TransAlta Corp

TransAlta reported Q2 2026 adjusted EBITDA of $291 million and free cash flow of $143 million, or $0.47 per share, with 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, in line with last year; Gas adjusted EBITDA was $14 million higher year over year; and Energy Marketing adjusted EBITDA decreased by $16 million. Alberta spot prices averaged $29/MWh versus $40/MWh in Q2 2025, while the gas fleet realized $68/MWh, hydro realized $36/MWh, and merchant wind realized $14/MWh. For the balance of 2026, management expects additional contributions from carbon credit realization, sustaining capital of $140 million to $160 million, and continued strength from the hedge book. The company reaffirmed its 2026 guidance range but did not restate a specific revenue or EPS target on the call.

CEO Joel E. Hunter framed the quarter as evidence of resilience in a difficult pricing environment, emphasizing that realized prices and optimization helped offset softer Alberta merchant markets. He spent much of his commentary on strategic growth opportunities: Alberta data centers, the Centralia coal-to-gas conversion, the Colorado acquisition, and broader asset repurposing across legacy sites. His tone was confident and constructive, repeatedly stressing that TransAlta has the assets, land, transmission, gas supply, and internal capability to support future growth and long-term value creation.

CFO Mike Politeski focused on segment performance, noting Hydro EBITDA of $87 million, Wind and Solar EBITDA of $90 million, Gas EBITDA up $14 million year over year, and Energy Marketing EBITDA down $16 million. He highlighted free cash flow of $143 million, lower sustaining capex in the quarter due to timing, and a 2026 sustaining capital expectation of $140 million to $160 million. He also pointed to strong hedge coverage of about 2.4 TWh at $63/MWh in Q2, about 4.5 TWh hedged for the rest of 2026 at $64/MWh, and 6.6 TWh hedged for 2027 at $64/MWh, while saying Moody’s reaffirmed Ba1 and S&P reaffirmed BB+ but moved the outlook to negative. On capital allocation, he said the company remains committed to balance-sheet strengthening through asset recycling and sees the Colorado deal as accretive and not included in the guidance reaffirmation.

Analysts pressed management on timing and structure around the Alberta data-center opportunity, especially how AESO clarity on underutilized assets could affect the move from the MOU to definitive agreements with Brookfield and CPP. Management said discussions are ongoing, hopes for clarity in the next quarter or so, and said the 230 MW Phase 1 could potentially advance even before the broader underutilized-capacity issue is fully resolved. Questions also focused on asset recycling, portfolio rotation, power-price expectations, and balance-sheet flexibility under the new S&P negative outlook; management said several asset-sale processes are underway, forward prices have improved, and the rating outlook is a temporary hurdle rather than a constraint on current plans.