TransAlta (NYSE:TAC) said it delivered third-quarter operational and financial results that management characterized as strong despite a softer Alberta power-price environment, supported by hedging, fleet optimization and high asset availability.
The company reported adjusted EBITDA of C$264 million, free cash flow of C$93 million, or C$0.29 per share, and average fleet availability of 92.6% for the quarter. President and CEO Joel Hunter said the company remained confident it could meet its 2026 guidance ranges, citing year-to-date performance, contracted assets and its hedge position.
Hedging and optimization offset weaker Alberta prices
Alberta spot power prices averaged about C$36 during the third quarter, compared with C$51 in the same period of 2025. Chief Financial Officer Mike Politeski attributed the decline to strong supply, mild weather and limited periods of market tightness.
TransAlta said it improved margins by using power purchases and position monetization to fulfill portions of higher-priced hedge commitments when market prices fell below the company’s variable production costs. The company had approximately 2,500 gigawatt-hours of hedges during the quarter at an average price of C$65, representing a C$28 premium to average spot prices.
The gas fleet realized an average merchant price of C$55, a 53% premium to average spot prices, while the hydro fleet realized C$43, a 19% premium. Merchant wind assets realized an average price of C$19, which Politeski said reflected increased thermal production and the timing of wind and solar generation.
TransAlta also delivered roughly 2,800 GWh of ancillary-service volumes at an 11% premium to average spot prices. For the remainder of 2026, the company has approximately 2,100 GWh of Alberta generation hedged at an average C$67 price. It has about 6,700 GWh hedged for 2027 at an average price of C$65.
Politeski said wind and solar EBITDA increased because of stronger wind resources across regions, while gas-segment EBITDA rose by C$29 million on Alberta fleet optimization, emissions-credit realization and contributions from Eastern Canadian facilities. Energy marketing income increased C$13 million year over year, and corporate costs were 20% lower than the prior year.
Colorado acquisition and Oklahoma asset sale close
In October, TransAlta closed its C$1 billion acquisition of two natural gas-fired peaking facilities in Colorado. The 318-megawatt assets are expected to provide about C$110 million of low-risk adjusted EBITDA annually, according to Hunter.
Hunter said the facilities are fully contracted for 27 years with two counterparties and establish a larger platform for TransAlta in Colorado and the broader Western U.S. market. He noted that Colorado currently generates roughly 20% to 25% of its power from coal and is expected to transition toward natural gas.
The company also completed the sale of a 49% interest in its 500-MW Oklahoma wind portfolio to Ares Infrastructure Funds for C$305 million. TransAlta retained operational control of the portfolio. Politeski said asset recycling will remain an important tool for strengthening the balance sheet, adding that the company has more than 90 assets and sees potential to monetize smaller holdings outside its core areas.
The combined effect of the Colorado acquisition and Oklahoma disposition is expected to have a relatively modest impact on 2026 results, Politeski said.
Alberta fleet mothballing preserves longer-term optionality
TransAlta notified the Alberta Electric System Operator that it will mothball its Battle River units and extend the Sundance 6 mothball outage. Hunter described the decision as an economic one based on low capacity factors at Battle River Units 4 and 5 and the need to reduce near-term costs while preserving the assets’ longer-term potential.
He said 45 employees will remain at the Battle River site and that the units could return to service with relatively limited capital investment. Management expects the units, along with other gas-fired steam assets and Sheerness 1, could operate at capacity factors above 90% if market fundamentals strengthen or if data-center demand develops in Alberta.
The company said its remaining Alberta fleet will operate at higher capacity factors to support hedging commitments, provide system reliability and capture higher-priced periods.
Boreal data-center project advances as company awaits AESO clarity
TransAlta and its partners Brookfield, CPP Investments and BGRE continue to advance the Keephills Data Center project, now called the Boreal Technology Hub. The project is located south of TransAlta’s Keephills generating facilities, where the company is the exclusive land and power provider.
At full build-out, Boreal is anticipated to support up to 1.6 GW of electrical load. Initial power would include TransAlta’s 230-MW grid allocation, capacity from underutilized gas-fired steam generation and potentially future redevelopment of Sundance 5 and Keephills 1. The company received Alberta Utilities Commission approval for the Keephills 1 project in October.
Hunter said definitive agreements with Brookfield and CPP Investments are well advanced but will likely move into early 2027 as TransAlta seeks clarity from the AESO on the amount of underutilized generation that can be used to serve data-center load. He said discussions with the AESO remain collaborative and are intended to balance new load growth with grid reliability and affordability.
The company hosted an October community open house for Boreal that drew more than 180 attendees, according to Hunter. Questions focused on data-center operations, including noise and water use, rather than organized opposition, he said. Additional technical sessions are planned.
Separately, TransAlta expects to receive environmental permits for its Centralia natural-gas conversion by year-end and continues to target a final investment decision next year. Centralia Unit 2 remains available under a fourth U.S. Department of Energy Section 202(c) order requiring an additional 90 days of availability, and the company said it expects to recover associated costs.
About TransAlta (NYSE:TAC)
TransAlta Corporation is a Canada-based power generation and wholesale marketing company headquartered in Calgary, Alberta. The company develops, owns and operates a diversified portfolio of electricity-generating facilities, including hydroelectric, wind, solar, natural gas and coal-fired power assets.
TransAlta supplies electricity to utilities, commercial and industrial customers, and wholesale markets. Its activities include power generation, energy marketing, asset management and the development of renewable energy projects.
