Q2 2025 TransAlta Corp Earnings Call
Yeah.
Good morning, My name is Livia and I'll be your conference operator today at this time I would like to welcome everyone to China.
The Corporation's second quarter 2025 results conference call.
All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there'll be a question and answer session. If you would like to ask a question. During this time simply press star one on your telephone keypad. If he would like to withdraw your question. Please press star one again. Thank you. Mr. Harris you may begin your conference.
Thank you Olivia good morning, everyone. My name is Stephanie Paris, and I am the vice President of Investor Relations and corporate strategy at Transalta.
To Transalta second quarter 2025 conference call.
With me today are John Christen, Hjorth, President and Chief Executive Officer, Joel Hunter, EVP, Finance, and Chief Financial Officer, Blaine Venmo, EVP commercial and customer relations and Nancy Brendan EVP legal and external affairs.
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 a 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 detailed further in our MD&A and incorporated in full for purposes of today's call.
All amounts referenced are in Canadian dollars, unless otherwise noted yeah, I know and I asked her S terminology used including adjusted EBITDA and free cash flow are reconciled in the MD&A for your reference.
On today's call, John and Joe will provide an overview transalta as quarterly results. After these remarks, we will open the call for questions with that I will turn the call over to John.
Thank you Stephanie good morning, everyone and thank you for joining our second quarter conference call for 2025.
Part of our commitment towards reconciliation I want to begin by acknowledging that our company operates on the traditional territories of indigenous peoples across Canada, Australia, and the United States we.
We recognize the rich and diverse histories cultures and contributions of the first nations in the REIT May T Aboriginal and native American communities and it is with gratitude and respect that we think that people who have lived on these lands for generations for reminding us of the ongoing histories that precede us.
Transalta delivered exceptional results during the second quarter.
Our Alberta portfolio as a hedging strategy and active asset optimization generated realized prices well above spot prices, while our hydro and wind assets provided significant environmental offsets to our gas fleets carbon compliance obligation highlighting the value of our diverse and integrated generating fleet we were.
Also pleased with the performance of our contracted fleet, which exceeded our expectations.
During the quarter, we delivered adjusted EBITDA of 349 million free cash flow of $177 million or <unk> 60 per share and average fleet availability of 91, 6%.
We also successfully re contracted our millington, one melanchthon too and Wolfe Island wind facilities in Ontario.
The new contracts will replace the current energy contracts for the three wind facilities when they expire extending their respective contract dates to 2031 from a length in one end to 2034 from a lengthened to invoke pilot.
Wholesale electricity prices in Ontario are rising signaling a growing tightness in the supply and demand balance in the province, which sets our fleet up well for re contracting in the next decade.
We continue to engage directly with the government of Alberta, and the ISO on the Alberta datacenter strategy and their approach to large load integration as well as the restructured energy market design or ramp.
In June the ISO release details on phase one of its approach to data centers, which involved the allocation of 1200 megawatts of system capacity for datacenter proponents within the province, including trends out.
The ISO has now commenced work on phase two of its data center strategy, which will establish the framework for incremental data center development in the province.
The government of Alberta continues to express their commitment to the development of the datacenter industry in a manner that enables investment while maintaining an affordable and reliable electricity system.
And we remain confident that the province will develop a framework that will support our datacenter ambitions, which in turn will see significant investment dollars come to Alberta.
Okay.
Turning more specifically to the work that we're doing in realizing the value of our legacy generation sites. We're pleased with the progress that we're making in our Alberta datacenter strategy and the associated commercial negotiations, which now reflect the isos approach to large load integration.
<unk> currently expects demand transmission service contracts to be executed in mid September which will secure each proponents of access to system capacity.
We continue to work closely with our Counterparties and are progressing towards the execution of a datacenter memorandum of understanding in relation to our system capacity allocation.
We're excited about the data center opportunity in Alberta, both for the meaningful investment it brings to the province as well as the anticipated increase in load, which we expect will rebalance. The current oversupply of generation in the province, an added benefit for our diverse Alberta portfolio.
At our Centralia site, we're actively engaged in commercial negotiations and continue to target executing a definitive agreement before year end.
We expect to be able to share detailed development plans for centralia in the coming months as we firm our plan forward for the site I'll now pass the call over to Joel.
Thanks, John and good morning, everyone. We are pleased with our second quarter operational and financial performance and remain confident in our ability to meet our 2025 guidance range during.
