TransAlta Corporation (TAC) Q3 2026 Earnings Report, Transcript and Summary

Good morning. My name is Andrew, and I will be your conference operator today. At this time, I would like to welcome everyone to TransAlta Corporation Third Quarter 2026 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press *11 on your telephone keypad. If you would like to withdraw your question. Thank you. Miss Paris, you may begin your conference.

Thank you, Andrew. Good morning, everyone. My name is Stephanie Ann Paris, I am the Vice President of Investor Relations and Corporate Strategy of TransAlta. Welcome to TransAlta's third quarter 2026 conference call. With me today are Joel E. Hunter, President and Chief Executive Officer Mike Politeski, EVP Finance and Chief Financial Officer and Christopher D. Fralick, EVP Generation and Chief Operating Officer. Today's call is being webcast, and I invite those listening on the phone lines to view the supporting slides that are posted on our website. A replay of the call will be made available later today, and the transcript will be posted to our website shortly thereafter. All the information provided during this conference call is subject to the forward looking statement qualification set out here on Slide 2 detailed further in our MD and A and incorporated in full for the purposes of today's call. All amounts referenced are in Canadian dollars unless otherwise noted. The non-IFRS terminology used, including adjusted EBITDA, free cash flow, are reconciled in the MD and A for your reference. On today's call, Joel and Mike will provide an overview of TransAlta's quarterly results. After these remarks, we will open the call for questions. With that, I will turn the call over to Joel.

Thanks, Stephanie. Good morning, everyone, and thank you for joining our third quarter conference call. TransAlta delivered strong third quarter operational and financial performance. Demonstrating our fleet's ability to continue to deliver results during challenging market conditions. Our Alberta portfolio, hedging strategy and active asset optimization continue to generate realized prices well above spot prices, while availability remained high across our diversified fleet. During the quarter, we delivered adjusted EBITDA of $264 million free cash flow $93 million or $0.29 per share and average fleet availability of 92.6%. Due to our strong performance year to date and expectations we remain confident in achieving our 2026 guidance range which Mike will cover in more detail. October, we closed the acquisition of 2 natural gas fired peaking facilities in Colorado for US$1 billion which collectively will provide approximately $110 million of low risk high quality adjusted EBITDA per year. These operating assets, totaling 318 megawatts add immediate stable cash flow that can be redeployed into our most compelling growth initiatives including the Centralia conversion and Alberta data center projects. We also closed the sale of a 49% interest in our 502 megawatt Oklahoma wind portfolio to Ares Infrastructure Funds for US$305 million This transaction monetizes a portion of our investment in a noncore geography, while retaining operational control. We look forward to partnering with Ares in leveraging our combined strengths to enhance the value of the assets. Proceeds from the sale will strengthen our balance sheet and support our accretive growth opportunities, as large load growth, electrification, and onshoring increased power demand across our core geographies. Progress continues with the conversion of Centralia to natural gas. We expect to receive our environmental permits by year end, and we continue to advance towards a final investment decision next year. In September, the US Department of Energy issued its fourth order under section 202c, requiring Centralia Unit 2 to remain available for operation for an additional 90 days. We continue to comply with the directive and remain confident in our ability to recover our associated costs. Yesterday, we notified the ASO that we will be mothballing our Battle River units in extending the Sundance 6 mothball outage. Doing so maintains long term optionality of the units while optimizing our Alberta portfolio in the near term. We retain the flexibility to return the assets to service along with Sheerness when market fundamentals strengthen, particularly as data center load develops across the province. Our remaining Alberta fleet will operate at higher capacity factors to support our hedging strategy, provide reliability and capture value during higher priced hours. And finally, together with our partners Brookfield, CPP Investment and BGRE, we continue to make meaningful progress on the Keephills data center project, now known as the Boreal Technology Hub. On October 7th, the Boreal team hosted a community open house welcoming local stakeholders and other interested parties to learn about the project, ask questions, and share feedback. OREO is located directly south of our Keephills generating facilities, where we are the exclusive land and power provider. At full build out, Boreal is currently anticipated to provide up to 1.6 GW of electrical load. Power will be provided from our initial 230 MW grid allocation. Capacity from our underutilized gas fired steam fleet, and longer term, potentially from the Sundance V and Keybills I redevelopment projects. I am pleased to share we received AUC approval for the Keephills project in October. We continue to make meaningful progress with the A on a solution to serve data center load from our underutilized generation. Including our mothballed units. Our gas fired steam units are designed to operate as baseload generation, at capacity factors greater than 90%. Using underutilized generation will help serve new load while continuing to provide affordable and critical reliability to Alberta's electricity system. The Boreal project is currently pursuing their master site development permits which is the next-- a major milestone ahead of construction commencing. This project is a significant opportunity for TransAlta. Our partners, Alberta, and the local community and we will establish 1 of our Canada's largest AI and digital infrastructure hubs. I will now turn the call over to Mike to talk more about our third quarter financial performance.

