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FINAL TRANSCRIPT

TransAlta Corporation

Fourth Quarter and Full Year 2017 Results Conference Call

Event Date/Time: March 2, 2018 — 11:00 a.m. E.T.

Length: 65 minutes

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TransAlta Corporation Fourth Quarter and Full Year 2017 Results

Conference Call

CORPORATE PARTICIPANTS Sally Taylor TransAlta Corporation — Manager, Investor Relations Dawn Farrell TransAlta Corporation — President and Chief Executive Officer Donald Tremblay TransAlta Corporation — Chief Financial Officer John Kousinioris TransAlta Corporation — Chief Legal and Compliance Officer CONFERENCE CALL PARTICIPANTS Rob Hope Scotiabank — Analyst Mark Jarvi CIBC — Analyst Ben Pham BMO Capital Markets — Analyst Andrew Kuske Credit Suisse — Analyst Robert Kwan RBC Capital Markets — Analyst Patrick Kenny National Bank Financial — Analyst Jeremy Rosenfield Industrial Alliance Securities — Analyst

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Charles Fishman Morningstar Research — Journalist Chris Varcoe Calgary Herald — Journalist

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PRESENTATION

Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the TransAlta

Corporation Fourth Quarter and Full Year 2017 Results Conference Call. All lines have been placed on

mute to prevent any background noise.

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 *, then the number 1 on your telephone keypad. If

you would like to withdraw your question, press the # key. If you have any difficulties hearing the

conference, please press *, then 0 for Operator assistance at any time.

As a reminder, this conference call is being broadcast live on the internet and recorded.

I would now like to turn the conference call over to Sally Taylor, Manager of Investor

Relations. Please go ahead Miss Taylor.

Sally Taylor — Manager, Investor Relations, TransAlta Corporation

Thank you, Jamie (phon). Good morning, everyone, and welcome to TransAlta’s fourth

quarter and year-end 2017 conference call. With me today are Dawn Farrell, President and Chief

Executive Officer; Donald Tremblay, Chief Financial Officer; John Kousinioris, Chief Legal and

Compliance Officer; and Brent Ward, Managing Director and Treasurer.

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Conference Call

Today’s call is webcast, and I invite those listening on the phone lines to view the supporting

slides which are available on our website. A replay of the call will be available later today, and a

transcript will be posted to our website shortly thereafter.

As usual, all information provided during this conference call is subject to the forward-

looking statement qualification which is set out on Slide 2, detailed in our MD&A, and incorporated

in full for the purposes of today’s call.

All amounts referenced during the call are in Canadian currency, unless otherwise stated.

The non-IFRS terminology used, including gross margin, comparable EBITDA, funds from

operation, and free cash flow are reconciled in the MD&A for your reference.

On today’s call, Dawn and Donald are going to review our results for 2017 and TransAlta’s

2018 goals. After these prepared remarks, we will open the call for questions.

With that, let me turn the call over to Dawn.

Dawn Farrell — President and Chief Executive Officer, TransAlta Corporation

Thanks, Sally, and welcome, everyone. It’s great to be here today to report that we finished

2017 stronger than expected, and that we have a very interesting and exciting year ahead of us.

Let me start by thanking our employees, who accomplished a lot in 2017. They did an

excellent job, and it’s a real honour to work with all of them.

Our performance significantly advanced our goal to deliver 100 percent clean power by

2025. In 2017, we focused on five goals that would strengthen our financial position and our ability

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to transform the Company. We delivered on these goals, and are ready to communicate new goals

for 2018.

We were very clear in December at our Investor Day on where we’re taking this company.

And we’ll continue to report on these themes as we move throughout the year. What’s important is

that TransAlta’s financial and operational performance on the existing fleet is now aligning with our

ambitions, and we’re feeling very strong as we enter into 2018.

Today, I’m going to give you our assessment of how we did against our 2017 goals, and I’ll

set the framework for 2018.

So starting with our 2017 goals. Last year at this time, I laid out five clear goals for the

organization. The first was to get our framework in place from transitioning from coal to gas; the

second was around commissioning our South Hedland power station in Australia; the third was to

grow our renewables platform; the fourth was to continue to execute our financial strategy; and the

fifth was all about leading in safety and environmental performance as we delivered our financial

results.

So I’m going to start this morning with our fourth goal that we set in 2017, as I believe that

this goal has been high on the minds of many of our long-term shareholders. So in short, the fourth

goal last year was to strengthen our balance sheet. And I’m really happy to report today that we

ended the year in better shape than we anticipated.

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Now first, that’s because we delivered stronger financial results in the Company over 2016.

And second because we did have an unexpected return of the Solomon plant, which gave us cash to

apply to debt, and it absolutely accelerated our deleveraging process.

Now in terms of financial performance, you’ve all seen the reports in the MD&A, but I would

just like to say a congratulations to the Company. They delivered free cash flow of $328 million, an

increase of 71 million over 2016 and a 28 percent improvement.

They delivered funds from operations of 804 million, 9.5 percent better than 2016. Our

EBITDA from generation, excluding our Canadian Coal segment, was up 13 percent year over year,

and this is tremendous. All of the businesses improved their results.

Our Canadian Coal segment was expected as we went into 2017 to have lower EBITDA due

to rising mining costs. And the good news is they were able to recover from the challenges of the

summer, which really helps us deliver a strong year.

Based on our 2017 results and what we’re expecting for 2018, we are now in the final innings

of our debt repayment program. And we have a very solid plan, which Donald is going to talk about,

to manage the scheduled maturities over the next two years.

In 2020, when the remaining Alberta PPAs roll off, we will be down to 1.1 billion in recourse

debt. That’s going to be a tremendous result. And that is absolutely the right level of debt for our

emergent coal and hydro assets, and it will give us a balance sheet that can weather any storm.

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Donald will give you more insight on how we’ll exit 2018, but I can tell you that it feels great

to be here entering 2018 with less than 3.4 billion in debt on the balance sheet and an FFO-to-debt

metric of over 20 percent, the best that we’ve had since 2011.

So let me go back to our first goal of 2017, which was all about transitioning from coal to

gas and setting up that framework. Now there’s a lot of elements to this goal, but I’ll talk about each

of them briefly.

So first of all in 2017, the team here at TransAlta advanced the game significantly by gaining

the legislative framework, both federally and provincially, that allows us to use gas in our boilers.

Their efforts have us adding 75 years of combined life to our coal facilities, and will add more than $1

billion of free cash flow. So congratulations to that team. That’s an outstanding result.

