TransAlta Corporation

TransAlta reported Q2 2026 adjusted EBITDA of $291 million, free cash flow of $143 million, or $0.47 per share, and average fleet availability of 90.2%. Hydro adjusted EBITDA was $87 million, down $39 million year over year; Wind and Solar adjusted EBITDA was $90 million, roughly consistent with last year; Gas adjusted EBITDA was $14 million higher year over year; and Energy Marketing adjusted EBITDA decreased by $16 million. Alberta spot power prices averaged $29/MWh versus $40/MWh in Q2 2025, while the gas fleet realized $68/MWh, hydro $36/MWh, and merchant wind $14/MWh. For the balance of 2026, management expects additional carbon-credit contributions and reiterated confidence in staying within the 2026 guidance range; sustaining capital is still expected at $140 million to $160 million for 2026. The company also said it expects the US$1 billion Colorado acquisition to close in Q4 2026 and add about $110 million per year in adjusted EBITDA, but it is not included in guidance.

Joel Hunter emphasized that the quarter showed resilience in a weak market, with TransAlta using hedging, asset optimization, and its diversified fleet to protect cash flow. He framed the Alberta data center opportunity as a strategic fit for TransAlta’s underutilized gas-fired steam units, saying speed to power and framework clarity are key and that the recent Alberta regulations are an important step. He was upbeat on multiple growth paths at once: Centralia conversion, Alberta AI infrastructure, M&A, and asset rotation.

Mike Politeski focused on the quality of earnings and the mechanics behind them. He highlighted $291 million of adjusted EBITDA, $143 million of free cash flow, and lower sustaining capex year over year, while noting sustaining capital is still expected to be $140 million to $160 million in 2026. He detailed the hedge book and pricing support, including about 2.4 TWh hedged at $63/MWh, about 4.5 TWh hedged for the rest of 2026 at $64/MWh, and about 6.6 TWh hedged for 2027 at $64/MWh. He also said Moody’s kept a Ba1/stable rating, S&P affirmed BB+ but moved the outlook to negative, and management is committed to strengthening the balance sheet through asset recycling and future cash flow growth.

Analysts pressed management on timing and sequencing for the AESO’s underutilized-capacity decision and how that affects the MOU/definitive agreement with Brookfield and CPP; management said talks are ongoing, hopes for clarity in the next quarter or so, and that the first 230 MW could potentially move ahead before full clarity on the broader opportunity. Questions also focused on asset recycling and balance-sheet support, with management saying several sales processes are underway and that Brookfield’s hydro option, Centralia cash flow, and asset sales all matter. On data centers and repowering, management said Keephills is the current focus, that repowering/greenfield work is underway but mostly for the next decade, and that Centralia Unit 1 is still very early-stage with gas supply the main constraint.