TransAlta Announces Transformative $2 Billion Clean Energy Investment Plan and Dividend Policy
Press Release
CALGARY, Alberta (September 16, 2019) – 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.
For more information:
| Investor Inquiries: | Media Inquiries: |
| Phone: 1-800-387-3598 in Canada and U.S. | Phone: Toll-free media number: 1-855-255-9184 |
| Email: investor_relations@transalta.com | Email: ta_media_relations@transalta.com |
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