CALGARY, Sept. 16, 2019 /CNW/ - TransAlta
Corporation ("TransAlta" or the "Company") (TSX: TA) (NYSE:
TAC) announces today its Clean Energy Investment Plan, which
includes converting its existing Alberta coal assets to natural gas and
advancing its leadership position in renewable energy. The total
cost of the plan is expected to be approximately $2 billion which includes approximately
$800 million of renewable energy
projects already under construction.
TransAlta's plan includes converting three of its existing
Alberta thermal units to gas in
2020 and 2021 by replacing existing coal burners with natural gas
burners. The Company will also convert two of its units to highly
efficient combined cycle natural gas units in the late 2023
to late 2024 period. The highlights of these gas conversion
investments include:
- Positioning TransAlta's fleet as a low-cost generator in the
Alberta energy-only market;
- Generating attractive returns by leveraging the Company's
existing infrastructure;
- Significantly extending the life and cash flows of the
Alberta thermal assets; and
- Significantly reducing air emissions and costs.
The Company's Clean Energy Investment Plan also consists of the
four wind projects in the United
States and Alberta that are
currently under construction. These projects are underpinned by
long-term power purchase agreements with highly creditworthy
counterparties.
The Clean Energy Investment Plan will be funded from the cash
raised earlier this year through the strategic investment with an
affiliate of Brookfield Renewable Partners, cash generated from
operations, and through TransAlta Renewables Inc. In addition to
funding the plan, the Company remains committed to returning up to
$250 million to shareholders over the
next three years through share repurchases and reducing its
corporate level debt by $400 million
in 2020.
The Company has adopted, based on TransAlta level deconsolidated
cash flows, a Debt/EBITDA target of 3.0x or less, and a dividend
policy of returning between 10% and 15% of TransAlta deconsolidated
Funds from Operations to common shareholders. The credit metrics
and dividend policy are being presented on a deconsolidated basis,
allowing investors to understand how the dividends received from
TransAlta Renewables is either being returned or invested for
TransAlta shareholders.
Investor Day
TransAlta will be hosting an Investor Day later today at
9:30 am ET during which our executive
team will discuss the announcements above in greater detail. A link
to the presentation and live webcast will be available on the
Investors section of TransAlta's website at
http://www.transalta.com/investors/events-and-presentations.
About TransAlta Corporation:
TransAlta
owns, operates and develops a diverse fleet of electrical power
generation assets in Canada,
the United States and Australia with a focus on long-term
shareholder value. We provide municipalities, medium and large
industries, businesses and utility customers clean, affordable,
energy efficient, and reliable power. Today, we are one of
Canada's largest producers of wind
power and Alberta's largest
producer of hydro-electric power. For over 100 years, TransAlta has
been a responsible operator and a proud community-member where its
employees work and live. TransAlta aligns its corporate goals with
the UN Sustainable Development Goals and we have been recognized by
CDP (formerly Climate Disclosure Project) as an industry leader on
Climate Change Management. We are also proud to have achieved
the Silver level PAR (Progressive Aboriginal
Relations) designation by the Canadian Council for
Aboriginal Business.
For more information about TransAlta, visit our web site at
transalta.com.
Forward Looking Information
This news release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws (collectively referred to as "forwarding-looking
statements"). All forward-looking statements are based on our
beliefs as well as assumptions based on information available at
the time the assumption was made. These statements are not
guarantees of our future performance, events or results and are
subject to a number of significant risks, uncertainties and other
important factors that could cause our actual performance, events
or results to be materially different from those set out in the
forward-looking statements. More particularly, and without
limitation, this news release contains forward-looking statements
relating to: the Clean Energy Investment Plan, including the cost
and associated timing; the benefits expected to be realized from
the Clean Energy Investment Plan; the source of funds for the Clean
Energy Investment Plan; the return of capital to shareholders and
reduction of corporate debt; satisfying the deconsolidated
debt/EBITDA target of 3.0x of less; and implementing or maintaining
a dividend policy of returning between 10% and 15% of
deconsolidated TransAlta funds from operations. The forward-looking
statements are subject to a number of risks and uncertainties that
may cause actual performance, events or results to differ
materially from those contemplated by the forward-looking
statements, which include: fluctuations in demand, market prices
and the availability of fuel supplies to support the conversion of
two coal units into highly efficient combined cycle natural gas
units; the satisfaction of all closing conditions associated with
the $400 million preferred share
subscription in October 2020; changes
in the current or anticipated legislative, regulatory and political
environments; environmental requirements and changes in, or
liabilities under, these requirements; and other risks and
uncertainties contained in the Company's Management Proxy Circular
dated March 26, 2019 and its Annual
Information Form and Management's Discussion and Analysis for the
year ended December 31, 2018, filed
under the Company's profile with the Canadian securities regulators
on www.sedar.com and the U.S. Securities and Exchange
Commission on www.sec.gov. Readers are urged to consider these
factors carefully in evaluating the forward-looking statements and
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.
Non-IFRS Measures
Certain financial measures identified in this news release,
including EBITDA and funds from operations (FFO), do not have a
standardized meaning under International Financial Reporting
Standards ("IFRS") and may not be comparable to similar measures
presented by other entities. Presenting these items from period to
period provides management and investors with the ability to
evaluate earnings and cash flow trends more readily in comparison
with prior periods' results and, in the case of the deconsolidated
FFO, to allow shareholders to understand how the dividend at
TransAlta Renewables is being either returned or invested for
TransAlta shareholders. These measures should not be
considered in isolation or as a substitute for measures prepared in
accordance with IFRS. Deconsolidated TransAlta FFO can be
reconciled to TransAlta FFO (as defined in the most recently filed
Management's Discussion and Analysis of the Company) by subtracting
the funds from operations of TransAlta Renewables, subtracting any
distributions made in respect of the Company's non-controlling
interests (namely, to Canadian Power Holdings Inc.) and adding back
the dividends received from TransAlta Renewables. For further
information on non-IFRS financial measures, see our most recently
filed Management's Discussion and Analysis, filed with Canadian
securities regulators on www.sedar.com and the Securities and
Exchange Commission on www.edgar.com and the Investor Day
presentation dated September 16, 2019
available on the Company's website investor centre.
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SOURCE TransAlta Corporation