We signed an LOI with Tidewater as well, and that gets natural gas to our facilities much

more quickly than we could have ever anticipated. And it allows us to accelerate our conversion time

frame by a year. So that’s an excellent result as well.

We did gain full credit for our existing renewable assets in Alberta under the carbon regime

so that over time our existing wind and hydro assets will be able to sell carbon credits into the Alberta

market. Now depending on the price of carbon, these credits are worth somewhere between 30

million and $50 million, and they absolutely help us recover some of the lost value that occurred with

the coal fleet due to the implementation of the Climate Leadership Plan here in Alberta.

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So we think this was a very fair decision by the Alberta government, and it ensures that

Alberta can transition to a low-carbon future without undue damage to companies like ourselves that

need time to adjust to the new reality. So that was also an excellent result by the team.

We also have been advancing our discussion on the Brazeau pump storage project. Today,

we’re in extensive dialogue with the AESO on the role of dispatchable renewables and storage over

the longer term as Alberta transitions off coal.

And then finally under this one goal—this is still our first goal—we’ve been working hard to

ensure that the capacity market that’s emerging will create stable and low prices for consumers and

stable revenues for our assets.

Now there’s a lot more, as you all know, to do on this in 2018, and I’ll talk about our goal for

this at the end of the call.

So all in all when I look at the performance of the team, I give people very, very high marks

for the progress that we’ve made on our transition.

Our second goal last year was very simple. It was simply to get the South Hedland power

station built and delivering new cash flow to TransAlta Renewables, which of course we’re a 64

percent owner.

The plant is high quality. It’s running extremely well. It’s met all the conditions required to

commission and sync to the grid. Now it was absolutely disappointing to end up in a dispute with

Fortescue. This dispute will delay the start of about 30 percent of the cash flows; however, the plant

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is profitable, it’s the lowest-cost plant in the region, and it’s serving Horizon Power and there are

other customers.

So while we aren’t 100 percent of the way over the line on achieving our goal, we will give

ourselves some credit for what we did there in 2017. And we have to drive to close the gap in the

cash flows in the 2018 and ‘19 goal.

Our third goal last year was to win an RFP in the locations where we have assets. We didn’t

win in Alberta, but we have assets available to bid in the next auction or to sell to end customers. In

February, however, this year we announced that we won two wind farms in the US Northeast. The

returns on these farms are better than what we would have received in Alberta for the equivalent

capital, so we are very, very happy to have waited and been patient.

So overall, I give the team high marks for remaining disciplined and achieving our goal, even

if it meant delivering the goal in early 2018 instead of in 2017.

Our final goal in 2017 was to lead in safety and environmental performance while delivering

against our financial targets. We delivered the Company’s best ever safety performance with a total

incident frequency of 0.72, and we reduced our greenhouse gas emissions by approximately 800,000

tonnes year over year.

I’ve already talked about our financial progress, which I’m pretty pleased about. And many

of you that look at our MD&A, it’s an integrated MD&A with financial and sustainability results, and

it gives you a very comprehensive view of all the things that we do on both fronts.

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So 2017 accomplishments have set us up to be very bullish about ‘18 and ‘19. We did tell

you last year that we set a target, which we internally call the Road to 400 Million, which would have

been a lot easier if we hadn’t had to sell back the Solomon plant. But nevertheless, we’re a

determined team, and the work we’re doing through Project Greenlight and the work that we’re

doing as we transition the Company to gas has us striving for that outcome in any event. And I’ll talk

about our free cash flow goals at the end of the call.

We also feel that we’re getting closer to a time when we can look at other forms of capital

allocation, including how we think about the dividend as we transition to gas and renewables.

So in summary, 2017 was a great year and has us positioned for even greater success in

2018.

So I’m going to turn the call over to Donald, who will talk about the specific financial results,

and I’ll come back and review our goals for 2018 at the end of the call.

Donald Tremblay — Chief Financial Officer, TransAlta Corporation

Thank you, Dawn, and welcome to everyone on the call. As you can see on Slide 5, we

continue to make progress on the performance of the business.

Comparable EBITDA from our power generating asset, which excludes Energy Marketing and

corporate segment, increased 2 percent over last year for a total of 1.1 billion. The cash generated by

our operation increased 4 percent year over year. Over the last two years, we increased the cash

generation from our business by 100 million when including our corporate costs and our Energy

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Marketing segment in a challenging VaR market. This is the result of our high level of contracted

generation and our steady focus on cost and sustaining capital expenditure reduction.

Free cash flow for the year totalled 328 million. This is an increase of 90 million, or 28

percent since 2015. Year over year, sustaining capital decreased 13 percent to 235 million, reflecting

the impact of our decision to shut down or mothball four units at Sundance. We expect to spend

between 195 million to 205 million in 2018.

The decision to mothball our Sundance unit was made after considering their operating and

sustaining capital costs, as well as the power price expectation for 2018 and 2019 and the low

utilization rate of those units.

In 2017, we allocated almost 25 million to productivity capital to support our Greenlight

initiative, up from less than 10 million in 2016. We expect to maintain this level of investment in 2018.

We also benefit from lower financing costs as we continue to reduce our debt, and expect this to

continue in 2018 and 2019.

Let’s move to our balance sheet and credit metrics. As you can see from Slide 6, we repaid

our 400 million bond during the second quarter of this year using existing liquidity.

At the end of the year, we still had access to 1.6 billion of liquidity between TransAlta and

TransAlta Renewables, of which 300—400 million was cash in TransAlta. With the Sundance PPA

termination proceeds expected in March, we made a decision to repay the US 500 million bond early

in March. The next corporate bond maturity, which is not due until late 2019, will be paid off using

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cash generated from the business and the expected proceeds from the financing of the off-coal

payment later this year.

Our FFO to debt was within our 20 to 25 percent target range at 20.4 for the first time since

2011. During the year, we reduced our debt by over 500 million from 3.9 billion to 3.4 billion, of which

2.6 billion is TransAlta Corp. debt and 800 million is debt held at TransAlta Renewables. For reference,

our debt at TransAlta Corp. at the end of 2015 was 3.6 billion. So we have reduced the debt for

TransAlta Corp. by almost 30 percent over the last two years.

We expect to further improve our FFO-to-debt metric through 2018, as we intend to reduce

debt at TransAlta Corp. by an additional 400 million during the year.

The construction of the two projects we recently acquired in the US will be fully funded by

TransAlta Renewables over the next two years, and will not affect the debt level at TransAlta Corp.