Thanks, Joel, and good morning, everyone. During the quarter, we generated adjusted EBITDA of $264 million a strong outcome given the soft price environment in Alberta. Our Hydro segment adjusted EBITDA reflected the optimization of hedge positions and higher intercompany sales of emissions credits. Our wind and solar segment reported increased adjusted EBITDA as higher wind resource across all regions provided additional upside. Within our Gas segment, adjusted EBITDA was $29 million higher due to the continued strong optimization of our Alberta fleet realization of emissions credits, and positive contributions from our facilities in Eastern Canada. Energy marketing performed well in the third quarter. Up $13 million year over year, reflecting strong performance from our trading desks across U. S. Power and natural gas markets. In our corporate segment, we continue to control our costs which were 20% lower than the prior year. And finally, our Energy Transition segment reflects the cessation of coal fired generation at Centralia at the end of 2025. As Joel previously mentioned, we continue to comply with 202c orders received from the DOE. Our renewable assets provided considerable environmental offset to our gas fleet's 2026 year-to-date carbon compliance obligation. Resulting in a $51 million reduction in our carbon obligation during the quarter. Reflecting the value of our diversified fleet in Alberta. Going forward, we expect the realization of emissions credits to better match our carbon compliance costs in the period incurred, which should provide a clearer view of the quarterly performance of each segment. Finally, we also generated strong free cash flow during the quarter, totaling $93 million Year to date, our sustaining capital expenditures are down $22 million However, we expect higher maintenance capital in the fourth quarter, keeping our aggregate sustaining capital within the previously guided $140 million to $160 million range. Turning to the Alberta portfolio. Spot prices averaged approximately $36 in the third quarter, down from $51 in the third quarter of 2025. The decline was primarily due to continued strong supply mild weather, and relatively limited periods of market tightness. We enhanced our margins by fulfilling good portions of our higher priced hedge commitments through power purchases, and monetization of positions when market prices were below our variable production cost. We benefited from approximately 2.5 thousand GWh of hedges at an average price of $65 per MWh which represented a $28 premium to the average spot price. Our gas fleet realized an average merchant price of $55 per MWh which was a 53% premium to the average spot price. Largely due to our dispatch optimization during high price hours. Our hydro fleet also continued to capture merchant upside delivering an average realized price of $43 per MWh, a 19% premium to the average spot price. Our merchant wind fleet realized an average price of $19 per MWh, reflecting increased thermal production in the market and the timing of intermittent wind and solar generation. During the quarter, we also delivered approximately 2.8 thousand GWh of ancillary service volumes at an 11% premium to the average spot price. Through effective fleet optimization, and meeting hedge obligations with purchase power, we can consistently address the ASO's need for reliability products. We continue to have a strong hedge book to support our Alberta business. For the balance of the year, we have approximately 2.1 thousand hours of our Alberta generation hedged at an average price of $67 per MWh. Significantly above current forward pricing. Looking ahead to 2027, we have approximately 6.7 thousand GWh hedged at an average price of $65 per MWh also well above current forward levels. We will continue to opportunistically manage our hedge position to ensure we protect our cash flows while capturing upside as market conditions evolve. Our gas fired steam units continue to operate well below their potential and have the ability to run at significantly higher capacity factors. As higher priced hours emerge, that flexibility allows us to increase our generation and capture additional value. Our fleet decisions position us well for the current pricing environment while preserving meaningful upside as market fundamentals improve. Our focus remains on optimizing the portfolio today while maintaining the flexibility to capture growth longer term. Turning to our financial position, we remain focused on strengthening our balance sheet and maintaining our financial flexibility. Asset recycling continues to be an important lever as demonstrated by the recent sale of a minority interest in our Oklahoma wind portfolio. Longer term, improving Alberta power prices potential contracting of underutilized generation, and the expected cash flows from Centralia post conversion will provide cash flow growth to further strengthen our financial position. We are well positioned to meet our 2026 guidance contracted fleet strong hedge position and consistent optimization provide us with core cash flows even in a low merchant power pricing environment. The net effect of the Colorado acquisition and Oklahoma disposition has a relatively modest impact to 2026, further contributing to the reaffirmation of our guidance. With that, I will turn the call back over to Joel.

