change: Regularly theres a regular cadence that the discussion that we have <unk> been responsive with us and we continue to address.

Speaker Change: Matters and questions that they have as we.

Speaker Change: Proceed so regarding the optimistic that that will be able to.

John Harry Kousinioris: Look, we are dealing with the Competition Bureau regularly. Normally, there's a regular cadence to the discussion that we have. They've been responsive to us, and we continue to address, you know, matters and questions that they have as we proceed. So, you know, we're guardedly optimistic that we'll be able to have a sort of complete picture of where the competition process within kind of

Speaker Change: How about sort of complete picture on where the competition process with it.

Mark Thomas Jarvi: Okay, and then turning to the buyback, you commented that you see the shares are undervalued here, you're not going to proceed with Tempest, Water Charter, some projects that would have put capital to work this year. Is there an opportunity to, you know, push a little more aggressively on the buyback? Do you have board approval to go beyond $150 million, and is that something you're contemplating right now?

Speaker Change: Next month.

Speaker Change: Okay, and then turning to the buyback.

Speaker Change: You commented you see the share it is undervalued here youre not going to proceed with Tempest water charters. Some projects that would have put capital to work this year.

Is there an opportunity to push a little more aggressively on the buyback to have board approval to go beyond $150 million and is that something youre contemplating right now.

John Harry Kousinioris: Yeah, so look, we continually review our capital allocation approach with our board. Every quarter, we just finished our board meetings here.

Speaker Change: Yes, So look we continually review our.

Speaker Change: Capital allocation approach with our board every quarter. We just finished our board meetings here and look it'll be a discussion point I'm sure that we'll be having with our board as we proceed over the course of the year right now we're really comfortable with the allocation that we have in and in part even though there is a pause on some of those Albert.

John Harry Kousinioris: And look, it'll be a discussion point that I'm sure that we'll be having with our board as we proceed over the course of the year. Right now, we're really comfortable with the allocation that we have. And in part, even though there is a pause on some of those Alberta projects, which were really 2024 projects, we do continue to see some opportunities that we have that we can proceed, candidly, on a contracted basis here in the province of Alberta and even from an M&A perspective.

Speaker Change: Projects, which were really 2024 projects, we do continue to see some opportunities that we have that we can proceed.

Speaker Change: Candidly on a contracted basis here in the province of Alberta, and even from an M&A perspective. So we continue to be disciplined from a return.

John Harry Kousinioris: So we continue to be disciplined from a return perspective and, you know, want to make sure that we're balanced and make the right decisions for our shareholders going forward. But we'll look at it every quarter, but we're absolutely committed to this one.

Speaker Change: Perspective, and want to make sure that we're balanced to make the right decisions for our shareholders going forward, but we will look at it.

Speaker Change: Every quarter, but we're absolutely committed to the 150.

Mark Thomas Jarvi: So you OK, I'll leave it there for now, thanks.

So.

Speaker Change: Okay I'll leave it there for now thanks.

Carmen: Thanks. One moment for our next question, please. And it comes from the line of John Mould with TD Securities. Please proceed.

Speaker Change: Thanks for a moment for our next question. Please.

Speaker Change: And it comes from the line of John Mould with TD Securities. Please proceed.

John Mould: Hey, good morning, everybody. Maybe reliability is a big theme right now, and so I'd just like to ask a bit about Centralia. You know, I think you've talked before about the gas supply constraints at that site, the fact that it's got a legislated shutdown at the end of 2025. What kind of options are you still looking at for that site right now?

John Mould: Hey, good morning, everybody.

Maybe just reliability is a big theme right now and so I'd just like to ask a bit about.

John Mould: Centralia.

John Mould: I think you've talked before about the gas supply constraints of that cite the fact that it's got a legislated shut down at the end of 2025.

John Mould: Kind of options.

John Mould: Are you still looking at.

John Mould: <unk>.

For that that site right now.

John Harry Kousinioris: Yeah, good morning, John, and I actually really appreciate the question. It isn't something that we've spent much time talking about with folks in the market. I'm probably more optimistic about Centralia now than I have been over the course of, I'd say, the last sort of two or three years. We're focusing a lot more on the Pacific Northwest, I would say, from a growth perspective, and there is an increasing realization, I think, in the region that as they move forward to increase the renewable component of their generation, and coal pulls back, that there's going to be the need for, I would say, you know, generation that can provide reliability as the energy transition takes place.

Speaker Change: Yes good.

Speaker Change: Good morning, John and absolutely appreciate the question it is something that.

We've spent much time talking about two to folks in the market.

Speaker Change: I'm, probably more optimistic about Centralia, now and I have been over the course of the I'd say the last sort of two or three years.

Speaker Change: We're focusing a lot more on the Pacific Northwest I would say from a growth perspective.

Speaker Change: There is an increasing realization I think in the region that as they move forward to increase the renewable component of their generation and coal pulls back that theres going to be the need for I would say.

Speaker Change: Generation that can provide reliability as the energy transition takes place. So I would say, we're probably although early stages and more deliberate conversations with potential customers there potentially re imagining the centralia site.

John Harry Kousinioris: So, I would say we're probably, although in the early stages, in more deliberate conversations with potential customers there about potentially reimagining the Centralia site, almost as kind of an energy campus. That's the term that I used internally. Imagine a circumstance where you could see a little bit of solar, maybe some storage, maybe some alternative technologies, and potentially even some peaking gas that would help to sort of bridge the gap. This is all very sort of early days, but I would say that the momentum is better today than it was, I would say, Todd, Blain, you know, even six months ago, in terms of the kinds of discussions that we're having.

Speaker Change: Almost as kind of an energy campus, that's sort of the term that I used internally, so imagine a circumstance, where you could see a little bit of solar may be some storage.

Maybe some alternative technologies and potentially even some peaking gas that would help to sort of bridge. The gap. This is all very sort of early days, but I would say that the.

Speaker Change: Momentum is better today than it was I would say Todd Lane.

Speaker Change: Even six months ago, I would say in terms of the kinds of discussions that we're having so.

John Harry Kousinioris: So, you know, it's not that we're going to have something to announce tomorrow, but we are actively, much more actively working on it, I would say, and more optimistic about the back half of the decade for that area. It's perfectly situated and has excellent transmission interconnections to the region, so it's a really great site.

Well look we're going to have something to announce tomorrow, but we are actively much more actively working on it I would say it more optimistic about the back half of the decade.

Speaker Change: And for that for that areas, it's perfectly situated.

Speaker Change: <unk> has excellent transmission.

Speaker Change: Interconnections to the region. So it's really a great site.

John Mould: Hey, thanks for that. And, you know, maybe you can circle back on your comments about 400 megawatts this year and targeted growth. What do you see as the best opportunities where you could, you know, make an FID, and just looking at your, you know, the pipeline in your slide deck, there's a lot of potential for 2024 FIDs in Australia. Is that, is that kind of a focus?

Speaker Change: Okay. Thanks for that.

Speaker Change: And maybe.

Speaker Change: Circling up on on your comments about the 400 megawatts this year and targeted growth what do you see as.