During the quarter, we generated $349 million of adjusted EBITDA, which was $33 million higher than the second quarter of 2024 due to favorable ancillary service pricing the use of environmental and tax attributes in Alberta, and the optimization of our assets to capture price volatility in Alberta and at our Centralia site in Washington State.
Turning to our segmented results relative to the same period in 2024.
Hydro segment, adjusted EBIT increased to $126 million relative to $83 million last year due to higher intercompany sales of emissions credits to the gas segment to fulfill our 2020 for GHT obligation as well as higher production and ancillary prices.
The wind and solar segment produced adjusted EBITDA of $89 million in line with the second quarter 2024, primarily due to higher environmental and tax attributes revenue in Alberta that was offset by lower tax attributes revenue from our Oklahoma assets and lower Alberta power pricing for merchant wind fleet.
And the gas segment, adjusted EBITDA decreased to $128 million from $142 million in 2024, mostly due to lower realized power prices in Alberta, and higher carbon in natural gas pricing, which was partially offset by the addition of the Heartland and previously mentioned higher quantity of internally generated emissions credits utilize the <unk>.
Well a portion of our 2020 for ghd obligation.
The energy transition segment delivered adjusted EBITDA of $19 million, a $17 million increase year over year due to higher market optimization benefits and higher availability of our Centralia facility, which had an extended turnaround in the second quarter of last year.
Energy marketing adjusted EBITDA decreased by $13 million to $26 million, primarily due to comparatively subdued market volatility across north American natural gas and power markets and lower realized settle trades in the quarter compared to last year.
Corporate adjusted EBITDA was in line with last year at $39 million largely due to increased spending to support our strategic and growth initiatives and the addition of corporate costs related to the acquisition of Heartland.
As a reminder, our adjusted EBITDA excludes the impact of ERP costs is the integration is not reflective of ongoing operations or the performance of our operating assets.
Overall this strong performance generated free cash flow of $177 million in the second quarter in line with the same period last year.
Our higher adjusted EBITDA was offset by higher sustaining capital expenditures and our gas fleet during the quarter as well as higher net current tax and interest expenses.
Turning to the Alberta portfolio, the second quarter spot price averaged $40 per megawatt hour, which was lower than the average price of $45 per megawatt hour in 2024.
The decline year over year was primarily due to incremental generation from the addition of new gas when its source supply in the province, as well as benign weather.
Throughout the quarter, we deployed hedging strategies to enhance our portfolio margins and mitigate the impact of lower merchant power prices and realize the benefit from approximately 1900 gigawatt hours of hedges at an average price of $70 per megawatt hour, representing a 75% premium to the average spot price.
In addition, our hydro fleet delivered an average realized merchant price of $82 per megawatt hour or 105% premium to the average spot price, while the gas fleet realized a 55% premium to the average spot price.
Our merchant wind fleet, which cannot be used as firm power for hedging activities realized an average price of $23 per megawatt hour.
We're able to deliver additional ancillary volumes across the Alberta fleet in the quarter, our average realized price for ancillary service pricing settled at $42 per megawatt hour, a 5% premium to the average spot price.
Despite relatively benign weather in the quarter, which resulted in lower spot power prices, we captured additional margins by filling a portion of our higher price hedges with purchase power when prices were below our variable cost production, leading to an overall realized price per megawatt hour produced a $111.
Looking at the balance of the year, we have approximately 4300 gigawatt hours of our Alberta generation hedged at an average price of $69 per megawatt hour well above the current forward curve of $48 per megawatt hour.
Going forward, we expect to continue to optimize our fleet and reduced production and low priced high supply hours by fulfilling our financial hedges and customer requirements with open market purchases.
Looking at next year, our team has increased our hedge position to approximately 7000 gigawatt hours at an average price of $67 per megawatt hour, which remains well above current forward pricing levels I will now turn the call back over to John.
Thank you Joel.
We remain focused on the following priorities for 2025 <unk>.
First delivering adjusted EBITDA and free cash flow within our 2025 guidance ranges second improving our leading and lagging safety performance indicators, while achieving strong fleet availability.
Third maximizing the value of our legacy thermal energy campuses by capturing the opportunity presented in securing a data center customer at Alberta thermal as well as the coal to gas conversion at Centralia.
Fourth successfully pursuing any strategic M&A opportunities that may arise.
Fifth maintaining our financial strength and flexibility, which Joel and his team advanced through the extension of our credit facilities in July and finally implementing the upgrade to our ERP program.