Thanks, Mike. As we move through the balance of the year, our priorities remain clear and our focus remains firmly on execution. Specifically, improving our leading and lagging safety performance indicators while achieving strong fleet availability. Delivering adjusted EBITDA and free cash flow within our 2026 guidance ranges. Maximizing the value of our legacy thermal sites by advancing our Alberta data center strategy as well as our coal to gas conversion at Centralia, pursuing strategic M&A opportunities where we see a compelling fit within our portfolio and enhancing our financial strength and flexibility through disciplined capital allocation and cost control. I believe TransAlta offers a compelling investment opportunity built on the strength of the business we have today and the significant opportunities we see ahead. We have operated a safe and reliable power generation fleet for over 115 years. Providing strong and enduring cash flows. This strength is grounded in a diversified portfolio of hydro, wind, solar, storage and thermal assets across 3 countries, enhanced by our industry leading asset optimization and energy marketing capabilities. Our legacy sites continue to represent considerable and increasing value. We are proactively pursuing repurposing initiatives at these facilities to address the growing demand for reliable power in our operating markets. Concurrently, we maintain a leadership position across multiple technologies, consistently prioritizing responsible and reliable generation. We are disciplined in how we grow. Our priority is creating shareholder value as we diversify our portfolio within our core geographies and continue to increase the proportion of stable and contracted cash flows. This strategy is supported by a strong financial foundation, We have a flexible balance sheet and ample liquidity giving us the ability to pursue and deliver multiple growth opportunities while continuing to return capital to shareholders. And finally, and most importantly, we have our people. Everything we accomplish starts with the expertise, commitment, and dedication of our employees and contractors. I wanna thank them for everything they do. To safely and reliably power our customers, execute our strategy and position TransAlta for continued success. Thank you, and I will now turn the call back over to Stephanie.

Thank you, Joel. Andrew, would you please open the call for questions from the analysts?

Certainly. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. 1 moment, please. And our first question comes from the line of John Mould with TD Securities.

Hi, good morning everybody. Maybe just like to start with the mothballing of the Battle River units. Wondering why now just given the soft pricing environment, and let's say, you know, relatively soft, yeah, you know, dispatch volumes that you highlighted in your prepared remarks. And then you know, why the Battle River units versus other lower utilization, coal to gas units? And I am thinking of Sheerness 2 as an example. And how should we think about what market conditions or contracting opportunities you know, could drive returning you know, any of these units to service ahead of the timelines you have laid out?

Yeah. Thanks, John. it is Joel here. You know, I would say that, you know, we spent a lot of time, kind of analyzing this similar to previous mothballs that we have announced. With Battle River, when you look at the capacity factors for both units 4 and 5, they are very low currently, and they were low last year. This is purely an economic decision and really to preserve the long term optionality for both of these assets as load will increase over time with data centers coming into the province. So, again, a lot of time spent kind of analyzing this and how do we kind of lower our costs So it is an economic decision. We communicated this, you know, with the with the government, with the ASO. Nothing to read into it here. We still remain very confident in our ability for data center load to come to the province. This is simply to position these assets really longer term. So as we think longer term, with data center load, expect that we would have long term contracts that would underpin these assets, including potentially Battle River and Ford and V as part of this. So again, a lot of time and consideration was put into this mothball, but it really is an economic decision. And in fact, we are not even-- with the employees there, John, there are 45 employees there that will remain on-site Here and really to ready these assets for the longer term. Here. And as we have mentioned before, 90% capacity factor with very little capital Behind them. So, again, we are just trying to preserve the long term optionality here as load will come to the province longer term.