As you can see, we are making great progress to strengthen our capital structure and are

ahead of our plan to deliver FFO to debt at the high end of our 25 to 30 percent range in 2021 (sic)

[2020].

As outlined in our Investor Day presentation, our capital allocation plan for the next three

years is a continuation of what we have been doing for the last two. Underpinning this plan is our

ability to deliver at least 1.2 billion of free cash flow over the next three years, including approximately

215 million for the early termination of the Sundance PPA and between 275 million to 350 million of

free cash flow in 2018.

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Given the recent performance of the business and forward price in Alberta, we are highly

confident in our ability to deliver at the upper end of that range in 2018. As a result, we will be seeking

approval from the TSX for a normal course issuer bid to buy back up to 14 million shares over the next

12 months.

Our intention is to use incremental cash flow generated by the business to reduce the

number of share outstanding, as we strongly believe our shares are undervalued. This will not impact

our debt reduction plan.

In 2015, we made a significant reduction of our dividend in anticipation of uncertainty

around our coal portfolio in Alberta. As we get more clarity on future market design and how it will

impact the profitability of our coal, hydro, and wind in the province, we will reconsider the level of

dividend we could sustain under all market outcomes.

Over the next three years, we are planning to allocate 300 million of free cash flow to

growing and transforming the business. This includes a potential investment in the gas pipeline that

will supply our coal facility with natural gas, improving the rework on the conversion of our coal facility

to gas. We believe our capital allocation for TransAlta is prudent for the time being.

Let’s now discuss our free cash flow target for the three years. As I mentioned earlier, our

plan relies on the business to deliver at least 1.2 billion of free cash flow over the next three years.

And we are highly confident in our ability to deliver that target.

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As highlighted at our Investor Day, our plan is grounded by our historical performance, the

high level of contracted revenue, and conservative assumption for pricing in Alberta. Since December,

we’ve seen forward price in Alberta increasing. However, prices are still nowhere near the average

price of $65 before carbon tax since deregulation in the Alberta market.

We also did a lot of work to better understand and model the flexibility and optionality in

our merchant coal asset to maximize their financial performance, and we are highly confident in our

ability to deliver improved performance through our Greenlight initiative. We expect our recurring

free cash flow in 2018 to be at the upper end of our 275 million to 350 million range which was shared

with you in December.

With the return of the Sundance PPA effective March 31st, we will find ourselves more

exposed to merchant power pricing in Alberta. This differs from our previous highly contracted

position in the province.

In late 2017, forward power price contracts for 2018/2019 were low, and we didn’t see the

benefit of hedging our generation. However, as prices moved up over the past few months, we are

taking risk off the table and have entered into fixed-price contracts for certain periods in 2018.

This merchant exposure is positive for TransAlta, and we expect to benefit from the

increased near-term price volatility. As we progress through the year and see where power prices

land, we expect to strategically layer in additional hedges to reduce our exposure and lock in value

for our shareholders.

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I will now pass the call over to Dawn to talk about 2018.

Dawn Farrell

Thanks, Donald. I’m going to step away from our performance now from last year, and let’s

start talking about 2018 and the future.

Again, I’ll reiterate our overall goal is to deliver 100 percent clean power to customers by

2025. Our customers want power at costs that help them compete, that are generated with minimal

environmental impact, and that come from a provider they’re proud of. We’re retooling our business

to supply customers with exactly what they want, and as well we’re supporting Alberta’s shift to a

capacity market.

So that leads to our first goal for 2018, which is to support the development of a capacity

market in Alberta that gives investors confidence to support our coal-to-gas investments in the

Alberta power market.

A capacity market that supports the Climate Leadership Plan creates the lowest cost for

energy, capacity, and ancillary services for consumers; creates stable pricing and stable revenues for

producers; and provides the right incentive structure for new investment in power is within reach.

The promise is to ensure a level playing field for capital, whether it is investing in an existing power

plant, like our coal-to-gas, or new, and we believe that that will be achieved once the final design is

in place. This is what will give our investors even greater confidence to support this strategy and to

support our investments in the Alberta market.

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This summer, we expect the AESO in Alberta to finalize the capacity market design, which

will take effect in 2021. The first draft of a design was published at the end of January for comments,

and we like others are getting our views into the AESO. We are confident by the time we get to the

final version the comprehensive market design will achieve its objectives, and will give us an

investment horizon for our assets.

Our second goal is about gas supply. By the end of the year, we expect to be in a position to

know when the first steel will be in the ground for the Tidewater pipeline. We want a clear view to

when we can start burning gas at the plant to reduce our greenhouse gas costs, and ultimately, to

convert our plant to gas.

Our third goal is to start the coal-to-gas conversions on at least two units. More specifically,

this means completing the engineering work and obtaining the required permits, as well as adjusting

the cost structure to align to a smaller and less complex operation.

Our fourth goal is about growth. Last week, TransAlta Renewables announced an

arrangement to acquire two wind projects in the US. These projects are right in TransAlta Renewables’

wheelhouse, and they’re supported by long-term contracts with highly creditworthy direct

customers. We’re focusing now on completing the purchase and building the plants on time and on

budget.

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As well this year if things go well, we could round out our year with another couple of

projects which will meet our investment criteria for TransAlta Renewables and generate value for our

shareholders.

We will continue to invest exploratory development funds in our Brazeau pump storage

project, and we’re also getting pretty excited about a future where we can supply more renewables

to any customers with strong credit ratings.

Our fifth goal is again about delivering financial, safety, and environmental results. Our

financial goal is to grow free cash flow in 2018 by 5 to 10 percent over our 2017 levels. We’ve also set

an internal goal to improve safety by 20 percent over 2017 levels. Growth in cash flow also includes

advancing strategies to bring additional revenues in Australia to the South Hedland plant.

Our sixth goal is to exit the year with 3.2 billion in debt for the existing assets and with an

FFO-to-debt ratio north of 22 percent.

And our final and most important goal is all about our people and our culture. Now let me

take a pause here. Most of the time, we find that investors aren’t all that interested in our people

strategies, but today I believe that investors that don’t pay attention to how management teams

invest in people will wake up one day and find out that their investments are not sustainable over the

longer term.

As we transition this company to gas, we need fewer people at our plants. As we look into

the future that is coming, we frankly need less people in our industry. It takes far fewer people to

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build and maintain wind and solar plants. But those people need to be even more technologically

savvy, flexible, and adaptable than the past. Our front, mid, and back offices need to adapt to systems

and processes that will tie together a more distributed asset base in markets that have ever-changing

and evolving rules.