I believe transalta offers a compelling investment opportunity.
Our safe and reliable operator with strong cash flows underpinned by our diverse.
Diversified hydro wind solar and gas portfolio located across three countries and complemented by our leading asset optimization and energy marketing capabilities.
We're a clean electricity leader with a focus on tangible greenhouse gas emission reductions as we remain on track to achieve our ambitious 2026 C O two emissions reduction target there.
There is significant and growing value in our legacy thermal sites, which our team is actively working to repurpose to meet the growing need for reliable generation in the jurisdictions in which we operate we remain disciplined in our approach to growth focused on delivering value to our shareholders within our core jurisdictions as we work to diversify our portfolio.
And increase the stability and contracted most of our cash flows.
And our company also has a sound financial foundation, our balance sheet is flexible and we have ample liquidity to pursue and deliver multiple growth opportunities along with the ability to also return capital to our shareholders through dividends and share repurchases.
Finally, and most importantly, we have our people our people are our greatest asset and I want to thank all our employees and contractors for their commitment and setting the company up for success in the second half of 2025. Thank.
Thank you I'll now turn the call over to Stephanie.
Thank you John.
Olivia would you please open the call for questions from analysts.
Ladies and gentlemen.
At this time, you will need to press star one on your telephone and wait for your name to be announced soon.
A question simply press Star one again, please standby, while we compile the Q&A roster.
My first question is coming from the line of Robert <unk> with Deutsche Bank. Your line is now open.
Hello Aaron.
First question's on the data center discussions with your customers there got it what are the gating factors.
To successfully executed Mou there as well as additional capacity does come up for grab just given the fact that two developers have dropped out do you have I will call. It enough demand in pocket to go after those as well.
Good morning, Robert.
In terms of sort of the additional stage gating items.
It isn't that they're sort of has any significant impediment to us moving forward. It just takes time for us.
Finalized all of the terms associated with the Mou you know, we're working with our customers. They have work that they're doing as well.
We had a shift in the approach that the ISO was taking around data centers and all of that just takes time, but what I can tell you is that we're very very pleased with the progress that we're making and are confident in the project as we're envisioning it going forward.
In terms of additional capacity look we're focused on the capacity that's been allocated to us and we're also focused on what subsequent subsequent stages of development could occur at the tight that the site and that takes a bit of time to think through with our counterparties. So those would be the main the main things right now I'm not.
Seeing any significant impediments were just working through.
Alright, I appreciate that.
Then maybe turning attention to south of the border mid life natural gas M&A can you update us on how you're thinking about that market and.
Is this a.
An increasing focus for the organization.
The short answer is yes. It is an increasing focus for the organization, we're actually seeing excuse me quite a few opportunities.
South of the border, but actually in places also north of the border I would say.
Around NAV.
Natural gas our focus is obviously on facilities that would be in the core markets that we're focused on which is the west in particular, the Pac northwest and also I would say the desert southwest.
There is also opportunities potentially in Ontario that we're looking at so it is very active.
For our team we like the multiples that we see those assets being traded at right now they they worked for us and given our energy marketing expertise.
They really are a priority, but I would say we are we are also seeing selectively opportunities around renewables as well as there has been a bit of compression in the multiples both on the renewables and at the same time a bit of an increase.
And the multiples on gas so to a certain point, they actually overlap a little bit of Joel out or if you want to add anything to that I think John you yourself are there any yes. It is.
Is a busy time for our team.
Excellent. Thank you.
Thanks Robert.
Thank you.
Our next question coming from the line of Maurice Choy with RBC capital markets. Your line is now open.
Thank you and good morning, everyone. Just a quick one on phase one.
So it just my broad question here it sounds like you have really good momentum here towards securing your Mou.
I'm just curious if the timeline has changed.
In terms of your expectations since the Q1 call.
It sounds like you would have been able to announce an mou on his call. It pent up in a position to move that acreage position to mid September.
And then just more broadly do you think Alberta is capable of delivering power to.
Gigawatt scale data centers, even if it's over phases and what would that require thank you.
Yes.
On the first point look when we talked about sort of mid year, roughly speaking to get an Mou done that was on the basis of the best knowledge, we had at the time.
In that first quarter, we are actively involved.
Right now we are making progress.
There has been an evolution and kind of the way that we envisioned the project developing.
Developing not just in terms of our immediate allocation, but over time and that just takes time.
To work through.