Okay. Thanks for that. And then maybe just moving on to the data center MOU at Keephills. And, you know, thanks for all that. Information on the open house that you had. You know, there is a reference, as you noted, to up to 1.6 GW. Of capacity there at the original MOU You announced, early in the year referenced 1 GW Has the MOU scope been formally increased to this 1.6 gigawatts? And in terms of timing, you know, you previously pointed to definitive documentation in 2026. Is that still your expectation? Given where you are at in the underutilized generation discussions with ASO and then the bring your own generation process more broadly?

Yeah. John, I would say, you think about 1 way in, we signed the MOU back in February, there were still a lot of unknowns We had our 230 megawatts under phase 1. Of the large load integration. And our customers at Brookfield and CPPI Investments they wanted to look to increase that. And so we said, up to 1 GW at the time, You know, since then, with the data center regulations that we saw from the government back in June, really recognizing that underutilized generation should be considered here as part of-- for it to serve data center load. Allowed us to go up to this 1.6 GW that I would say this is initial. You know, based on the site, what we have today. And so we remain very, you know, encouraged by that. And the ability to think not only how we can serve that 1.6, which would come from, you know, a function of the 230 under phase 1, also, the assets that we have right there with key pills. And Sundance being right next door and really our whole fleet, if you will, along with kinda longer term how we could look to rebuild those facilities here, repower them kind of in next decade. Your question around this year for the definitive agreements, would just say to you that they continue to be ongoing, and we remain very encouraged by it and working very collaboratively with our customers. And cannot say definitively if it will be this year or if sometime, obviously, in 2027. I think once we have a full understanding of what the underutilized generation that we can actually use here will be an important step forward. To really kind of advance the definitive agreements here to the final stage here. So I would not say it is probably 2026. it is probably into sometime early into 2027 at this point in time once we understand exactly the amount that we can offer our customers as it relates to our underutilized generation. Okay. Thanks very much for that, color. I will, I will get back in the queue. Thanks, John.

Thank you. Your next question comes from the line of Mark Jarvi with CIBC.

Yeah, thanks. Good morning. Just picking up on those comments, Joel, just curious in terms of the timeline for the discussions with the ASO and the unrealized assets. Is that is it possible to wrap up by year end and then you move to the final negotiation with Brookfield, CPP, or is that also something that probably you get clarity in early 27?

Yeah, Mark. I cannot really obviously speak for the ACE. So other than we have said before, and it continues to be the case that we work very collaboratively with them, ongoing discussions with the ASO here And, you know, we expect something in the near term. Is all I can say. I do not. We do not have anything definitive at this point in time. As I mentioned, you know, in responding to John's question, I think once we have clarity on what were actually the amount that we have, then, you know, as far as definitive agreements, they will come together. I would expect relatively quickly here given that they are very well advanced at this stage. it is really just trying to fill in the blank, if you will, as to how much we are actually offering beyond kind of our phase 1 allocation here. But, again, discussions remain very on. Very fluid with the ASO, very collaborative. And, you know, we are trying to achieve a common goal here where you know, we know, we wanna bring data centers to the province, but we wanna ensure you know, reliability for the grid along with affordability for Albertans here, going forward.

Just to follow-up on that, Joel, then just with the discussions is, is it the terms of the usage of the assets that is requiring the most effort right now? Is it is it the scope of megawatts? And then on term. In terms of the potential terms around either curtailment or restrictions on the units, can you share anything in terms of what might be amenable or you guys would be comfortable with? On those units?

You know, Mark, I cannot really because it does remain kind of confidential here. We have to respect you know, our discussions that we have with ASO. But I would say it is all the above. Right? We want to ensure that we get it right. Here is to, first of all, what is the allocation? And, you know, how curtailment will work, And I think what we said before is then we have you know, obviously a product that we can then offer to our customers that they can then offer to their customers. And so, again, really is all above you mentioned there. But, again, it remains very constructive at this point and is well advanced. Just cannot give a definitive timeline other than we expect to hear something probably in the near term.

K. And then just on the repowering projects, just curious where you guys see them right now in terms of costing, equipment availability, Are you actively out there looking to price out the repowerings right now? Or is that sort of something that is gonna happen in the next year or 2?

