Key Highlights

  • Adjusted EBITDA was CAD 264 million, and free Cash Flow was CAD 93 million, or CAD 0.29 per share.
  • Average fleet availability was 92.6%, and the company reported that it remains confident in achieving its 2026 guidance range.
  • In October, TransAlta closed the Acquisition of two Colorado Natural Gas peaking facilities totaling 318 megawatts for USD 1 billion.
  • The sale of a 49% interest in its 502 megawatt Oklahoma wind portfolio to Ares closed for USD 305 million.

Third-Quarter Results

TransAlta Corporation (NYSE:TAC), a power generation company with hydro, wind, solar and gas assets, held its third quarter 2026 earnings call. All amounts are in Canadian dollars unless otherwise noted. President and Chief Executive Officer Joel Hunter reported adjusted EBITDA of CAD 264 million, free cash flow of CAD 93 million, or CAD 0.29 per share, and average fleet availability of 92.6%.

The Chief Financial Officer said the Hydro segment reflected the optimization of hedge positions and higher intercompany sales of emissions credits, and Wind and Solar increased on higher wind resource across all regions. Gas segment adjusted EBITDA was CAD 29 million higher, supported by optimization of the Alberta fleet, emissions Credit realization and Eastern Canada facilities. Energy Marketing was up CAD 13 million year over year, and corporate costs were 20% lower than the prior year.

Renewable Assets offset part of the gas fleet's year-to-date carbon compliance obligation, resulting in a CAD 51 million reduction in the carbon obligation during the quarter. Year-to-date sustaining capital expenditures are down CAD 22 million, and full-year sustaining capital remains within the guided range of CAD 140 million to CAD 160 million.

Alberta Portfolio and Hedging

Alberta spot prices declined from CAD 51 in the third quarter of 2025, which management attributed to supply, mild weather and limited periods of market tightness. Hedge volumes carried an average price of CAD 65 per MWh, a CAD 28 premium to the average spot price. The gas fleet realized an average merchant price of CAD 55 per MWh, a 53% premium to spot, and the hydro fleet realized CAD 43 per MWh, a 19% premium. The merchant wind fleet realized CAD 19 per MWh, and ancillary service volumes were delivered at an 11% premium.

For 2027, TransAlta has 6.7 thousand GWh hedged at an average price of CAD 65 per MWh, which management said is above current forward levels.

Growth Projects

The company is converting Centralia to natural gas, with environmental permits targeted by year end and a final Investment decision next year. In September, the U.S. Department of Energy issued its fourth order under section 202c requiring Centralia Unit 2 to remain available for operation for an additional 90 days.

TransAlta notified the Alberta System Operator that it is mothballing its Battle River units and extending the Sundance 6 mothball outage. At the Keephills site, the Boreal Technology Hub Data Center project, with partners Brookfield, CPP Investment and BGRE, received Alberta Utilities Commission approval in October. At full build out it is anticipated to provide up to 1.6 GW of electrical load, starting from a 230 MW grid allocation.

Items to Follow

Investors can follow the Centralia environmental permits and final investment decision, the Boreal master site development permits, the reuse of the Colorado and Oklahoma transaction proceeds toward growth projects, and the Department of Energy 202c orders for Centralia Unit 2.

Management also noted that the remaining Alberta fleet is to operate at higher capacity factors to support its hedging strategy.