We're diligently progressing that and and we do expect to to advance that in a very orderly way and in the coming period.
And on your second question, yes on the second part on delivering.
Additional megawatts here look.
All of the discussions that we're having all of the discussions that we're having with the ISO I think the vision that the province has on seeing incremental load come into the province, sand and develop a healthy and vibrant data center industry in the province, I think remains unabated I would say we're <unk>.
Focus on bringing subs.
Subsequent phases of of load on our side, we have all these great attributes at our facilities there to see it through we're not alone in the province in that regard and I think we're confident I know our company is confident that we will see pretty vibrant datacenter industry develop in the province over time. The other thing I would say is.
This shouldn't be lost on people. It will serve to also rebalance load in the province, which is a particular benefit I would say to a company like ours that has that diversity.
Our fleet that can benefit through the portfolio and the great optimization team that we have.
Sounds great. Thank you very much.
Sure.
Thank you.
Our next question coming from the line of thank you.
Women salmon with BMO capital markets. Your line is now open.
Hi, Thanks, Good morning wanted to stand.
Same topic.
And maybe John can you elaborate you mentioned.
Versus Q1, or maybe a different timeline.
The project Mitch.
Materializing.
Definitely then how you envision can you can you expand on that a bit is at that size counterparty.
Just any additional details would be helpful.
No it isn't about counterparties or even particularly about size. It's more around you know getting clarity in June from the ISO in terms of how the phase was going to actually play out.
Up until that time, we were not really guessing, but sort of anticipating the pathways that it could take and how our facilities could fit into that and we got clarity.
A month and a bit ago, and we're working with our customers to kind of realize it now that we've got clarity and also spending time with them to figure out what subsequent stages look like and what the timing would be so it's not.
It's not that there is a deviation or a significant change in in the process that we're doing.
It takes it just takes time to get it done in the way that makes sense for everybody, but we remain very confident in fact, I'd say more confident now and very pleased in the process that we're making.
Okay, that's good to hear.
I know you mentioned that the mix of temporary Dts execution.
But that doesn't suggest from your eyes that an Mou is around.
That timeline that sounds like you're just you're timelines have shifted a bit from your initial expectations.
Yeah, that's right I mean, we're working on so the Dts execution timeline is something we're obviously aware of because we're focused on securing our position. So so we will be entering into that contract on that date, but but honestly our emery. Our Mou is working kind of in a pathway that is separate from a timing perspective to.
So that GTS contract component of the given from our perspective, if I can if I can put it that way.
Okay got it.
And maybe just the last one is it Sam topic areas.
Yes.
What you have here the allocation phase one year, you have shored up.
Mou and in contract.
Is there additional opportunity from Keith.
Keep those or other assets too.
At.
Engaging.
Additional ppas with data centers that are built at need power.
Which says strategy, maybe sooner flux when youre taking.
Yes.
What I would say to that is the way that we are working with.
With our customer right now would would sort of see us at least in the immediate phase being a comprehensive.
<unk> solution for the customer that we're working with so we're not currently envisioning that were breaking that upper parceling. It up at this point in time.
Okay got it thats useful thank you.
Yes.
Thanks.
Our next question coming from the line of John <unk> with TD Cowen. Your line is now open.
Hi, good morning, everybody.
Maybe just starting with potential fleet investments in Alberta.
And that's in the context of the data center opportunity in the scenario of a material market tightening.
The older coal to gas units and presumably we wouldnt see them running at 90% capacity factors.
Outside of Q3, what kind of normalized capacity factor could we see from the Sundance or a share net assets. If the market does tightened by 1.2, Gigawatts, let's say and are.
Are there any additional investments that you need to make on your end to maintain that level of utilization.
Yes, good morning, John So look if.
It depends on the pace at which the data centers come into the province, but but in the scenario that you described where the full one two gigs ends up coming into the province.
Reliability in the province would absolutely require our fleet to be running at relatively high.
Capacity factors it doesn't it doesn't take too much for the reserve margin in the province to actually tighten up with the result that our units have both significantly higher capacity factors and also an associated.
Increase in the realized spot price in the province beyond I would say what the forward curve is currently indicating in terms of capital investment that we would need to make sure that we do this so that we've got the units in the appropriate kit in the context of also our own datacenter obligations.
It is relatively modest I would say it.
We're not talking.