John Mould: And, and I guess, you know, not doing Greenfield in Alberta right now, you know, what projects are you still looking at, I guess, more on the brownfield side there? And, you know, could any of those see an FID this year?

Speaker Change: The best opportunities, where you could.

Speaker Change: Make it <unk>.

Speaker Change: Just looking at your the.

Speaker Change: The pipeline in your slide deck, there's a lot of potential.

Speaker Change: 2024, if I can use in Australia is that does that kind of a focus and I guess not doing greenfield in Alberta right now what what projects are you still looking at I guess more on the brownfield side there.

Speaker Change: Of that <unk> this year.

John Harry Kousinioris: Yeah, I would say, look, we have some opportunities that we're pursuing in Alberta. They're definitely not retail, and some of them are on scale. I wish I could talk more about them, but I actually can't at this point in time.

Speaker Change: Yes, I would say look we have some opportunities that we're pursuing in Alberta.

Speaker Change: They are definitely not merchant.

Speaker Change: And some of them are of scale.

John Harry Kousinioris: But they're not projects that have what I would call sort of merchant exposure or even particularly any sort of tail exposure. So they're very much oriented toward serving the needs of industrial customers in the province. In terms of other jurisdictions, you know, Western Australia continues to be important for us. We do have opportunities from an M&A perspective that we're pursuing. You know, interestingly, we are seeing better returns right now, John, probably for some of the contracted, or actually even better, a mixture of sort of contracted and merchant, and this is not in Alberta, but another jurisdiction. [inaudible] rather than sort of, you know, what I would call greenfield, run of the mill renewables right.

Speaker Change: I wish I could talk more about them, but I actually can't.

Speaker Change: At this point in time, but they're not projects that have what I would call sort of merchant exposure, even particularly sort of tail exposure. So they are very much oriented towards serving.

Speaker Change: Adjusted each of industrial customers in the province in terms of other jurisdictions, you know Western Australia continues to be important for us.

Speaker Change: We do have opportunities from an M&A perspective that we're pursuing.

Speaker Change: Interestingly, we are seeing better returns right now John probably for some of the.

Speaker Change: Contracted or actually even better a mixture of sort of contracted and merchant.

Speaker Change: Not in Alberta, but in other jurisdictions.

Speaker Change: Gas.

Speaker Change: Facilities, where we ended up having the ability to take the expertise that our trade floor has on our optimization team at.

Speaker Change: To kind of.

Speaker Change: Extract more value from those assets and create higher returns when we look at I would say Todd where our share price is trading at we're very mindful as we're looking at our at our share buybacks to make sure that the kind of thresholds that we have for our growth.

Speaker Change: Appropriate, but thats, a little bit easier to do maybe with some of the M&A opportunities that we're seeing rather than sort of what I would call Greenfield run of the mill renewables right now.

John Mould: Okay, that's interesting. Thanks for that! And then on the power market restructuring, you know, you've talked about the need for long-term incentives for investment, you know. I'm wondering what you think about shorter-term incentives for older operating gas. You know, I think it's fair to say the provincial government's been a vocal supporter of gas and the power system. What kind of construct do you think is needed to keep, you know, older units online, particularly given the amount of supply we've got coming online this year and the potential for less volatility in the near to mid term?

Okay. That's interesting thanks for that and then on the power market restructuring that you've talked about the need for long term incentives for investment I'm wondering what youre thinking about shorter term incentives for older operating gas I think its fair to say the provincial government's been Ah <unk>.

Speaker Change: Vocal supporter of gas in the power system, and what kind of construct do you think is needed to keep.

Speaker Change: Alder units online, particularly given the amount of supply and we've got coming online this year and the potential for less volatility in the near to mid term.

John Harry Kousinioris: And what I'll do is I'll probably tap Blain, who, as you know, oversees our Alberta business portfolio, to give sort of his perspectives. But maybe I'll just start by giving just a few thoughts.

Speaker Change: And what I'll do is I'll probably.

Speaker Change: Tap Blayne, who as you know oversees our Alberta business portfolio ticket sort of his perspective, but maybe I'll just start by giving just a few thoughts.

Speaker Change: Look our current view is that with the.

John Harry Kousinioris: You know, look, our current view is that with the kind of work that's being done from a regulatory perspective to sort of get things right, because I think we would agree with the ISO that the penetration of renewables in the province, although positive in the sense of the decarbonization that's occurred, does put pressure on kind of a simple conventional market structure that we had before. I think it's going to take a bit of time for people to get the confidence to make. Investments in the province are pending the review. That means that the assets that we actually have in the ground today are, from our perspective, worth more. They're actually there.

Speaker Change: Kind of work that's being done from a regulatory perspective sort of get things right because I think.

Speaker Change: We would agree with the ISO that the penetration of renewables in the province, although positive in the sense of the Decarbonization Thats occurred does put pressure on kind of a simple conventional market structure that we had before.

Speaker Change: Think it's going to take a bit of time for people to get confidence to make.

Speaker Change: Investments.

Speaker Change: In the province pending the review that means that the assets that we actually have in the ground today are from our perspective worth more.

John Harry Kousinioris: They're, in many respects, de-risked. They've been built. We know how they operate, so there's very much good value there. We also think that there are many circumstances in which their generation will absolutely be needed. In the province, I'd say pretty dramatically, the population inflow is high, and industrial activity is high.

Speaker Change: They're actually they're there in many respects derisked a bit built.

Speaker Change: We know how they operate so theres very much good value. There. We also think that there are many circumstances in which their generation will absolutely be needed I think load is continuing to grow.

Speaker Change: In the province, I would say pretty dramatically the population inflow as high industrial activity is high and we haven't even begun talking about data centers and AI, which is something that's still in its early days here, but.

John Harry Kousinioris: And we haven't even begun talking about data centers and AI, which is something that's still in its early days here but could potentially expand the grid. So, you know, I think in terms of the legacy assets, if I can put them that way, I think some of them are going to be required. They'll probably have lower capacity factors, but will absolutely be required. And I think some of them, and we're encouraging the ISO and even the government to think about this, may require some kind of, you know, contracting, almost like an insurance policy, to make sure that they're in the market to ensure that we have reliability when we need it. Blaine, I don't know if you want to add any more color to that.

Speaker Change: Potentially expand.

Speaker Change: The grid so.

Speaker Change: In terms of the legacy assets, if I can put them that.

Speaker Change: I think some of them are going to be required they'll probably have lower capacity factors, but we'll absolutely be required and I think some of them.

Speaker Change: We're encouraging the ISO and even the government to think about this may require some kind of contracting almost like an insurance policy. So to make sure that they are in the market to ensure that we have reliability when we need it blayne I don't know if you want to add any more color to that no I think that's good and it's consistent with the message that we gave at Investor day.

Blain Van Melle: No, I think that's good. And it's consistent with the message that we gave at Investor Day last November, where we showed that the units are definitely needed in the market for a reliability type of stance. And the work that the ISO's proposed in the short term and with the restructured energy market does have a significant focus on reliability and ensuring that there's always enough capacity in the grid and on the grid to meet load at any time. So, we continue to have discussions on what that can look like for different assets in our mix in our portfolio. And we're confident that we'll, you know, find something that works for our fleet.