So as we move towards 2025, our goals are to increase our use of technologies, and to

develop our people to adjust to the new realities of a much more distributed marketplace. And for

those people that leave TransAlta as our investments change, our Greenlight transformation is

designed to ensure they have sought-after skills and qualities.

So in closing, let me make it simple. Everything that we’re going to do in 2018 will move us

one year closer to 100 percent clean power by 2025.

So in summary, we’re moving ahead with our coal-to-gas conversion so we can supply low-

cost capacity to back up renewables as the Alberta market transitions away from carbon. We’re

securing new gas supply for the plant as soon as we can get it there. We’ll continue to grow our

renewables platform, which is the future for our industry.

We will continue to execute our financial strategy and increase our financial flexibility so we

have more options when it comes to capital allocation. We will lead in safety and environmental

performance. And finally, we will support our people through the transition so that we have a strong

and vibrant culture regardless of what changes are on the horizon.

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Last year was a pivotal year in our journey, and we created the momentum we need for our

success in 2018 as we become the provider of choice for clean, low-cost, reliable, and firm power.

Lots accomplished and lots to accomplish, and I’m very confident in our ability to succeed.

So with that, I’m going to turn it back over to Sally for questions.

Sally Taylor

Thank you, Dawn. Jamie, could you please open up the call for questions from the analysts

and media?

Q&A

Operator

Ladies and gentlemen, we will now conduct the analyst question-and-answer session. If you

would like to ask a question, press *, then the number 1 on your telephone keypad. If you would like

to withdraw your question, press the # key. There will be a brief pause while we compile the Q&A

roster.

Your first question comes from Rob Hope with Scotiabank. Your line is open.

Rob Hope — Scotiabank

Good morning, everyone. Maybe to start off on the 2021 outlook that you presented at your

recent Investor Day, does how the CMD has presented the capacity market align with what your

expectations were, including high availability of your hydro units to be bid into the capacity market?

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John Kousinioris — Chief Legal and Compliance Officer, TransAlta Corporation

It’s John Kousinioris speaking. In general I think the answer is yes, it is. There’s a lot more

work to do on the capacity market, but I think when we did the presentation in December, we talked

about a number of changes that would occur to support, for example, our hydro fleet, including the

eventual expiry of the PPA that we have in place with the Balancing Pool, which will result in a

significant uplift. I think right now a bit over 60 percent, sometimes as high as 80 percent of the

revenue effectively generated from the hydro fleet goes to the Balancing Pool.

But to answer your question, yes, we are seeing it track in the right direction. And just to

give you a sense, some of the sort of capacity value that we’re seeing attributed to our hydro fleet

are in excess of 80 percent. So we’re pretty pleased where that’s going generally.

Rob Hope

All right. That is good to hear. And then just in terms of capital allocation and the NCIB that

you are looking to install, is the idea to put kind of maybe excess capital that you’re earning in 2018

into the NCIB? And then I guess more broadly, how do you view the return on buying back your own

shares versus investing in late-stage development renewable projects?

Donald Tremblay

So yes, the idea is to take incremental cash that we don’t—like we have like a target on our

debt, and every cash that we don’t need to basically like to achieve that target we’ll use to buy back

share. And in terms—like clearly over time we’ll make the decision based on the opportunities that

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are in front of us. But generally, the growth will be in TransAlta Renewables and at returns that may

not be necessarily attractive for TransAlta shareholders, but that determination will be made in due

course.

But currently our view is it’s better to buy back our shares at current value because we

believe—we had a discussion at the Investor Day on the value of our shares, and we really believe

that they’re undervalued; that the market doesn’t reflect the value of the coal assets that we own

that we’ll convert to gas. And we really want to capitalize on this.

Rob Hope

All right. Thank you.

Operator

Your next question comes from Mark Jarvi with CIBC. Your line is open.

Mark Jarvi — CIBC

Good morning. I just wanted to clarify in terms of your comments around excess free cash

flow to use in the NCIB, when you think about those projects, the US wind projects and you might

have to up front fund some of the capital that tax equity partners might have actually supplied, do

you include that? Or do you just put that on a construction loan or credit facility and free up more

cash for the buyback?

Donald Tremblay

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So the way we look at this it will be like using our credit facility to fund the construction. At

some point, there will be tax equity that will come in, and potentially at some point—like that’s

TransAlta Renewables—we’ll look at like how much cash is sitting in front of Renewables based on

their performance that they will achieve this year, other transactions in front of them, and potentially

at some point raise equity in TransAlta Renewables, if need be.

But we haven’t made that decision. We’ll see as we go other opportunities (phon) in front

of us.

Mark Jarvi

So when you think about the spend at the wind facility out east, Kent Hills, and then also

your component of the equity for this, how much growth equity would you consider for 2018, just so

we can back into how much sort of excess free cash flow you have for the buyback?

Donald Tremblay

So what we have on a constant basis, we have 300 million that we allocate to growth over

the next three years. Some of that will go to the pipeline if we decide to go ahead with the pipeline.

Mark Jarvi

Okay. And then maybe my last question is on the US wind projects. If you go back a few

quarters ago you guys commented about how competitive it was and prices were being a bit up, and

returns were going lower. What was it about this opportunity, which I understand was sort of a

competitive process, allowed you guys to find the right returns to secure those projects?

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Dawn Farrell

Yeah. I mean, I think as you know the market for wind is very competitive. I mean, you have

to find a way to get an edge on every slice of the project, whether it’s the turbines, the wind farms,

the locations, the cost of capital. And it’s a game of seeing if you can add a little bit of margin here,

there, and everywhere. And as we’ve said to you, we remain very disciplined. So we bid a lot. Like

we’re—and we expect to lose a lot, and we don’t mind that. So we’ve got the machine set up to do

that.

And in this particular case, the team when they got in to look at these wind farms were able

to add some significant value, both in terms of making sure we got the right prices for the equipment,

but as well on the construction side. And that enabled us, I think, to be the winner and get the returns

that we need to be confident about how we’re growing TransAlta Renewables.

So like I say, you’ll see us in the market a lot; you’ll see us losing a lot. And you should be

happy about that as investors because when you see us win, then you can be confident that we got

the returns that we’re looking for.

Mark Jarvi

Okay. Thank you.

Operator

Your next question comes from Ben Pham with BMO. Your line is open.

Ben Pham — BMO Capital Markets

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Hi. Thanks. Some of the questions were on growth versus buybacks. How does dividend

increases fit into that mix in terms of your priorities?