The numbers that are beyond kind of tens of millions of dollars normal course sustaining capital for the units to make sure that they are able to to run and then what is required on the part of our company, which is work that we're doing now is envisioning what are the 20 <unk> look like as we get into the next.
A decade to meet in an efficient matter load growth over that period of time so.
I think we're in a good place because we've got a lot of optionality around our fleet.
And it is in <unk>.
Physically operationally in a very good place.
Okay. Thanks for that detail and then maybe on your comments around the phase two expansion and engaging with with Counterparties there.
Just wondering what what those discussions are like so far in terms of the timing that customers are hoping to see.
And what kind of initial dialogue, you've had with government or so.
Regarding phase III, how theyre approaching at the pace that could be achieved on that that consultation.
Given the market clarity there.
Yeah, I'll, maybe start with that.
<unk> part of your question and then flip to that to the front part of the question John look the discussions with the ISO and even the government are at a I would say at a relatively early phase.
We understand that they want to encourage the development of the industry, while making sure that we have reasonable prices in the province at an appropriate level of reliability that makes a lot of sense to us in terms of the way that they're progressing that so.
Work in the discussions are at an early phase, but I think in principle.
That makes a lot of sense and is very logical in terms of timing I can tell you that we're encouraging them to do it as.
As promptly as they possibly can I mean, ideally we would end up getting some certainty before the end of the year, maybe it drifts into the early part of next year, but I think it's important from a planning perspective for companies like ours, given where the supply chain is if you see what I'm, saying in terms of our need to envision the 20, <unk> and beyond to be able.
To have that certainty to get the planning that we need.
To move to move forward, the ISO understands that and they're acutely aware of that going forward in terms of our discussions with our.
Customers with respect to that.
There isn't a lot that I can candidly say.
On the call other than it is a focus area for them. They do have a view on what our ramp up could potentially be and we're working with them to be able to plan that up and make sure that we serve their needs in an appropriate in an appropriate manner as we go forward.
Okay. That's great. Thanks, and maybe one last one on on carbon credit sales those were up year over year and I. Appreciate some of that's a function of the tier program structure.
Alberta has said it will freeze.
Tier price obviously, that's in conflict with the minimum national carbon price from the federal government. How are you thinking about your carbon credit.
Our portfolio more broadly and then.
Bit of an aside but does that remain a tool in the data center discussion.
Whereas the carbon aspect of that data center conversation less relevant right now.
Yes look.
I would be remiss, if I started sort of predicting where kind of the province will end up from a tier perspective at the 95 dollar level, where we are today versus kind of the escalation that is required from a policy perspective at the federal government.
For much of the planning that we do we tend to think of a continuation of of carbon pricing I think that sort of a conservative view that we take in.
In terms of the fleet, but but I think that's to be determined to be candid John.
In terms of our.
Your mental attribute portfolio in the province, it is a real advantage that we have both on the hydro side and on the wind side.
It is able to provide a meaningful reduction in the impact of the emissions that we have on our fleet, which tends to be a little bit less efficient than some of the new facilities that are that have been built but it basically nullifies kind of that that differential.
Between ours, and those kind of facilities and the values are pretty significant so we see a lot of value in those attributes will continue to.
I think youll, probably the rate where it is monetize.
Those assets as we go forward and.
Use them to ensure the competitiveness of our fleet, but also in a cost effective way to meet the needs of our datacenter customer going forward. So it.
It's a real asset I would say that we have.
Okay I'll leave it there thanks for taking my questions.
Thank you.
Yeah.
Thank you. Our next question coming from the line of Mark Jarvi with CIBC. Your line is now open.
Yes, good morning.
Are you able to state how much allocation you received in phase one.
Mark we haven't stated how much allocation, we have and where we're not in a position to actually.
Give that right now what I would say is we're comfortable with it and we're working around it and our customers are also comfortable with it and particularly in the context of how they envision the development of our site working forward and.
Our focus with them is as much on subsequent stages as it is on the on the base amount.
And then have you.
Any changes in terms of which path that you think you use to serve that.
Customer on the allocation for phase, one and I think even before a key pills.
Two was there is it more thinking three year, combining with hydro because you've kind of made a comment about the hydro offset as being something that might be actually can use for your customer.
Yes, so I think theres sort of two parts to that.
Question I think one of them would be in terms of the physical location for the data center that would very much be in.
In and around our T cell site that is the work that we're doing in all of the.
Everything from.
Permitting right through to kind of geotechnical work, it's all with a view to developing.