Speaker Change: November where we showed that the units definitely are needed in the market for a reliable.

Blayne: Type of.

Speaker Change: Stance and.

Speaker Change: Worked at the ISO as proposed and.

Speaker Change: The short term and with the restructured energy market does have a significant focus on reliability and ensuring that theres always enough capacity in the grid and on the grid to meet load at any time. So we continue to have the discussions on what that could look like for different assets.

Speaker Change: Our mix in our portfolio and we're confident that we'll find something that works.

Speaker Change: Our fleet.

John Mould: Okay, that's great. Thanks for all that color. I'll leave it there. Todd, thanks for all your help and support over the years and wishing you a great retirement.

Speaker Change: Okay. That's great. Thanks for all that color I'll leave it there Todd Thanks for all your help support over the years and wishing you a great retirement.

Carmen: Thank you. One moment for our next question, please. It comes from the line of Ben Pham with BMO. Please proceed.

Speaker Change: Thanks, John one moment for our next question. Please.

Speaker Change: It comes from the line of Ben Pham with BMO. Please proceed.

Benjamin Pham: Hi, good morning. I just wanted to send my, yeah. Okay, my regards to Todd, too, on your retirement. Thank you.

Benjamin Pham: Hi, Good morning, I was glad to see.

Benjamin Pham: Maybe just, you mentioned data centers and And maybe a couple of questions on that. Do you think that there's an opportunity with your hydro? You know, Alberta, adding renewables to provide something similar to what the Brookfield Renewable Group is doing.

Benjamin Pham: Semi.

Benjamin Pham: In regards to type two on your retirement thank you.

Benjamin Pham: Maybe just.

Benjamin Pham: You mentioned, you mentioned data centers and.

Benjamin Pham: And maybe a couple of questions on that.

Benjamin Pham: Do you think that that.

Benjamin Pham: There is an opportunity with your hydro.

Benjamin Pham: Alberta.

Benjamin Pham: Adding renewables to provide a similar to what.

Benjamin Pham: Brookfield renewable group is doing.

John Harry Kousinioris: Yeah. By the way, good morning, Ben.

Benjamin Pham: Yes.

Speaker Change: By the way good morning, Ben.

Speaker Change: <unk>.

Speaker Change: Look I think that the.

John Harry Kousinioris: You know, look, I think the Brookfield transaction that was just announced is pretty impressive and really shows the kind of, you know, momentum that, you know, you can see in the sector and also their ability to execute, which, again, is pretty impressive. For us, you know, our hydro fleet in the province is super high value. I mean, we tend to think of that as a premium price asset. So there's a bit of a kind of disconnect, I think, with the kind of value or the pricing, the way we optimize the fleet versus the, I would say, the price sensitive nature of what we're seeing, even in some of the early, early discussions we've had on sort of data centers.

Benjamin Pham: Brookfield transaction. It was just announced is pretty impressive that and really shows the kind of momentum that.

Benjamin Pham: You can see in the sector and also their ability to execute which again is pretty impressive for us.

Benjamin Pham: Our hydro fleet in the province is.

Benjamin Pham: Super High value I mean, we tend to think of that as a premium price assets, so theres a bit of a.

Kind of a disconnect I think with the kind of value where the pricing the way, we optimize the fleet versus.

Benjamin Pham: I would say the price sensitive nature of.

Benjamin Pham: While we're seeing even in some of the early early discussions we've had all sorts of data centers, so I'm not sure that.

John Harry Kousinioris: So I'm not sure that, you know, our hydro fleet is the right way to move forward. Having said that, Blain and I talk all the time about, is there a way that we can provide reliable, but greener generation, a mixture of our wind tied with maybe some low-emitting natural gas or even some storage to kind of shape a product that makes sense for data centers going forward. We have more work to do on that, candidly, but I think that's the way we're thinking of it, at least at this point.

Benjamin Pham: Our hydro fleet is the right way to move forward, having said that.

Benjamin Pham: And I talk all the time about is there a way that we can provide reliable, but greener generation a mixture of.

Benjamin Pham: Our win tied with maybe some low emitting natural gas or even some storage to kind of shape, our product that makes sense for datacenters going forward, we have more work to do on that candidly.

Benjamin Pham: But I think that's the way we're thinking of it at least at this point I would safely.

John Harry Kousinioris: And I would say Ben too, people often forget we have our Sarnia. So, you know, that provides behind-the-fence generation for a number of the industrial places or players in that part of the world. And that too has been, we actually have a Bitcoin mining operation that is already situated there. So, you know, many people often skip it from the context of Alberta. It's also that facility and other facilities that we have that can also be prospective for these kinds of projects.

Benjamin Pham: Okay.

Benjamin Pham: And I would say Ben two people forget we have our Sarnia facility. So that provides behind the fence generation for a number of the industrial places.

Benjamin Pham: Our players in that part of the world and that too has been we actually have a a bit quite mining operation that actually are situated there already so.

Benjamin Pham: Many people have to keep it from the context of Alberta.

Benjamin Pham: It's also that facility and other.

Benjamin Pham: Facilities that we have that can also be prospective for these kinds of things.

Benjamin Pham: Okay, got it. And I know you announced The White Rock wind farm being commissioned by Amazon as a counterparty. Can you, can you comment? Because I know...

Speaker Change: Okay got it.

Speaker Change: I know you announced.

Yes.

Speaker Change: That that white rock.

Speaker Change: Wind farm being commissioned MSR as a counterparty can you.

Speaker Change: Can you comment because I know.

John Harry Kousinioris: I think a few years back, maybe a year back, you mentioned your competitive advantage dealing with counterparties to secure contracts. Can you talk about just how that relationship with maybe Amazon? has been how you've built it; are they very happy with the process? Could it lead to other opportunities beyond White Rock?

Speaker Change: A few years back we had a year back EMEA you've actually here.

Speaker Change: Batch dealing with Counterparties to secure contracts can you talk about just how that relationship with Amazon.

Speaker Change: Has been how you built it at a.

Speaker Change: Very happy with the process.

Speaker Change: Two to better.

Speaker Change: Opportunities beyond White rock.

John Harry Kousinioris: Yeah, no, I think, and Blain can speak to this too. I mean, Amazon is happy, just like Meta as well. Very happy. I mean, each company has, you know, different styles, the extent of the engagement is different with each of them. But no, for sure, I would say they're happy. They've got massive needs. Going forward, I would say Blain, but you can maybe give some color.

Speaker Change: Yes, no I think Blake.

Speaker Change: Blake can speak to this too I mean Amazon.

Blake: It's happy just like meta as well very happy of each company has.

Blake: Different style.

Blake: The extent of the engagement is different with each of them, but no for sure I would say, they're happy they've got massive needs.

Blake: Going forward I would say plane, but you can maybe give some colors, we talked to them across the jurisdictions on their needs as they look for geographic diversity as they meet their ESG goals. They are a great counterparty that is collaborative and their approach and we work with them across various different parts of the business, including energy marketing group to help them.

Blain Van Melle: Can we talk to them across jurisdictions about their needs as they look for geographic diversity, as they meet their ESG goals? They're a great counterparty that is collaborative in their approach, and we work with them across various different parts of the business, including the Energy Marketing Group, to help them do what's needed.