Dawn Farrell

Yeah. I mean, Ben, as we come around the corner here and finish off our debt program, and

Donald told you the great progress we’ve made in the last two years, I mean we’ve reduced debt at

TransAlta by about 1 billion and we’re doing another 800 million, as we go forward you’re going to

end up with very little recourse debt left at TransAlta.

So as we think about the TransAlta cash flows, those cash flows will come from the existing

hydro that’s in there, which we’ve given you our views on what will happen to that hydro. And we’ve

got some other assets inside TransAlta, and then of course we’ve got our share of TransAlta

Renewables.

So as we think about, first of all, as we think about where we are today as we get closer to

a date where all that … where cash flow starts to not have to pay down debt—which we’re getting

very close on that—then we’ve got to say, okay, how does the cash coming into TransAlta get

reinvested in either growth or share buyback or dividend?

Currently, we started this NCIB because we—and we showed you this at Investment Day

and Donald already said it—our overriding concern is that people are not valuing the cash flows in a

big part of the Company. We think they trade TransAlta as if it’s only TransAlta Renewables. It’s 64

percent, and that’s completely ridiculous.

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So right now in terms of capital allocation, it’s relative to thinking about share buyback. But

as we get into that 2020 period, depending on whether we have to have growth projects that fit with

the TransAlta shareholders, and then we’ll compare dividend increases against what the potential

growth opportunities for TransAlta are at that time because we do see the growth in TransAlta being

a different kind of asset than growth in TransAlta Renewables.

So as we clear off this debt, it’s still our number one priority. We’re not walking away from

that. Donald said that we’d be at that 25 to 30 percent range, and I think he said 2021, but he meant

to say 2020. So in 2020, we are well within the range of a very, very strong balance sheet for going

into that capacity market.

And it’s at that we’re starting to look ahead and say, okay, what does that mean for

dividends? And we see dividends as something that we might potentially be able to start to grow

again.

Ben Pham

Okay. And then can I ask on RNW and really how you’re thinking about that more from a

longer-term perspective how it fits with the TA side of things? And really if you’ve really reduced debt

at the TA level utilizing RNW the last few years and pre-launch for say environments you’ve been

servicing some growth. But as you look forward and rates are increasing and you’ve seen more

recently RNW indirectly impacting your own stock negatively, does that play a role in just how you

think about ownership levels at RNW and how you think about using that vehicle longer term?

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Dawn Farrell

Yeah. I mean, I think we can always flex our ownership up and down with RNW if we think

that it’s better to do that from a value perspective for TransAlta. But I would say, Ben, kind of overall

as rates go up, it does affect people’s view of the existing cash flows, and that’s just the way it works,

right? That’s what a yieldco does. But the good news is—and remember, we’ve been in the utility

business as well for a long time—the good news is is as we do the incremental projects, the

incremental projects are being financed with project debt, and we’re pretty disciplined about making

sure that those returns reflect those new costs of capital. So if debt costs go up, the new prices on

the new renewables will have to reflect that.

And so as you put in incremental projects, they should be at the right returns for that vehicle.

And then over time if interest rates drop then, of course, you’ll see kind of an up and down reflection

of that in the vehicle.

In terms of how I see it for TransAlta, I think it’s absolutely strategic for TransAlta. It is a

different mix of assets and investments. I can tell you that it absolutely 100 percent supports our

credit rating. So if you look at being a Canadian company, as you know, in Canada investment-grade

balance sheets are more important than they would be in the United States. So when you look at

having that mix of long-term contracted assets in our mix, anybody who understands our business

knows that that mix supports the credit rating. So that’s a really good thing for TransAlta shareholders

because cost of capital overall is important.

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And as well, I personally believe that 95 percent of the growth in the next 10 years is going

to be in renewables, not in anything else. And so I think it’s a strategic vehicle. We’ll grow it. I think it

will be important as a piece of value for TransAlta, both in terms of the credit rating, but also in terms

of those stable cash flows because everybody thinks they want these volatile cash flows until they get

them. And we just went through that cycle.

So having these stable cash flows from TransAlta has been really, really important as we’ve

gotten through these last couple of years with low commodity prices. So we continue to believe that

both vehicles together work, and that continues to be our strategy.

Ben Pham

Okay. That’s helpful. Thanks, Dawn. Thanks, everybody.

Operator

Your next question comes from Andrew Kuske with Credit Suisse. Your line is open.

Andrew Kuske — Credit Suisse

Thank you. Good morning. Maybe just on Project Greenlight and just the progress there,

and I think in the disclosures you said 29 million of costs related to Project Greenlight through ‘17. Is

there a breakdown on capitalized versus expensed on that number? And then what are the

expectations in ‘18 on those fronts?

Donald Tremblay

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Andrew, it’s all capital—it’s all expense. So there’s no capital cost in that. We have some

capital costs, but that will be part of our project activity capital that we have. And for like 2018 we

expect this to be in the range of, I would say, 15 million to 20 million; much lower because we did a

lot of the work in 2017.

Dawn Farrell

Yeah. So, Andrew, let me just put some colour on that. So the program that we’ve put in

place January 1, 2017, has kind of an 18-month time frame on it. And the significant investment costs

to get that program set up, get the teams on it, bring everybody up, get everybody on board, get 900

initiatives across the Company, get us all exercising in a completely different way than we did before.

Those costs were, as Donald said, in our P&L for 2017, and there’s a few more costs as we go to sort

of the end of April.

But the program itself in terms of continuing to create the project and continuing to reduce

costs, add value, all that stuff, it continues. It’s now a core part of the way we do business here. So

we’d expect to see additional run rate cash flow coming into our business here in 2018 as a result of

what we’re doing. And then we get the full year of it in 2019 because we have no program costs. Very

small. We have a small TO office that costs us less than a—kind of in that $1 million range a year,

which is insignificant for what we’re talking about with you guys. But that program becomes fully

operational without those start-up costs in 2019. So that’s just to tell you how it works.

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In terms of the success of the program, not only has it been successful in terms of running

the base business, but it’s a critical execution engine for how we do our transition. And it’s given us

all the execution capability of that. So that’s really important as we go through this transition that we

have that tool.

Andrew Kuske

So just as a follow-up, when you think about the capital allocation and things like share

buyback and just other alternative forms of capital return to shareholders, these types of initiatives

and cost reductions and really reposition the business tend to have the most bang for buck. But clearly

you did a lot of that in ‘17. You’re doing more of it in ‘18. And is that really the front end of allocation

to have a gift that keeps giving over a period of time and then pivot the culture before you really look

at share buybacks to a much larger degree?