I would say to you that we are. We remain very knowing that the lead times here Mark, are very long. Nothing has really changed from our last update where if you look at for a large frame unit, to get a turbine, for example, you are looking at 5 plus years from the time you actually get into the queue to actually taking delivery. So as we think into-- really, we are thinking into the next decade here as it relates to repowering, here and so those discussions. You know, obviously, we are putting a lot of effort behind it right now. That, just given the lead times that we see. We are in the queue for a large frame unit, which is very good, and we are looking for other opportunities right now. And obviously, forming a business case, for the usage of these units. But I think, you know, really, in the near term, the best use is our unutilized generation. That is the cheapest. And it is speed to power for data centers. And so that is really the focus And then really thinking more longer term how do you repower those facilities? And those are the discussions obviously, we are having with our customers right now. Here. Because, again, they are not gonna sign up for 5, 10 years looking for a longer term as they make large capital investments for data centers. And so, certainly, we have an ability here to power those facilities with their existing generation for the medium term, if you will, and then we would look to repower longer term. Sounds good. Appreciate the comments. Thanks, Mark.

Thank you. Our next question comes from the line of Maurice Choy with RBC Capital Markets.

Thank you, and good morning, everyone. Just wanted to take a step back and look at the power markets more broadly across North America. With the changing market dynamics, policies and politics, in certain power markets in The U. S, have you seen a different tone from your prospective data center customers when they are looking at Alberta as an option?

Yeah, Maurice. I would say the short answer to that is yes. We have, and it is a positive tone. When you look at you know, the moratoriums that are out there today, you just pick a few markets For example, there is moratorium in Texas, Pennsylvania, New York, that. You know? And we know is the demand for power is not abating. that is. it is. Yeah. And we have talked about this before where there is just so much demand far exceeds the amount of power that is kind of available almost in the near term. That all of a sudden when you look at Alberta, here, where there is obviously strong policy support from the government, strong support from the ASO. So we are the only jurisdiction that really, I. I would say, is long power. Within North America. So, again, we talk about, you know, speed to power I think that there is a real opportunity here for Alberta And, you know, again, I applaud the. What, you know, the government and what the ASO have done here. They have been very deliberate and very focused on ensuring we do not want to compromise reliability or affordability here for Albertans. And so as. At times, people might feel a bit frustrated by that, but I think it is very intentional and being very focused not only in the medium term, but the long term. And we have seen what is happened in other jurisdictions where maybe the build out has gone too quickly. And as a result, it requires a lot more infrastructure that you know, results in higher utility bills for customers. And as a result of that, we have seen the moratoriums. So I think all that being said, I think it is been directionally positive here for Alberta as we move forward here to bring, you know, data centers to the province.

Thank you. And if I could just finish off with a deeper exploration about the Battle River mothball position. Taking a little bit of a alternate approach here. When the Heartland generation deal closed, at the end of 2024, I had thought that this unit would have been mothballed a lot sooner and certainly not almost 2 years after the deal closed. Assuming you agree with that, can you just help me dissect what was the outlook for this facility back then and then comparing that outlook to what actually transpired over the last 2 years.

Yeah. I would say, you know, when we looked at. When we closed that back in December 2024, really, at that point in time, you know, data centers and discussion around data centers in Alberta was really starting to come into place, if you will. And so we are very fortunate, actually, when we think about Battle River 4 and 5, when we the initial kind of investment thesis did not contemplate data centers, coming to the province and was thinking probably more of a longer term kind of repowering opportunity for that facility. Knowing that, you know, it is an older facility, has a higher heat rate, and, therefore the capacity factor will not be lower. You fast forward to today where things look a lot differently, and this is what is really encouraging for our employees here at TransAlta when we. When I talk to our folks out in the field, especially for our gas fired steam units, knowing that and we have been saying this all along that you have this surplus capacity. How best can you use it? And ensure reliability within the province And so I think this is a real win where all of a sudden we are bringing new load to the province here with data centers, At the same time, these units will run for longer, and they can run for longer. And that ensures reliability for the province, which is critically important here. So you know, a lot has changed, Mark, since the initial thesis around the Heartland acquisition. But, certainly, right now, looking back on it, it looks like we are very fortunate to have made this acquisition and acquiring it at the multiple that we did, and we got some really great assets out of it. That I think really create a lot of long term optionality for our company here as it relates to data centers and just future opportunities that we see there. Because what we do know is that having steel in the ground is very important When you think about access to natural gas, water transmission, that is 1 thing you see with our units, whether it is Battle River 4 and 5, Sheerness 1, Sundance 5. You pick any 1 of them. They all have that in common that they are ideally situated. They are located on industrial lands too, which is important because we hear a lot about nimbyism. And, really, that is. We do not see that here. We are very actively engaged with our stakeholders in these regions, and looking for future development here, and these are assets that have been around for decades. And we hope that they are around for decades to come here. it is great to have optionality. Thank you very much for that. Thanks, Maurice.