John Harry Kousinioris: It's not a one-off discussion. I mean, it's a continuing dialogue.

Blake: It's not a one off discussions that maybe it's a continuing dialogue we have.

Benjamin Pham: All right, that's good to hear. And maybe maybe last time you were doing the description about actually having the NCIP and an enhanced program. Would you consider, are you considering maybe something of a larger scale now? Where you can work with a deal or do something larger. Just given maybe a bit of a pullback on on a

Speaker Change: Okay Alright.

Speaker Change: And maybe I'll ask I know you've been doing there.

Speaker Change: About it actually have the Mci and <unk>.

Speaker Change: <unk> program.

Speaker Change: Would you consider or are you considering maybe something of a larger scale now.

Speaker Change: Where.

Speaker Change: You can work with a deal or do something larger than.

Speaker Change: Just just given maybe a bit of a pullback on.

Speaker Change: On a brighter.

John Harry Kousinioris: Yeah, I mean, all I can say is that we're very much committed to the plan that we set out. Oh, gosh, Todd, was it about two months ago now?

Speaker Change: Yes, I mean, all I can say is that.

We're very much committed to a plan that we set out.

Speaker Change: Oh Gosh, Scott talked about two months ago now.

Benjamin Pham: In terms of proceeding at this point, going forward, I mean, I don't want to speculate on what we do in the future. But we do look at our capital allocation with our board continuously, and, you know, it's a constant conversation that we have with them about what opportunities we have. How are we returning capital to our shareholders? And what's the right balance? So it's It's a constant conversation, I would say with our company and our board.

Speaker Change: In terms of proceeding at this point.

Speaker Change: Going forward I mean, I don't want to speculate on what we do.

Speaker Change: In the future, but we do look at our capital allocation with our board.

Speaker Change: Tenuously and.

Yeah.

Speaker Change: It's a cost that conversation that we have with them on what are the opportunities. We have are we returning capital to our shareholders in <unk>, what's the right balance so it's just.

Speaker Change: It's a constant conversation I would say with our company and our board.

Benjamin Pham: Okay, I got it. Thank you.

Speaker Change: Okay got it okay. Thank you.

Carmen: Thank you. One moment for our next question, and it comes from the line of Maurice Choy with RBC Capital Markets. Please proceed.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Yeah.

Speaker Change: And he comes from the line of Maurice Choy with RBC capital markets. Please proceed.

Maurice Choy: Thank you and good morning everyone. I want to come back to your prepared remarks that are based on your early outline. Free cash flow in 2025 will be broadly in line with 2024. I assume this includes the Heartland generation assets, but can you comment on the power production level? you've assumed for your four legacy coal-to-gas assets that you currently own today. Or put differently, what would the run rate production level be for these assets moving forward?

Maurice Choy: Thank you and good morning, everyone.

Wanted to come back to your prepared remarks that based on your early outlook free.

Maurice Choy: Free cash flow in 2025 will be broadly in line with 2024.

Speaker Change: I assume this include the Heartland generation assets, but can you comment on the production power production level.

Speaker Change: Q4, you for legacy coal to gas assets that you currently own today.

Or put differently what would the run rate production that will be for these assets moving forward.

John Harry Kousinioris: Yeah, I don't. I don't actually. So, first of all, good morning, Maurice.

Speaker Change: Yes, I don't I don't actually so first of all good morning Murray Thanks for the question.

John Harry Kousinioris: Thanks for the question. Look, when we think of 2025 and kind of the early look work that we do, and we do a multi-phased budgeting approach in the company, we do an early look, and then we continue to refine it. And then, you know, we end up approving our budget in the back half of the year, but it's sort of a continuous process. There are a number of things that go into that.

Speaker Change: <unk>.

Speaker Change: When we think of 2025.

Speaker Change: And kind of the early work that we do and we do a multi phased.

Speaker Change: Budgeting approach in the company, we do an early look and then we continue to refine it and then we ended up approving a budget in the back half of the year, but it's sort of a continual process. There is a number of things that go into that.

John Harry Kousinioris: You know, I can tell you that we're comfortable with the hedge levels that we've got for 2025, which I think are somewhere in the four and a half thousand gigawatt hour range kind of nudging up into that $80 range. We have a sense of what our CNI business is continuing to book and the prices at which they're booking them, and we're very much mindful of the impact that the new growth is that we've got And then, you know, to your point, it does include the benefit of having the Heartland generation transaction come into the company. That would be one of the base assumptions.

Speaker Change: I can tell you that that we're comfortable with the hedge levels that we've got for 2025, which I think is somewhere in the 400000 gigawatt hour range kind of nudging up into that $80 range, we have a sense of what our C&I businesses continuing to book and the prices at which they are they are booking them work very much.

Speaker Change: Mindful of the impact that the new growth is that we've got in the organization, which <unk> $100 million of EBITDA coming into the company.

Speaker Change: Then to your point. It does include the benefit of having the Heartland generation transaction come into the company that would be one of the face.

Speaker Change: <unk> so.

Speaker Change: Do we continue to see I would say Todd in Blaine kind of capacity factors kind of nudging downwards, I think we'd probably do in terms of the generation of the fleet I think all gas in Alberta, we tend to think of all gas velbert is being <unk> now, we don't really think of them as baseload generating units anymore, but.

John Harry Kousinioris: So, you know, do we continue to see, I would say, Todd and Blaine kind of capacity factors, kind of nudging downwards, I think we probably do in terms of the generation of the fleet. I think all gas in Alberta, we tend to think of all gas in Alberta as being peakers now; we don't, you know, we don't really think of them as base load generating units anymore. But certainly, our team could maybe cycle back with you and see, you know, what more color we could share. But we're pretty sure when we put everything together, and we look at all the levers that we can pull, we feel, you know, when we put everything together, and we look at all the levers that we can pull,

Speaker Change: Certainly our team could maybe circle back with you and see what more color, we can share, but we're pretty when we put everything together and we look at all believers that we can pull we feel pretty comfortable.

John Harry Kousinioris: Got it. And remember, we Go Ahead. Yeah, we continually optimize how we actually deliver on an hour-by-hour basis. When we see a large influx of renewables, we're more than happy to use that low-priced market power in order to fulfill all of our customer contracts. So it will be a blend of megawatts that we produce ourselves and megawatts procured on the market at very attractive prices. Yeah, that

Speaker Change: Got it and then remember we go.

Speaker Change: Go ahead, yes, we continually optimize how we actually deliver on an hour by hour basis. When we see a large influx of renewables, we're more than happy to to use that low low price market power in order to fulfill all of our all of our customer contracts. So it will be a blend of megawatts that we produce ourselves and megawatts procured at the market.

Blain Van Melle: Yeah, that's it. I didn't talk about it, Blain.

Speaker Change: At very attractive prices, yes, I'd say, if I didn't talk about it but I think I think we feel pretty comfortable about.

John Harry Kousinioris: I think we feel pretty comfortable about, you know, how our Hydro is expected to perform in subsequent years. You know, from an AS perspective and from an energy perspective. So, you know, it's putting together all of the pieces I think that we have going forward.