The physical site there for the center and as you know it requires the largest footprint to be able to do that in terms of how we serve.
The load we can serve it more broadly from I would say our entire fleet. It isn't just wedded to to keep bills too as we think of subsequent phases it might be a little bit potentially a little bit more unit contingent if I can put it that way, but right now we absolutely have our entire based on the.
Structure of phase one we absolutely have our entire portfolio to be able to use to basically serve the needs of our customer going forward, which is really really helpful. It's great having that portfolio.
No that's great to hear and then.
Did you need clarity on phase two take occurred the standards, even with your customer or can you do it in stages, where using the first allocation you can move to commercial.
Final contract and then have sort of a.
Ability to contract beyond that for subsequent megawatts.
I think I think it's more of the if I remember your yield that your statement more of the latter part in other words, where.
We're looking at.
So the Finalization of our MLR you will not require the finalization of phase II of the consultation process I think we have a number of tools to be able to deal with.
And a subsequent staging going forward. So hopefully that gives you a sense.
No that's helpful and lastly for me on this topic Harris.
Yeah.
The decision not to try to buy allocations from other people.
Obviously, it would have an upfront payment for that but versus having to invest to bring in new capacity. This year, new load, which I believe is the criteria that will come through in <unk>. So I'm just trying to square those two opportunities there to get as much as you can now through phase one versus a bit more of a capital intensive opportunity set through phase II.
Yes look I'm not going to mark kind of.
Sort of speculate or get into discussions on kind of the reallocation of the megawatts. It ended up taking place going forward I look what I would say is I agree that the.
The second phase is going to like our working assumption is it's going to require incremental generation to be provided but what I would say in response to that and you know this is a point that that were working to speak to the government and the ISO about debt underutilized facilities are akin to incremental generation being brought on.
In the in the Province, you know if something has a capacity factor of 20%. It has a lot of room to provide additional.
Generation to serve the needs of a data center customer whether it's in front of the fence are behind that that's candidly.
To be able to see it through so that's just.
Nothing that we need to be very mindful of and is certainly a sticking point for us.
And then just one last one.
The units that you had earmarked for the Pinnacle project are those things that you can repurpose for a data center customer.
Potentially yes.
Okay, great. Thanks.
Thank you.
Thank you. Our next question coming from the line of Julien Dumoulin Smith with Jefferies. Your line is now open.
Hi, This is <unk> on for Julian Good morning, everyone maybe.
Maybe just a follow up on John's question regarding the developing phase two discussion.
Are the potential Counterparties you are speaking with the same kind of subset and type of customers at the same types of goals that is.
Phase one.
And do you see discussions progressing there similarly to the ones you've had over the past year.
Yes, good morning Tanner.
I would say is that our discussions are.
With a.
Singular I would say.
Our customer and they would.
Encompass not only sort of phase one but phase II.
Okay, great. Thanks, and then just wanted to follow up on your Centralia commentary.
The extended timing do you still view the opportunity through the lens of the spin.
<unk> singular customer with a well defined development plan on site or are there at this point competing visions or counterparties under deliberation.
Yes.
So the work that we're doing at Centralia is with respect to meeting the needs of a of a singular customer in that jurisdiction and it is around literally devoting the entire facility.
To that customer.
On a core converted to natural gas fire generation basis.
For an extended period of time, it would be sort of a long term power purchase arrangement or tolling agreement for that facility.
There would need to be capital spend to do the conversion from the call to the natural gas, but it literally is in terms of the existing facilities. We have on site all around Centralia unit, two and how we would bring that forward having said all of that we do have a very large geographic footprint footprint in the region.
And our team is also exploring potential opportunities to add other generation they are likely because of the gas constraints at least initially more in the vein of renewables, whether that would be solar or wind or possibly even storage on site that could be for that singular customer it could be for other customers in that.
Something that is.
<unk> is developing the site is great I mean, it's about.
I don't know 80 kilometers 60 miles or so away from the city of Seattle.
It's a great footprint, we have a skilled workforce their transmission example.
To use the Canadianism, it's really at center ice of kind of the grid, there and we view the unit as being critical to the reliability of the grid and that in that part of the world.
Okay.
Fantastic. Thank you.
Thank you.
Thank you and there are no further questions in queue I would now like to turn it back to Stephanie Burns for any closing remarks.
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.
Yeah.
This conclude today's conference call. Thank you for your participation and you may now disconnect.
Okay.
Yeah.
Okay.