Dawn Farrell

You know what? I’m not sure what you’re saying. Can you say that again?

Andrew Kuske

Yeah. I guess it’s really just a function of you do all the heavy lifting and establish the

foundation with Greenlight. And that sets you up very well to have the cash flows in the future to buy

back the shares—

Dawn Farrell

Right

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Andrew Kuske

—if they should be distressed in price.

Dawn Farrell

Yeah. That’s absolutely right. Absolutely correct.

Andrew Kuske

Okay. Thank you.

Operator

Your next question comes from Robert Kwan with RBC Capital Markets. Your line is open.

Robert Kwan — RBC Capital Markets

Good morning. If I can come back to the NCIB, and Ambassador Giffin’s letter certainly talked

about using the NCIB when you see the shares as undervalued and you’ve had to come out on the call

that you strongly believe the shares are undervalued, so how should we expect the usage of the NCIB

over the course of the next year? Are you expecting to be out active regularly, whether it’s daily or

weekly? Or do you need to see, Donald, as you pointed out, your cash flow trending into the upper

end of the free cash flow range for this year before you take action?

Donald Tremblay

Yeah. So clearly what we’re seeking is the approval for up to 5 percent. What we said is we

think we will be opportunistic. So clearly we have our priority number one is achieving our target from

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a debt-reduction perspective. So that’s number one. And when we have clear visibility that where

basically we have more free cash, then we will be in the market in due course.

But it will be very opportunistic based on value of share and cash that we’re generating in

the business. But we will be prudent in the way that we’re using this, for sure, and basically update

you as we go.

Robert Kwan

Okay. So in some ways if the share price stays where it is, you probably need to be

reasonably into 2018 before you feel confident enough to execute on the NCIB?

Donald Tremblay

So clearly when we have good visibility on our 2018 number, we will be making the decision

at that time.

Robert Kwan

Okay. You highlighted the Solomon plant as being positive for your plan. And effectively

while you didn’t necessarily go down the road, it was effectively an asset sale. So given something like

that was viewed positively, are there any plans to proactively look to monetize assets, whether that’s

to fund the NCIB or fund growth?

Dawn Farrell

No.

Robert Kwan

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Okay. Maybe I’ll just finish then. Dawn, your thoughts on power prices; first just do you have

some comments as to what you think about the forward curve? And as well, just interested in your

thoughts as to what we’ve seen here in the first quarter. On the upside we’ve seen a handful of hours

with some of that nice spiking into the several hundred dollars per megawatt hour, but we’ve also

seen a short period of time where prices were below coal’s marginal costs and coal units were still

running off-peak losses. So what do you think about the quarter? And what type of read-through can

the quarter provide for when you get the offer of control from some of the units back on April 1st?

Dawn Farrell

Yeah. I mean, the quarter I think is still mixed up with bidding that’s not all that rational. So

I’m not paying any attention to it. When I look ahead, what I do know is as we bring back on April 1st

when we are bidding our units into the market, we can only bid as economic rational agents. So we

cannot bid below our costs. We cannot run our units below our cost, ever. And we never will. So we

have to be absolutely economically rational.

And if you look at the cost of the Sundance Units 5 and 6 if they’re in the market, they’re

going to set a price that’s probably higher than what you’ve seen in the first quarter. How much

higher? Don’t know. But I do know that we don’t have a choice to make irrational, uneconomic

decisions in the operator market with those units.

Now when I look at—when we look ahead, I think when we originally were looking at our—

remember, our strategy was to consolidate gigawatt hours under two units rather than running five

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units uneconomically. And we had decided to close down Sundance Unit 1. So we really got 5 units at

that site now. And I think when we originally ran our models last year, we probably thought that those

two units would run maybe at lower capacity utilizations. And I think our forecast is starting to show

potentially higher capacity utilization.

But as you know, I’ve been in this market for a long time, so as I say to our team over and

over again, do not be confident about what’s going to happen tomorrow because you absolutely have

no idea because all sorts of things happen as you go through the—I remember I ran the trading

business in—or I did the commercial business in that sort of 2010, 2011, 2012 time frame. And we

would be at this part of the year, and everybody’d be saying prices are going to be this and that and

you get there, and they wouldn’t be any of that.

So I think it’s—Donald talked about our hedging strategy. I think as we go through the year,

we’ve given our team much more flexibility on hedging than what they had in the past. And as they

go through the year and we report back to you how that went, I think that’s really what you’ve got to

measure us against. And we’ll try to find a way to give you some measurements to see if we were

able to get—I mean, our challenge—we got to be there to produce when prices are high either on a

forward basis or in the month on a spot market basis. So we’re kind of going back to a time where we

used to do that. So we’ll be trying to find a way to give you some indicators on that.

So net-net, I think prices will be higher than the fourth quarter. How much higher? Don’t

know. And it’s because we have to bid as an economically rational agent.

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Robert Kwan

Understood. And just on when you talk about bidding at or above your cost—and I apologize

if I misunderstood your previous statements—but I think previously you talked about your cost being

the fully loaded cost on the unit and not just the marginal cost of production. Is that correct?

Dawn Farrell

Well, I think we can—so at times we’ll bid at the marginal cost, including the cost of carbon

and including the cost of all the fuel and all the rest of it. And there may be times when we can bid at

a fully loaded cost. But if you are trying to model that—and you know sort of what the capital is, and

what the kinds of return expectations you’d need on merchant units—you can model it between

those two levels.

But we have to get—like we’re not going to bid just to break even, right? We’re just

wasting—the way I look at it, and it’s really, really simple unfortunately having operated these

machines, I’m not going to waste a megawatt hour to break even when I could use that megawatt

hour in the future at a profit because these older plants, and effectively they’re expensive to maintain

and I’m only going to dole those megawatt hours out into the market when there’s a margin on them.

Robert Kwan

Okay. That’s great. Thank you very much.

Operator

Your next question comes from Patrick Kenny with National Bank Financial. Your line is open.

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Patrick Kenny — National Bank Financial

Yeah. Good morning. Just on the Tidewater pipeline, I know you’re working on finalizing the

take-or-pay agreement at the moment, but can you also speak to your thoughts around how the

actual gas supply agreements might look with producers in terms of perhaps matching the 15-year

take-or-pay on the pipe with a similar duration supply agreement? And maybe what price for the gas

you think you’ll be able to lock in? Or are you just looking to take spot exposure for the AECO market?