Speaker Change: How our hydro is expected to perform.

Speaker Change: In subsequent years, we're both from an aas sand from a from an energy perspective so.

Speaker Change: It's putting together all the pieces I think that we have going forward.

Maurice Choy: Maybe as a quick follow-up, since you mentioned the dynamics of how some of these hedges or power prices are set, you've been able to hedge at about $80 per megawatt hour, despite the recent decline in near-term prices. Can you provide some color as to how you think your counterparties are happy signing at premium prices like these? And what may it mean in terms of the true price signal for future years?

Speaker Change: Maybe just a quick follow up since you mentioned the dynamics of how some of these hedges our pulp prices are set.

Speaker Change: <unk> been able to hedge at about $80 per megawatt hour. Despite the recent decline in near term for prices.

Speaker Change: Can you provide some color as to how you think your counterparties are happy signing at premium prices.

Speaker Change: And what it may mean in terms of.

Speaker Change: The true price signal for future years.

John Harry Kousinioris: Yeah, so look, our C&I team reports to Blain, and I think people sometimes forget that when we talk about our hedges, I think Blain, something like 40% of our hedge position is sort of our own book. It's not sort of the financial hedges that we do in the marketplace.

Speaker Change: Yes.

Speaker Change: Look our C&I team.

Speaker Change: Reports, the blade and I think people, sometimes forget when we talk about our hedges I think Blaine something like 40% of our etch position as sort of our own book, it's thought sort of the financial hedges that we do in the marketplace.

John Harry Kousinioris: We have a variety of customers. It is a multi-year, in many respects, procurement that customers do. So they don't necessarily look at one year. I think a typical kind of procurement would be closer to three years in terms of what we do. So people tend to look at, you know, pricing over a longer period of time; they factor in what gas prices would be. There's volatility there. I mean, they're relatively inexpensive today, but that can, that can change.

We have a variety of customers. It is a multi year in many respects procurement the customers do so they don't necessarily look at one year I think a typical kind of procurement would be closer to three years in terms of what we do so people tend to look at.

Speaker Change: Pricing over a longer period of time, they factor in what gas prices would be there's volatility there I mean, they're relatively inexpensive today that can that can change and we've seen a change.

John Harry Kousinioris: And we've seen it change. So, you know, and it's reflective of all of the efforts that we've had in previous years in terms of setting that book at prices that we thought made sense in the context of where we thought fundamental pricing was going to be in the market. So it's, it's a bit of an art, I think that we have. And I think Blain, even recently, we're pretty happy with where some of the pricing is coming in on our C&I book, where we stand on pricing in the market.

Speaker Change: So.

Speaker Change: And it's reflective of all of the efforts that we've had in previous years in terms of setting that book at prices that we thought made sense in the context of where we thought fundamental pricing was going to be in the market. So it's.

Speaker Change: It's a bit of an art I think that.

Speaker Change: That we have.

Speaker Change: I think Blaine, even recently, we're pretty happy with where some of the pricing is coming in in our C&I book that was standing where pricing is in the market.

John Harry Kousinioris: Mark Mould, Patrick Kenny, Robert Hope, Andrew Kuske, Naji Baydoun, Maurice Choy, and Dariusz

Blain Van Melle: Right John.

Blain Van Melle: We look at that hedging program and our customer base, which is broad spanning a lot of different industries within the province here.

Blain Van Melle: Take a focus with them for being able to provide that price certainty that they need for their business. The same reason that we hedge our output out of our power plants, it's really to achieve what they need in their business, which would be not their core thing.

From the widget, they're producing or that whatever the customers, they're serving they need that certainty and that's the service that we feel we're providing them.

John Harry Kousinioris: And the chunks of contracts are from, you know, the relatively small to the pretty significant. I mean, everything from, you know, like, imagine a hotel business to municipalities. So it's quite a broad spectrum.

And the chunks.

Blain Van Melle: Of contracts are relatively small to the pretty significant I mean everything from you know.

Blain Van Melle: Like I imagine our hotel business to municipalities. So it's quite a quite a broad spectrum of customers that we have.

Maurice Choy: Okay. And I could finish off with a question on capital allocation here. You mentioned that you're going to focus on US and Aussie assets versus Alberta Greenfield projects. Can you help us compare the returns on these projects versus buying back your shares? I know you mentioned that buying back shares is the best value for shareholders today, but maybe more specifically the spread between buying back your shares and the returns for these projects and how that has changed in recent months.

Blain Van Melle: Understood.

Speaker Change: If I can finish off with a question on capital allocation here you mentioned that you are going to focus on the U S.

Speaker Change: Yes, that's fair.

Speaker Change: But a greenfield projects.

Speaker Change: Can you help us compared to returns on these projects versus buying back shares I know you mentioned that buying back shares is the best.

The best value for shareholders, but maybe more specifically is spread between buying back shares and the returns for these projects over there and how that has changed over recent months.

John Harry Kousinioris: Yeah, look, we think our share price is undervalued, Maurice. I mean, you and I have chatted about that.

Speaker Change: Yes look.

Speaker Change: We think our share prices undervalued, Maurice I mean, you and I have chatted about that.

Speaker Change: Before I.

John Harry Kousinioris: Before I I think if you just kind of look at the kind of cash that we're looking at generating this year, and you sort of look at it, you know, as a percentage of kind of where our price is, that's a pretty good return for our shareholders right now. So, so do we have opportunities that are, you know, in the teens, sometimes high teens, we do. They're, they're, they're probably more on the thermal side than they are on the renewable side.

Speaker Change: I think if you just kind of look at the kind of cash that were looking at generating this year and you sort of look at it as a percentage of kind of where are prices. That's a pretty good return for our shareholders right. Now. So so do we have opportunities that are in the in the teens, sometimes high teens, we do.

Speaker Change: They're probably more I would say on the thermal side than they are on the renewable side, but but.

John Harry Kousinioris: But, but, given where we're trading today, we tend to think of that as creating a little bit of a bit of a mark in terms of what our shareholders are expecting us from a capital allocation perspective. So that clearly influences the way that we're thinking about deploying capital to support growth.

Speaker Change: Given where we're trading today.

We tend to think of that as creating a little bit of a.

Speaker Change: A bit of a mark in terms of I think where our shareholders are expecting us from a capital allocation perspective, so that clearly influences the way that we're thinking about deploying capital to support growth.

Maurice Choy: Perfect. Thank you very much.

Speaker Change: Yeah.

Speaker Change: Perfect. Thank you very much.

Thank you.

Carmen: One moment for our next question, please. And it comes from the line of Patrick Kenny with MBS. Please proceed.

Speaker Change: One moment for our next question please.

Speaker Change: And he comes from the line of Patrick Kenny with MBS. Please proceed.

Patrick Kenny: Yeah, good morning, everybody. I guess before the new rule changes take effect here July 1, are you pursuing any modifications to either the price cap, the supply cushion target, or perhaps any parameters around the reference unit? I'm just wondering, you know, if you had any color on what recommendations you might be making to the government before these rules take effect?

Patrick Kenny: Yes, good morning, everybody.

Patrick Kenny: I guess before the new rule changes take effect here July one are you pursuing any modifications to.