Thank you. Our next question comes from the line of Benjamin Pham with BMO.

Hi, thanks. Good morning. I know you mentioned that you are waiting for the ISO outcome respecting the unutilized capacity to perhaps firm up a definitive agreement for the Keephills/Boreal project. You did mention that you need to wait to the phase 2A intake results to drive that. Is there a reason for that?

You know, I would say, Benjamin, you know, first of all, again, I mentioned earlier, we. We are we are well advanced with the Phase 1, the 230 MW. And, you know, and, you know, when-- as I mentioned earlier, when we announced the MOU back earlier, you know, I guess, February, we talked up to 1 GW. Well, we now know that could be a higher number and you saw that from the open house here. They are linked together that. You know, we are not only looking for 32, but how big can this be? And so our team here is working very closely with the teams at Brookfield and CPPI around that. Put those definitive agreements in place here. So it is important to kind of understand, you know, how big are we talking about here. And, again, I think we are. You know, hopefully, we will hear back in the near term around our underutilized generation of what that will kinda constitute. And then from there, would expect that the definitive agreements you know, I would expect would come together relatively, you know, quickly after that.

Okay. Got it. And Joel, you mentioned earlier you are defining the 1.6 at Boreal as phase 1 Can you unpack that a bit? Is that analogous to the green light project where they broke it up into to 2 phases, but they called it 1 phase.

I mean, I am not sure, Ben, if. or-- Ben, I am sorry, if I look at it that way. I think when I look at the 1.6 GW, you know, and that we showed this at our. At the open house where, you know, kind of call phase 1 is the kind of initial you know, data center, which would be kind of 1 facility, which would be around 230 MW up to, say, 300 MW. And then going from there, I think we could have up to 6 facilities on that site there. So I am not comparing this to Greenlight. I am looking at this as you know, kind of. Just kind of in phases. And what we wanna show phase 1 because, of course, we have clarity on that allocation at 230 MW. So at the open house, we really kind of focused on that, and we talked about kind of the water usage, for example, that we would see for phase 1. We talked about the economic benefits the number of people we would employ for phase 1. But, again. And as we learn more about what the ultimate you know, how much we have, then we will be able to share more there. But that is the way I kinda look at this is it is kind of in. Kind of within phases within our project. You know what I mean. Okay. that is very helpful. Thank you. Thanks, Ben.

Thank you. And our next question comes from the line of Robert Hope with Scotiabank.

Good morning, everyone. Maybe a follow-up question on You know, as you are thinking about the build-out of Keephills. You know, when you are envisioning that 1 moving up to 1.6, would that all be under kind of Brookfield/CPP agreement, or are you envisioning know, the potential kind of, we will call it, further phases to be supported by other customers? And are you in discussions regarding that?

Yeah, Robert. You know, obviously remain very focused working with Brookfield and CPPI on this as evidence by the open house and up to the 1.6 GW. But we do have the optionality, if you will, to work with others, here. And so, you know, our focus, again, wanna keep everybody laser focused on the prize here and really thinking about what we have got here at Boreal. With our with our partners. But to the extent that we see further-- the ability to do more, then it could be with them, but it also could be with the other customers. As you can well imagine, there is a lot of interest you know, given as I mentioned earlier, where we do have moratoriums elsewhere within North America. Where I think there is a lot of focus on Alberta at this point in time. But we do remain focused working, you know, on the Boreal Technology Hub with our partners. But it does not preclude us to working with others as well.

Alright. Thanks for that. And then maybe a broader question just in terms of recycling of capital. So we saw the transaction in Oklahoma couple of weeks ago. How are you thinking about monetizing other assets in our non-core geographies? And you or modalities?

