CALGARY, Sept. 18, 2017 /PRNewswire/ - TransAlta
Corporation ("TransAlta" or the "Company") (TSX: TA; NYSE: TAC)
announced today that it has received formal notice from the
Balancing Pool for the termination of the Alberta Power Purchase
Arrangements ("PPAs") for Sundance Unit B and Unit C effective
March 31, 2018.
The termination of the Sundance PPAs by the Balancing Pool was
expected and TransAlta anticipates working closely with the
Balancing Pool to ensure the company receives the termination
payment that it believes it is entitled to under the PPAs and
applicable legislation. The expected impacts to TransAlta of the
termination include:
- Approximately $231 million in
compensation for the net book value of the assets as compared to
the Balancing Pool's estimate of approximately $171 million. The Balancing Pool's estimate
differs because it excludes certain assets which TransAlta believes
should be included in the net book value calculation.
- Increased operational flexibility, including with respect to
dispatching of generation from the affected units, maintenance and
turnaround schedules, and the timing of the coal-to-gas
conversions.
- A neutral to positive financial impact as the termination
payments will be used to repay debt maturing in 2018.
TransAlta believes that the cash flow generated by its portfolio
of coal, gas and renewable assets in Alberta will be maintained following the
termination of the PPAs.
The Balancing Pool's decision does not change TransAlta's
commitment to continue to be a low cost, reliable supplier of
electricity with over 2,300 MW of gross capacity under Alberta
PPAs, representing approximately 14% of the generation capacity in
Alberta.
About TransAlta Corporation:
TransAlta is a power generation and wholesale marketing
company focused on creating long-term shareholder value. TransAlta
maintains a low-to-moderate risk profile by operating a highly
contracted portfolio of assets in Canada, the United
States and Australia.
TransAlta's focus is to efficiently operate wind, hydro, solar,
natural gas and coal facilities in order to provide customers with
a reliable, low-cost source of power. For over 100 years, TransAlta
has been a responsible operator and a proud contributor to the
communities in which it works and lives. TransAlta has been
recognized on CDP's Canadian Climate Disclosure Leadership Index
(CDLI), which includes Canada's
top 20 leading companies reporting on climate change, and has been
selected by Corporate Knights as one of Canada's Top 50 Best Corporate Citizens and is
recognized globally for its leadership on sustainability and
corporate responsibility standards by FTSE4Good.
For more information about TransAlta, visit our web site at
transalta.com, or follow us on Twitter @TransAlta.
Forward-Looking Statements
This news release contains forward-looking statements within
the meaning of applicable securities laws, including statements
regarding: the termination of the PPAs; the net book value of the
Company's generating facilities and the amount of any termination
payment; the use of proceeds received in connection with any
termination of the PPAs; and the impact the termination of the PPAs
will have on the Company, including as it pertains to increasing
operational flexibility, including with respect to dispatching of
generation from the affected units, maintenance and turnaround
schedules and the timing of the coal-to-gas conversion. These
statements are based on TransAlta's belief and assumptions based on
information available at the time the assumptions were made. These
statements are subject to a number of risks and uncertainties that
may cause actual results to differ materially from those
contemplated by the forward-looking statements. Some of the factors
that could cause such differences include: the outcome of our
dispute relating to the net book value payable upon termination of
the PPAs; legislative or regulatory changes; and changes to power
prices or operating costs. Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect
TransAlta's expectations only as of the date of this news release.
TransAlta disclaims any intention or obligation to update or revise
these forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
Note: All financial figures are in Canadian dollars unless
otherwise indicated.
SOURCE TransAlta Corporation