Patrick Kenny: Neither the price cap.

Patrick Kenny: The supply cushion target.

Speaker Change: Or perhaps any parameters around the reference unit I'm just wondering if you had any color on what recommendations you might be making to the government.

Speaker Change: Before these rules take effect.

John Harry Kousinioris: Yeah, good morning, Patrick, and thank you for the question. I would say a couple of things.

Speaker Change: Yes.

Speaker Change: Good morning, Patrick and thank you for the question I would say a couple of things I'll turn it over to Blaine to talk about.

Speaker Change: One of the elements that we have more on the supply cushion regulation, which is something I think that we've been focused on <unk> going forward I do want you mentioned kind of the reference plant.

Blain Van Melle: I'll turn it over to Blain to talk about one of the elements that we have more on the supply cushion regulation, which is something I think that we've been focused on Blain going forward. I do want to, you know, you mentioned kind of the reference plant. We've made it pretty clear, I would say to the, to the ISO, that kind of a reference plant that they're using to set the pricing is not, at least from our own perspective, you know, broadly reflective of what [inaudible] Given where, you know, fundamental supply and demand is in the province, we think it's low, candidly, and we told them that I'm not sure it's going to have any impact in terms of where things will be in terms of the interim regulation, but we think it's low.

Speaker Change: We've made it.

Speaker Change: Pretty clear I would say to the.

Speaker Change: To the ISO that kind of reference plant that they are using to set the pricing is not at least from our own perspective.

Speaker Change: Broadly reflective of what.

Speaker Change: You could actually do from a commercial perspective in the marketplace today in the sense that I think the kind of returns the pre tax returns that they've set or are lower than would need to be the case.

Speaker Change: And both the capital costs associated with developing a plant like that.

Speaker Change: <unk> is actually lower than needs to be so from that perspective, even though we don't think that the price.

Speaker Change: Price limit is going to have any kind of a meaningful or appreciable impact given where fundamental supply and demand.

As in the province.

Speaker Change: It is slow candidly and we told them that I'm not sure it's going to have any impact in terms of where.

Speaker Change: Things will be in terms of the interim regulation, but we think it slow and then on the supply question. It is something that we are looking to see if we can actually extract a bit of a change going forward and maybe I'll turn it over to you because you are in the midst of about the conversations we're in there Patrick related around the supply cushion regulation and the reconstitution of pool price if long lead asset.

Blain Van Melle: And then on the supply cushion, it is something that we are looking to see if we can actually extract a bit of a change, going forward and blame. Maybe I'll turn it over to you because you're in the midst of that.

John Harry Kousinioris: Yeah, so the conversations were in there, Patrick, related around the supply cushion regulation and the reconstitution of pool price if long lead assets are brought online to support reliability, and they're not actually needed due to forecasting errors. So, it's one that kind of creates some concern because it might have the impact of reducing the price fidelity signal that we see in the market. We think that's a change broadly supported by the rest of the industry, based on the conversations that we've had.

Patrick Kenny: Are brought online to support reliability.

Speaker Change: Not actually.

Speaker Change: Due to a forecasting error, that's one that kind of created some concern that might have impact of reducing the price fidelity signal that we see in the market.

Speaker Change: I think thats broadly supported by the rest of the industry based on the conversations that we've had.

John Harry Kousinioris: And, you know, based on the conversations, we're optimistic that we could maybe see some change on that one. Again, like John mentioned in his earlier comments, though, given the supply and demand fundamentals and where pricing is over the next few years that those regulations are in place, we don't think that, you know, it's a huge impact, but we just want to ensure that if we are in those situations, that the price signal remains what it should be, based on the supply and demand fundamentals in the market, and not just for our own fleet. But for every generator within the province, as opposed to a misdiagnosis that effectively results in more generation being online than needed to be. If you see what I'm saying,

Speaker Change: And.

Speaker Change: We're optimistic based on the conversations that that we could maybe see some change to that one.

Speaker Change: Again like John mentioned in his earlier comments, though given the supply demand fundamentals and where pricing is over the next few years that those regulations are in place. We don't think that it's a huge impact, but we just want to ensure that if we are in those situations that that the the price signal remains but it should be based on.

Speaker Change: Demand fundamentals in the market and not just for our own fleet, but for every generator within the province as opposed to it.

Speaker Change: This diagnosis effective effectively the results in more generation being online that needed to be if you see what I'm, saying.

Patrick Kenny: Okay, that's great. But I guess if the rule changes, it will take effect as is. Say, without any of your recommendations, would you consider, perhaps, an early retirement of some of your boiler converted units over the next two to three year interim period, or do you just have the plan to forge ahead, no change to your maintenance capital program, continue to keep these units available, even if utilization does, you know, does nudge down, and you're not able to capture much in the way of peak pricing going forward?

Speaker Change: Okay.

Speaker Change: Okay, that's great.

Speaker Change: But I guess.

Speaker Change: If the rule changes take effect as is.

Speaker Change: Say without any of your recommendations.

Speaker Change: Would you consider.

Speaker Change: <unk> perhaps.

Speaker Change: And early retirement of some of your boiler converted units over the next two to three year interim period.

Speaker Change: Or do you just.

Speaker Change: Is the plan to forge ahead, no change to your maintenance capital program.

Speaker Change: Continue to keep these units available even if utilization does does nudge down.

Speaker Change: You're not able to capture.

Speaker Change: Much in the way of peak pricing going forward.

John Harry Kousinioris: I'd say, Patrick, we constantly assess. Unknown Speaker.

Speaker Change: I would say Patrick we constantly assess.

John Harry Kousinioris: The economics associated with each of the plants and the kind of role that they play within the market, both in terms of the kind of energy market that we have today and in terms of their potential role in providing reliability services that they could potentially be compensated for by the province going forward, which is sort of a new area that we're exploring. You know, decisions that we make, I think on those plants, I'd say Blain, are going to be based fundamentally on supply and demand dynamics that we see in the province and kind of forward curve pricing, not so much the impact on the interim regulations, which we really don't think are going to really influence kind of overall economics or outcomes, all that.

Speaker Change: Kind of the.

Speaker Change: The economics associated with each of the plants and kind of the role that they play within.

Speaker Change: Market both in terms of the kind of energy market that we have today and.

In terms of their potential role as providing reliability services that they could potentially be compensated for for.

Speaker Change: For the profits going forward, which was sort of a new area that we're exploring.

Speaker Change: Decisions that we make I think on those plants, I'd say play and they're going to be based fundamentally on <unk>.

Speaker Change: Supply and demand dynamics that we see in the province, and kind of the forward curve pricing not so much the impact on the interim regulations, which we really don't think are going to really influence the kind of overall economics or outcomes all that much.

Patrick Kenny: Okay, okay, it makes sense. And then, if I could just, on Alberta hydrology here. Can you just walk us through how the MOU compensates for any opportunity cost or lost revenue related to managing the water supplies in the South? And then if this is sort of a temporary agreement until the reservoir levels are back to normal, or is this more, you know? More of a go forward agreement in the years ahead as well.

Speaker Change: Okay. Okay that makes sense and then if I could just.

