TransAlta Q2 Earnings Call Highlights

TransAlta reported solid Q2 results, with adjusted EBITDA of C$291 million and free cash flow of C$143 million, despite Alberta spot prices falling to C$29/MWh. Hedging and asset optimization kept realized prices above market levels, and the company reaffirmed its 2026 guidance. TransAlta is pursuing growth through Alberta data center development, potentially starting with a 230-megawatt allocation, while discussions continue with regulators and investment partners. Its gas-fired assets could provide reliable power for large computing loads. TransAlta expects its US$1 billion acquisition of two Colorado gas-peaking plants to close in Q4 2026, adding an estimated C$110 million in annual adjusted EBITDA. The company is also advancing the Centralia Unit 2 gas conversion, with a final investment decision targeted for Q1 2027. TransAlta reported second-quarter 2026 adjusted EBITDA of C$291 million and free cash flow of C$143 million, or C$0.47 per share, as the power producer navigated softer merchant electricity prices in Alberta through hedging and asset optimization. President and Chief Executive Officer Joel Hunter stated the company’s average fleet availability was 90.2% during the quarter. Hunter mentioned TransAlta’s hedging strategy helped realized pricing remain above Alberta spot market levels, while hydro and wind assets provided environmental offsets against the company’s 2025 carbon compliance obligations. The company reaffirmed its 2026 guidance range, although the recently announced acquisition of two Colorado natural-gas peaking plants is not included in that outlook. Chief Financial Officer Mike Politeski reported TransAlta’s hydro segment generated C$87 million of adjusted EBITDA, down C$39 million from the second quarter of 2025. The decline reflected lower Alberta spot and hedge prices as well as reduced intercompany sales of emissions credits. Wind and solar adjusted EBITDA totaled C$90 million, roughly consistent with the prior-year period. Higher U.S. wind resource offset lower Alberta pricing and reduced wind resource in Eastern Canada, Politeski noted. Adjusted EBITDA in the gas segment increased by C$14 million from a year earlier, supported by optimization of Alberta assets and contributions from the Far North acquisition. The company stated it fully integrated four gas-fired facilities associated with that acquisition during the quarter. Energy marketing adjusted EBITDA fell C$16 million, which Politeski attributed to subdued volatility in Western power markets and lower realized gains during the quarter. He indicated TransAlta expects additional gains to be realized by year-end as favorable trading positions settle. Corporate costs declined 8% year over year, while energy transition segment EBITDA declined following the expiration of a Centralia contract at the end of 2025. Alberta spot prices averaged C$29 per megawatt-hour in the second quarter, compared with C$40 per megawatt-hour a year earlier, due primarily to seasonally lower demand and continued strong supply. TransAlta stated it held approximately 2,400 gigawatt-hours of hedges at an average price of C$63 per megawatt-hour during the quarter. The company’s gas fleet realized an average price of C$68 per megawatt-hour, a 134% premium to average spot pricing. Its hydro fleet realized C$36 per megawatt-hour, a 24% premium to average spot prices. Merchant wind realized C$14 per megawatt-hour, affected by increased thermal production and intermittent wind and solar output. TransAlta also delivered about 900 gigawatt-hours of ancillary-service volumes at a 14% premium to average spot pricing. For the balance of 2026, the company has about 4,500 gigawatt-hours of Alberta generation hedged at an average price.