Dawn Farrell

Yeah. So, Patrick, we’re just in the throes of doing that. So as you know, if you look—and

maybe on a future conference call we can have Brett come in and talk about how that’s going because

it’s pretty interesting how that all comes together. So the best thing about Tidewater is we think we

can get that gas there very, very quickly. And the other good thing is with the carbon pricing, the guys,

the engineers are designing everything so that when we do get the gas there, even if we haven’t done

the conversions, we can burn quite a bit of … we can burn up to 30 percent in our boilers. And that’ll

start to make an offset for greenhouse gas costs.

So net-net, we’re working like crazy to get it there. Now the guys that supply around the

facility and that will supply into that pipeline, we’re lining up discussions with all of those gas

suppliers. And frankly, the challenge you have in Alberta is if you look at the spot market price, it

tends to run this $1, $1.50 range, and if you look at the forward curve, they’re trying to get up to 2.50.

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So effectively, we’ll have a risk management strategy with that pipeline where we’ll have

kind of a range of we might layer in some contracts and have some spot, and then the traders will

trade around those positions as we get there. Now we haven’t quite decided what that looks like yet,

and the teams are working on that. I would say in general just based on the bearishness of gas in the

province, it’s going to be a higher percentage of spot to start with. I personally don’t think we’ll ever

end up in a 15-year contract with a fixed price, but we might end up—we might do some contracts

which I think would be more akin to what you see in other commodity markets where we’ll do volume

contracts with price resets, so things like that so that we can make sure we’ve got the volumes that

we need.

So all of that is really a work-in-progress and you all know Brett Gellner. He’s been working—

and Jennifer. Jennifer’s been working on the gas supply out of the trading group and Brett’s been

working with the pipeline guys, so maybe on a future call we can get a little more discussion on that.

Patrick Kenny

All right. That’s great—

Dawn Farrell

So it’s an open question. Yeah.

Patrick Kenny

Yeah. Thanks, Dawn. And then maybe just for Donald just to close the loop on the NCIB and

credit ratings, was there an update to the negative outlooks from S&P? Or did you have any

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discussions with S&P that gave you comfort that the negative outlook will be lifted even with

executing the NCIB?

Donald Tremblay

So the negative outlook is still there. We are having regular discussions with the rating

agency. What is important to them is that basically we keep the—our plan to deleverage is still intact

and the NCIB is not impacting this. And so that’s why that decision from their perspective doesn’t

matter because we have a plan and we’re executing on that plan and that’s what matters.

Dawn Farrell

Yeah. And I’d just like to—I mean, I know everybody thinks about the credit rating agencies

and we did have discussions with them, but I would like to just underline that it’s management’s plan,

not the credit rating agencies. So when Donald and I look at the sort of the volatility of cash flows that

can come around plants that don’t have 20-year PPAs anymore, that’s why we’re aiming at having

the recourse debt at 1.1 billion and the FFO to debt between 25 and 30.

The credit rating agencies will do what they’ll do. They have to assess the business risks.

From our perspective, that’s the right level of debt. And I’ve said this to a number of investors who

some investors would frankly like us to do more share buyback and less debt repayment. And I’m not

going to be the IPP that has 70 percent debt on volatile assets. We’re going to have 30 percent debt,

which is a simpler measure for me. Everybody else does these more complex measures. And so we’re

headed in that direction come hell or high water.

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Patrick Kenny

Got it. Thank you very much.

Operator

Your next question comes from Jeremy Rosenfield with Industrial Alliance Securities. Your

line is open.

Jeremy Rosenfield — Industrial Alliance Securities

Thank you. Just a couple of follow-up questions. First on the gas supply into the converted

plants, I think you had mentioned that you would look for a second pipeline option. I’m just wondering

if that’s something you’re looking to lock up for 2018? Or that might take some longer time?

Dawn Farrell

Yeah. Well, first of all, there’s some really good leverage out of that first pipeline, so we’re

signing up for 130, but there’s an opportunity to take that up much higher if we want to. We are in

discussions with two other pipeline suppliers, and frankly it’ll be the cheapest guy who can get it there

the fastest that will win.

So right now there’s—I have to say the Tidewater guys they’re just so entrepreneurial and

they’re fast and they’re smart and they’re aggressive, and we really appreciate working with them

because that’s what we’re trying to do. So we’re hoping the other two pipeline companies get in the

same mode.

Jeremy Rosenfield

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Okay. And I wanted to ask a couple other ones. Just on the Sundance PPA termination and

the payment, I’m wondering if you can provide any more detail on conversations or discussions or

negotiations that might have taken place with the Balancing Pool and where you are there?

John Kousinioris

Yeah. Jeremy, it’s John. We have had discussions with the Balancing Pool on trying to bridge

the gap between what we think the termination should be versus what they think the termination

payment should be. We haven’t been able to resolve that yet, candidly. We do expect to receive at

the end of—we’re in March now—at the end of the month kind of at a minimum the undisputed

amount of the payment, and then we’re considering what the next steps would be to be able to get

clarity on our position versus their position. So it’s something that we’ll get some clarity on over the

coming number of months.

Jeremy Rosenfield

Can you just let us know is there an arbitration process that’s specified in the contract? Or

do you have to potentially pursue other legal means?

John Kousinioris

Yeah. There is an arbitration process which is in the PPA to be able to get clarity around

these things. And there’s also avenues to be able to go to court to get clarity on things. So there are

a number of avenues that you can take if we can’t get a resolution of the matter.

Jeremy Rosenfield

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Okay. That’s perfect. And then just a last question, on the comprehensive market design

there was some wording around the potential for a price cap for operators with certain market shares.

And I’m just wondering what’s your take of how that was proposed and how you’re reacting to that?

Dawn Farrell

We’re still trying to model that to really understand it because I mean, when you first look

at it at first glance it just means that all TransAlta’s units are dispatched and at the front end of the

curve because we’re limited to bidding below 0.5 times, whatever’s in that code (phon). So we’re just

really giving some thought to that in terms of, I mean, whether or not that’s the most efficient way

to do it.

Our overall concern, we want to make sure that when we’re finished here that the way in

which it all works—so first of all, we have no problem with being mitigated if people think we have

market power. But at the end of the day, that total design has to be the cheapest design for customers

because, as you know, we’re about low-cost, green, firm. And really this is the firm part of that

promise and the low cost part of that promise. So it’s making sure in the modelling that the design

also leads to low cost.