Robert, it is Mike. Maybe I will take this 1. Yeah. So asset recycling important for us right now. it is going to play a part in getting our balance sheet back to where we want it to be. Happy with the start that we had with the Oklahoma sale and the proceeds we brought in there, partnering with Ares great partner, and happy with how that transaction played out. If you look going forward, the internal team here is continuing to move and advance other opportunities. Think we have talked before around the size of our portfolio. We have over 90 assets in the portfolio. Many of them are out of our outside of our core areas. Lots of smaller assets that are not contributing much, and you saw that actually during the quarter, we moved out a small asset and brought in $27 million kind of under the radar, but there is lots of opportunities within the portfolio that we can look to monetize and bring in proceeds. We are gonna be we are gonna be patient. We are going to be thoughtful. We would better ensure the deals are making sense and we are bringing in fair value. But for sure, the team has stood up and advancing other initiatives and I guess stay tuned for further progress on this front. Thank you.

Thank you. As a reminder, to ask a question, please press *11 on your telephone. Our next question comes from the line of Patrick Kenny with National Bank.

Capital Markets. Good morning. Joel, just back on Boreal. Sounds like there was not much in the way of negative feedback from the open house, but perhaps you can confirm if there are any key concerns from the community that you might look to address at your November 12th meeting, and, you know, how you might be positioning the project to address or get ahead of any of those outstanding issues.

Yeah. You know, thanks, Patrick. You know, I would say, overall, we were very pleased, with the open house. It ran for 4 hours. There was just over 180 people there. A lot of, obviously, local folks there, very interested in the project. You know, I think, you know, the takeaway was you know, they wanna understand more, you know, around data centers. it is still, even though we talk a lot data centers, it is still relatively new. And, you know, they have questions around, you know, for example, like, what is the amount of noise that will come from the facility? You know, what is the amount of water would be used, for example? And these will be covered in further details, part of the technical sessions, you know, going forward here, really to address know, any kind of concerns or questions that key stakeholders may have around that. But I would say, overall, Patrick, we were very pleased. I thought the team did a really great job being very well organized. We had kind of like 30-something storyboards, if you will, there at the at the site. So that people can walk around and ask questions of the team and so it was very, very engaging. There is no protests or anything like that. It was really people just trying to get more information And, again, I think this is something, you know, for TransAlta We have been in this area for over 70 years with the key bills and Sundance facilities. So it is certainly an area that we are very familiar with. We are very engaged with the local communities and First Nations as well. And I would say, overall, we are very pleased with the outcome, and we look forward to the next kind of technical sessions here, which will, I think, do more of a deep-- a deeper dive on some of the technical questions that arise, as I mentioned earlier, from a from a project of this size.

Okay. Thanks for the additional color there. And then I guess, early days on getting the keys to the Colorado facility, but I am curious if there are any early indications or opportunities that you might be seeing to leverage your position in the region to either expand your presence in the US WECC market, either from a trading or additional M&A perspective?

Yeah. I would say, Patrick, this goes back to, you know, when we announced the transaction, you know, back in June, kind of our thesis around making this acquisition. You know, as you, you know, highlighted there, you know, when we look at the WECC, like the Western United States, it is a core market, core geography for us. And today, do not have a lot, or we did not prior to the acquisition, is really our investment, you know, in Centralia. Now having 2 brand new facilities of 318 MW, fully contracted for 26 years with 2 very high quality counterparties. I think, does create a lot of opportunity for us, you know, going forward, within Colorado. Today, Colorado burns roughly 20% to 25% of its power is from coal, and they will move off of coal to natural gas. So I think that in and of itself can create an opportunity here for TransAlta that we did not have prior to making this acquisition. We also have a new partner, if you will, with Kindle through Blackstone. This is who we acquired the assets from. Where they are looking for other opportunities as well within the WECC. That certainly TransAlta might be able to partner with them and especially really leveraging our marketing and trading capabilities, as you mentioned here, as they look for, you know, future development there. So I think it is again, a real opportunity here for us, early days, but now we have a platform to really build off within a core market for us. So I am very happy with the with the transaction. It closed kind of on time, and the commissioning went extremely well with the with the last unit coming online. And Christopher D. Fralick had the opportunity to be out there on Friday and came away very encouraged by the team there and the and the, obviously, the assets. And now we will look for future opportunities there to further develop our presence in Colorado and within the West. Okay. that is great. Thanks, Joel. Thanks, Patrick.

Thank you. There are no further questions at this time. I would now like to turn the conference back to Stephanie Ann Paris for closing remarks.

Thank you, everyone. That concludes our call for today. You have any further questions, please contact the TransAlta Investor Relations team.

This concludes today's conference call. You may now disconnect.