Speaker Change: On the Alberta hydrology here.

Speaker Change: Sorry, if I missed it but.

Speaker Change: Can you just walk us through how the Mou compensates for any.

Speaker Change: The opportunity cost or lost revenue related to managing the water supplies in the south and then.

If this is sort of a temporary agreement until the reservoir levels are back to normal or is this more.

Speaker Change: More of a go forward agreement.

Speaker Change: The years ahead as well.

John Harry Kousinioris: So, I think the MOU doesn't really have anything in it that deals with sort of a compensation perspective. It's, it's kind of a, think of it as an agreement to agree or an agreement to work together in a cooperative way to make sure that appropriate decisions are being made.

Speaker Change: So I think so the Mou doesn't really have.

Speaker Change: Anything in it that kind of deals with sort of a compensation perspective, it's kind of a think of it as an agreement to acquire an agreement to work together in a cooperative way to make sure that appropriate decisions are being made we actually don't think it will impact the ability of our company.

John Harry Kousinioris: We actually don't think it'll impact the ability of our company to actually operate in the manner in which we currently operate the hydro fleet. I think we're party to that agreement, primarily because we're the carrier of the water. We're not, we're not really a consumer of water. So, I think that the province is much more concerned about the consumers of water. And when we think of it, it's more, you know, in terms of a populist sort of industrialized water basin.

Speaker Change: Two to actually operate the manner in which we currently operate the hydro fleet I think we're party to that agreement primarily because we are the carrier.

Speaker Change: The water, we're not we're not really a consumer of the water. So I think the province is much more concerned about the consumers of water and when we think of it it's more in terms of.

John Harry Kousinioris: It's more the Bow River in southern Alberta that flows through Calgary that they're concerned about. There isn't one in place for north Saskatchewan, which is where Obrezzo and Bighorn facilities are actually located. So it's an agreement to sort of work cooperatively to make sure that, as the carrier of the water, you know, we're supportive in whatever manner needs to be the case.

Speaker Change: A populous sort of industrialized.

Speaker Change: Water based and it's more of the bow River sort of in southern Alberta that flow through Calgary that Theyre concerned about there isn't one in place for the North, Saskatchewan, which is where our breadth and depth of corn.

Speaker Change: Facilities actually are so it's an agreement to sort of work cooperatively to make sure that as the carrier of the water.

Speaker Change: We're supportive in whatever manner needs to be the case in terms of the hydrology I would say this.

John Harry Kousinioris: In terms of the hydrology, I'd say, you know, the soil is probably dry, although I think Patrick, you being here in southern Alberta, we've had a bunch of wet snow over the last few days. I think today's the first sunny day we've seen in quite a while. You know, the snowpack isn't bad. It's about, I would say, a bit over 80 percent of what a normal would be.

Speaker Change: Soil is.

Speaker Change: Dry, although I think Patrick you being here in southern Alberta, We've had a bunch of wet snow over the last few days I think today's per study data we've seen in quite a while.

Speaker Change: The Snowpack isn't bad it's about I would say a bit over 80% of what kind of average would be it is kind of looking to be at least from a water perspective broadly the same as 2023 wells and then I think it's also important to remember that the north sketch win is a bit more glacier fed so so it's less.

John Harry Kousinioris: It's kind of looking to be, at least from a water perspective, broadly the same as 2023 was. And then I think it's also important to remember that north Saskatchewan is a bit more glacier fed. So it's less challenged by kind of where the snowpack is in the moment. So when we look at kind of the way the water year is shaping up in Alberta, I'd say not much different probably than last year and better than we are seeing in Washington state and certainly British Columbia, which are for sure dry, I would say.

Speaker Change: And the less challenged by kind of whereas the snowpack in in the moment. So when we look at kind of the way the water you're shaping up in Alberta, and I'd say not.

Speaker Change: Much different probably the last year and better than we are seeing in Washington State and certainly British Columbia, which are for sure dry I would say.

Patrick Kenny: Okay, that's great. And yeah, let's hope the white stuff disappears this week. All the best in retirement, Todd. Congratulations.

Speaker Change: Okay, that's great.

Speaker Change: Let's hope the weight stuff disappears. This weekend all the best in retirement congratulations.

Patrick Kenny: And well, we'd like you to stick around for a bit, Patrick. Thanks, Patrick. Thank you. And as a reminder, if you do have a...

Speaker Change: Well, we'd like it to stick around for a bit Patrick.

Speaker Change: Patrick Patrick.

Carmen: Thank you. And as a reminder, if you do have a question, simply press star 11 on your telephone. One moment for our next question, please. And it comes from the line of Chris Varcoe with the Calgary Herald. Please proceed.

Speaker Change: Thank you and as a reminder, if you do have a question simply press star one one on your telephone.

Speaker Change: One moment for our next question please.

Chris Varcoe: Good morning, John. On your decision to halt the four projects in Alberta, what would it take for TransAlta to bring any of them back? Or are they permanent? So, good morning, Chris, and thank you for the question.

And it comes from the line of Chris <unk> with Calgary Herald. Please proceed.

Good morning, John on your decision to halt the four projects Berta what would it take for transalta to bring any of them back or are they permanently shelved.

John Harry Kousinioris: So, one of them is permanently shelved, which is the Ripplinger Wind Farm, which was a sizable wind farm, kind of on the western fringe, southwestern fringe of the Rockies. And it is within, I think it's a 35-kilometer exclusion zone near the mountains that have been set. So that is a project that we will not be proceeding with. The other projects are on hold. They're not; they're not canceled.

John: So good morning, Chris and thank you for the question.

John: So one of them is permanently shelved, which is the the ripplinger wind part, which was the sizeable windfarm kind of on.

John: The western fringe southwestern fringe of the.

John: Of the Rockies that is within I think it's a 35 kilometer exclusion zone near the amounts that have been set so that is a project that we will not be proceeding with the other projects are on hold they're not they're not canceled.

John: Team is working to preserve them and make sure that as.

John Harry Kousinioris: The team is working to preserve them and make sure that as soon as we get the kind of clarity that we need from the regulatory process, and Blain mentioned this earlier in our call, a sense of the fidelity of the price signal as we go forward, there are things that could be resurrected and investments that could be made. They're sort of novel. Two of them are more novel.

John: As soon as we get the kind of clarity that we need from the regulatory process and Blaine mentioned this earlier in our call a sense of the fidelity of the price signal.

John: As we go forward there are things that.

That could be resurrected and investments that could be made there.

John: Sort of novel.

John Harry Kousinioris: One of them is a wind farm, but it does have a merchant component to it after the contract expiring period. The other two projects were a peaking gas unit, which would supplement what we're looking at doing with Harlan, but the Harlan acquisition, I think, meets the need for us. And then finally, the other one was a very large storage facility west of Calgary, also merchant. And we hear potential for certain types of services being procured by the province to help with the stability of the grid that could incentivize that project being built.

John: Two of them are more novel one of them is a wind farm, but it does have a merchant component to it after the the contract expiry period. The other two projects were peaking gas.

John: Unit, which would supplement what we're looking at doing with Heartland, but the Heartland acquisition I think meets the need for US and then finally the other one was a very large storage facility west of Calgary also merchant and we hear potential for.