So there may be other ways to mitigate TransAlta if we have too much market share that

actually continue to make sure that consumers get the low cost in the province.

Jeremy Rosenfield

Okay. I’ll leave it there. Thanks.

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Operator

Your next question—

Dawn Farrell

More to come on that. I think when we get—just so you’re clear, when we get the second

… we’ll have enough work done by the time they come out with that second comprehensive market

design—it comes out at the end of April—and probably on our May conference call just we’ll have

seen how the input to the AESO has changed their view and what that second design looks like. And

we’ll have enough modelling done, I think, to be able to just provide a lot more clarity on how we

think that impacts us because at this point, depending on how you read those rules and depending

on how you do the modelling, I’m not sure that it’s exactly achieving everything everybody’s looking

for.

Jeremy Rosenfield

Yeah. I mean, just to respond to that, I think what I was looking for was something along the

lines of do you think that you can use some of the mitigating measures that had been proposed

initially in terms of how you bid in some of your plants to avoid that price cap? But I think I understand

that there’s probably a lot of work that needs to be done.

Dawn Farrell

I don’t think so.

John Kousinioris

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Yeah.

Dawn Farrell

No, I don’t think so.

John Kousinioris

Jeremy, it’s John.

Dawn Farrell

Yeah. Yeah.

John Kousinioris

I don’t think that that is something—we’re not actually looking at that, to be honest.

Dawn Farrell

Yeah.

John Kousinioris

I think it’s a work-in-progress. We continue to be engaged with the AESO as it develops. And

as Dawn said, we’re trying to model out what the implications are. But we’re not looking at spending

a lot of time looking at various sort of unique bidding strategies for the—

Dawn Farrell

Yeah. Yeah. That’s not even a—the big thing, remember, about that whole capacity design

is this net CONE concept. And believe me, the guys keep working with me and I keep looking at them,

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and my eyes roll in the back of my head. But as best as I can get it, it’s the trade-off between energy

and capacity. So—

Jeremy Rosenfield

Mm-hmm.

Dawn Farrell

And it’s the net CONE concept, so it’s net between the two. So you’re kind of moving money

around between the capacity market and the energy market. If you get it wrong, consumers pay a

tonne of money because they end up paying $10 more on every unit of energy, and they end up with

a slightly lower capacity price. If you get it right, you get the right price in the energy market and the

right price in the capacity market so that consumers have the lowest bill, and that’s really where the

balancing act comes in.

And we, TransAlta, provide a complication to how they do that because of this market

situation we have.

Jeremy Rosenfield

Mm-hmm.

Dawn Farrell

So our teams are thinking about just how do we bring some positive proposals forward

because we want to make sure that at the end of the day consumers get the right pricing, energy plus

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capacity and the right cost for ancillary services because net-net, Alberta will only be strong if they

get the lowest overall power bill. And that’s where we’re trying to take it.

Jeremy Rosenfield

Yup. I think I get it. Okay. Thanks.

Operator

Your next question comes from Charles Fishman with Morningstar Research. Your line is

open.

Charles Fishman — Morningstar Research

Dawn, I just have one question left. This isn’t the first time that we’ve heard you talk about

the competitiveness of the US market as far as acquiring wind or renewable assets. Would you say

now that the US tax reform is set—certainly there’s been an observation in the US market that these

projects might be less desirable to US investors—does that help you from a competitive standpoint?

Or does it just not even move the needle?

Dawn Farrell

Well, I think as I say, these things ebb and flow. And people, I think, get overly focused on

what’s happening in the moment. What I tend to look at is how do you—just my accountability for

this company is to position it thinking ten years ahead and making sure that whatever we’re doing

today gets it to where it needs to go.

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So I would say yes, we’re in a period where people have—and they do this. They overbid the

assets and they reduced the returns. And then they all get tired of it and they go away and go

somewhere else. And I think it is a good time for them all to go away and go do something else

because—and as long as we can get returns that we like at this time with those kinds of projects, over

the long term those will end up being really strong projects for this company.

So I think as investors in the US move on to other things, especially if the US economy’s

getting frosty in other areas, it does give us an opportunity. And maybe that’s a little bit behind what

we saw with those plants in the northeast.

Charles Fishman

Okay. Thanks. That’s an interesting observation from a Canadian. Thank you.

Operator

This concludes the analyst Q&A portion of today’s call. We will now take questions from

members of the media. As a reminder, please press *, then the number 1 on your telephone keypad

to ask a question.

And your first question comes from Chris Varcoe with Calgary Herald. Your line is open.

Chris Varcoe — Calgary Herald

Hi, Dawn. I have just a couple of questions. I’m wondering if you can tell me how much work

you’ve done so far on the Brazeau pump station? And what work will you be doing on it in 2018?

Dawn Farrell

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Well, we’ve done quite a bit of work so far. I mean, we’ve done some preliminary

engineering. We’ve engaged with the First Nations. We’ve done quite a bit of regulatory work to think

about what the regulatory file would look like on it.

Now I must say the Canadian government’s just announced a new way of thinking about big

projects, so we’re just in the process of figuring out what that means for the project. We’ve also done

a lot of work with all the political parties here in Alberta to get support on a nonpartisan basis, and

make sure that as the project advances that it would have support in the province. We’d just gotten

a tremendously positive response from everybody.

So right now we’re doing the work with the AESO. And of course, the AESO it’s challenging

because they’re trying to stand up a capacity market and at the same time they have to be thinking

about what does it look like over the longer term because, remember, our coal-to-gas asset by law

has to come out of the system by 2039, which is quite a lot of megawatt that come off. And so we see

that project as a long-term project for Alberta because it’s basically going to provide a lot of storage

to the renewables that are coming on. So so far we’ve done quite a bit of work on it.

This year is the big turning point, though. Until there’s actually a call for either storage or

dispatchable renewables and we can qualify in that call and we can really advance some sort of long-

term contract, we can’t really do all that much more. So we’ve got it a bit on hold as we work through

the regulatory arena this year, but we’re really hopeful that somewhere in this year there’ll be a call

and we’ll be able to bid it.

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So great project, got lots of support, and hopefully there’ll be a way to get a contract.

Operator

And, Ms. Taylor, there are no further questions at this time. Please continue.

Sally Taylor

Thank you, everyone. That concludes our call for today. If you have any further questions,

please don’t hesitate to reach out to the investor relations team.

Donald Tremblay

Thank you.

Operator

And, ladies and gentlemen, this concludes the call for today. Thank you for participating.

Please disconnect your lines.

*****

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