John: Certain types of services being procured by the province to help with stability of the grid that could incent that project being built but look we're very careful with our shareholders' money and we're not going to we're not going to invest in these kinds of projects unless we have.

John Harry Kousinioris: We're very careful with our shareholders' money, and we're not going to invest in these kinds of projects unless we have a good level of comfort that our return expectations are going to be met. And it's a little opaque right now. Two last quick questions.

John: Good level of comfort that our return expectations are quite different and it's a little opaque right now.

Chris Varcoe: Back in 2021, you mentioned that TransAlta was examining carbon capture and storage for potential adoption at Sundance 5 at some point. And I know that Heartland has the Battle River carbon project that is also on the book. I'm wondering right now, what are your current thoughts on the potential of CCUS in Alberta, but also the challenge?

John: Two last quick question back in 2021, you'd mentioned that trends out to what's examining carbon capture and storage for potential adoption at Sundance five at some point.

John: And I know that Heartland has the Battle River carbon hub project that is also on the books.

John: I'm wondering right now what are your current thoughts on the potential of <unk>.

John Harry Kousinioris: Thank you. Thank you. Thank you.

John: But also the challenges to them.

John Harry Kousinioris: Yeah, I think CCUS is going to be a very important tool that our country and other countries are going to need to use to decarbonize emissions. Our view is that the best use for CCUS is in large industrial processes, whether it's the petrochemical industry, just high emitting but very large scale industrial processes where there's a need to reduce emissions and decarbonize.

John: Yes look I think.

John: I think Cc U S is.

John: Going to be a very important tool.

John: Our country and other countries are going to need to use to decarbonize.

John: <unk> our view is that the best use for <unk> and large sort of industrial.

John: Whether it's the petrochemical industry.

John: It's just high emitting, but very large scale industrial processes, where there is a need to.

John: Reduce emissions and decarbonize, the kind of scale of investment required makes sense.

John Harry Kousinioris: And the kind of scale of investment required makes sense. We were a little bit leery of CCUS investments for conventional power plants because we think that's a bit more challenging, I think, from an economic perspective. And I don't think our view has changed on that.

John: <unk>.

Speaker Change: We're a little bit leery of.

Speaker Change: Ccs Ccs investments towards sort of conventional power plants, we think thats a bit more challenging I think from an economic perspective, and I don't think our view has changed on that end and when we were looking at the Sundance Five project, which you rightly pointed out we set aside.

John Harry Kousinioris: And, you know, when we were looking at the Sundance 5 project, which you rightly point out, we set aside, you know, we were getting to the point where the cost of the CCUS was going to be significantly greater, understanding and also with technological uncertainty than actually the retargeting was, so it's just hard to make that work from an economic perspective. I think there's better, U.S.

Speaker Change: We were getting to the point, where the cost of the Cc U S.

Speaker Change: Going to be significantly greater.

Speaker Change: Notwithstanding.

And also with technological uncertainty than actually the Repowering was so so it's just hard.

Speaker Change: To make that work from an economic perspective, I think there's better uses for <unk> at least that's our view right now pending a break subsequent.

John Harry Kousinioris: So at least that's our view right now, pending a break of some sort. Finally, I'm just wondering, given the changes that are going on in Alberta right now in the power market, how do you view making investments in Alberta versus the United States or Australia or other parts of Canada? Yeah, I, I, look, I, it's interesting.

Speaker Change: Finally, I'm just wondering given the changes that are going on in beta right now in the power market, how do you view, making investments in Alberta versus the United States or Australia or other parts of Canada.

Speaker Change: Yes.

Speaker Change: Look.

John Harry Kousinioris: I would say our return expectations or the returns that you see in the markets are rather similar in all three jurisdictions. So it's not so much because of the objective returns associated with the projects; it's more for us a question of opportunity, and importantly, certainty. So, you know, right now, the markets that we're dealing with in the United States are more, I would say, static. And, and I think we have a lot of certainty associated with making investments there. In Western Australia, we have very little merchant exposure.

Speaker Change: I would say.

Speaker Change: Our return expectations are the returns that you see in the markets are broadly similar in all three jurisdictions. So.

Speaker Change: It's not so much.

Speaker Change: As of the.

Speaker Change: But it objective returns associated with the project, it's more for US a question of opportunity and importantly, certainty. So so right now.

The markets that we're dealing with in the U.

States.

Speaker Change: There are more I would say static and.

Speaker Change: And I think we have a bunch of certainty associated with making investments there in western Australia, we have very little merchant exposure would be typically all of our assets and the full return of and on capital comes from.

John Harry Kousinioris: I mean, typically, all of our assets, and the full return of it on capital comes from our customer during the contract period that we have. So it's, we don't have any of that merchant exposure after the contracted period because, for the remote, remote sites, there's no other place to sell the power. So you have all of your kind of de-risk economics provided during the contract period.

Speaker Change: Our customer during the contract period that we have so we don't have any of that merchant exposure. After the contracted period is that because of remote remote sites. There's no other place to sell the power. So you have all of your kind of Derisked economics provided during the contract period and look Alberta has high growth.

John Harry Kousinioris: And look, Alberta has high growth, you know, high income levels, we're seeing population migration, industry growth, there's a lot of positive things that electrification is impacting all of these jurisdictions. It's just as we are looking to sort of adjust the market structure in the province. It's a bit more uncertain than some of our other markets, and we just need to get a bit of clarity, which I expect we will get in the coming year, two years, three years, and then we'll be able to have, I think, the confidence that we need to reevaluate being in the. Thank you.

Speaker Change: High income levels, we're seeing population migration industry growing there's a lot of positive things that electrification is impacting all of these true jurisdictions. It's just as we are looking to sort of adjust the market structure in the province.

Speaker Change: More uncertain some of our other markets and we just need to.

Speaker Change: I've got a bit of clarity, which I expect we will get in the coming year or two years three years, and then we will be able to have I think the confidence that we need to reevaluate being in this jurisdiction.

John Harry Kousinioris: And look, the point we make is the market does need to evolve a bit. So that's not a bad thing, it's not, you know, it is. It's an understandable place that we find ourselves in. Let's put it that way.

Speaker Change: Thank you and look at.

And our view is the market does need to evolve a bit. So so that's not I thought it is.

Speaker Change: It's an understandable place that we find ourselves at let's put it that way.

Chiara Valentini: Thank you, and as I see no further questions in the queue, I will turn the conference back to Ms. Valentini for closing remarks.

Mr. Balentine: Thank you and I see no further questions in the queue I will turn the conference back to Mr. Balentine for closing remarks.

Chiara Valentini: Great. Thank you, Carmen. Thank you, everyone. That concludes our call for today. If you have any further questions, please don't hesitate to reach out to the TransAlta Investor Relations team. Have a great Friday and a great weekend. Thank you.

Balentine: Great. Thank you Carmen. Thank you everyone that concludes our call for today. If you have any further questions. Please don't hesitate to reach out to the Transalta Investor Relations team have a great Friday and a great weekend. Thank you.

Carmen: And this concludes today's conference call. You may now disconnect.

Speaker Change: And this concludes today's conference call you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.