TransAlta Corporation

Good morning. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcome everyone to TransAlta Corporation's first quarter 2021 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Ms. Valentini, you may begin your conference.

Great. Thank you, Rebecca. Good morning, everyone, and welcome to TransAlta's first quarter 2021 conference call. With us today are John Cousineiros, President and Chief Executive Officer, Todd Stack, EVP Finance and Chief Financial Officer, and Carrie O'Reilly-Wilkes, EVP Legal, Commercial, and External Affairs. Today's call is being webcast, and I invite those listening on the phone lines to view the supporting slides that we have posted on our website. A replay of the call will also be 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 qualifications set out here on slide two, further detailed in our MD&A and incorporated for the purposes of today's call. All amounts referenced during the call are in Canadian currency unless otherwise stated. The non-IFRS terminology used, including comparable EBITDA, funds from operations, and free cash flow are also reconciled in the MD&A for your reference. On today's call, John and Todd will provide an overview of the quarter's results along with expectations for the balance of 2021. After these remarks, we will open the call for questions. And with that, let me turn it over to John.

Good morning, everyone, and thank you for joining us on our first quarter call in 2021. As part of our commitment towards reconciliation, I want to begin by acknowledging that TransAlta's head office, where I am today, is located in the traditional territories of the Nitsitapi and the people of the Treaty 7 region in southern Alberta, which includes the Siksika, the Pagani, the Kainai, the Tsitsina, and the Stony Nakoda First Nations, as well as the home of the Métis Nation Region 3. We had an exceptional first quarter. I'm very pleased with the performance of our team and the headway that we're making in advancing our priorities. Our portfolio delivered a 41% increase in comparable EBITDA, which resulted in a 23% increase in free cash flow per share compared to the first quarter of 2020. Our performance was led by the exceptional results of our Alberta hydro fleet with strong contributions from our energy marketing segment, which had an excellent start to the year with favorable trading results across North America. and our wind fleet. We experienced a strong power market in Alberta during the quarter, as all generation was fully dispatched on a commercial basis, given the transition to a fully merchant market, which happened on January 1st of this year. This benefited our hydro fleet, in particular from an energy and ancillary services perspective. And later on in our presentation, Todd will highlight the value of our diversified fleet in the Alberta market. We continue to make progress on our growth targets for 2021. Last week, we were pleased to announce the launch of our Garden Plain wind project, and we're very excited to have Pemina Pipeline as a cornerstone customer to support its commercialization. During the quarter, we also made progress on a number of our key priorities. We advanced construction of our 207-megawatt windrise facility in Alberta, despite the ongoing challenges posed by COVID-19. We were about 84% complete, as of March 31st and expect to achieve COD in the fall. We are now midway to successfully completing our coal-to-gas conversion initiative. The Sundance 6 and Sheerness conversions were completed earlier this year, and our Keep Hills 2 conversion is currently underway. The Keep Hills 3 conversion is set to be completed in the fall, and with the closure of the Highvale mine effective December 31, all of our Alberta thermal facilities will be off coal and generating solely on lower carbon natural gas. We have largely completed the planning and detailed engineering design for the Sundance 5 repowering project. The plant's detailed design has increased steam production, resulting in slightly higher overall output, which we now expect to approach 750 megawatts. In addition, a decision was made to upgrade the high-pressure steam turbine as part of the repowering scope to allow for maximum operating flexibility in the unit going forward. Project costs have increased to account for changes in final design, which has resulted in a new estimated capital cost range for the project of between $900 and $950 million. We're also actively evaluating carbon capture and storage solutions for eventual adoption by the unit. We continue to maintain liquidity in excess of $2 billion in support of our coal-to-gas conversion initiative, Sundance 5 repowering, and our 2.5 gigawatt growth pipeline, and we are well positioned to fund our current plans with existing balance sheet capacity. We renewed and extended our credit facilities at both TransAlta and TransAlta Renewables during the quarter and are pleased to announce that we have extended and converted our syndicated credit facility into a sustainability-linked loan. This loan aligns our cost of borrowing to our greenhouse gas emissions reductions and gender diversity targets. This further underscores our company's commitment to our ESG goals. Finally, we announced that we won't be proceeding with the KBOB cogeneration facility with Energy Transfer Canada and that we've commenced an arbitration proceeding against them for wrongful termination of the agreement. As I look at our strategic priorities for 2021, our goal is to be the supplier of choice for customers that are focused on sustainable growth and decarbonization. We remain focused on advancing our three core operating pillars, TransAlta Renewables, Alberta Hydro, and our Thermal Generation Group. And the last two of those groups underpin our Alberta business. These operating pillars are supported by our world-class energy marketing team, as well as our experienced corporate teams. As I noted earlier, we're commencing the Garden Flame project and are extremely excited to have a great Alberta-based company like Pembina as a new customer to make it a reality. Working with customers like Pembina to create low-cost, reliable energy solutions in support of their sustainability goals is a cornerstone of our strategy. The project will have 130 megawatts of capacity, and is backed by an 18-year agreement for 100 megawatts of the capacity, along with the associated environmental attributes. We expect the project to deliver approximately $17 million in comparable EBITDA in 2023. We're scheduled to commence construction this year and expect the wind facility to be in commercial operation during the latter part of 2022. This project will be TransAlta's 11th wind farm in Alberta, and will increase our North American wind fleet to over 2 gigawatts of capacity. We remain customer-centered on growth with our unique offerings and breadth of our portfolio to deliver clean power solutions to our customers. A key element of this goal is expanding our renewables business with the objective of advancing two new wind projects this year, one in Alberta and the other one out of our U.S. wind development portfolio. And we're well on our way to delivering on this goal with our garden plane wind project. We currently have an additional 500 megawatts of advanced stage wind project in our growth pipeline, which have the potential to be commercial in the 2023 to 2024 timeframe and are actively marketing these opportunities to various customers within Canada and the United States. We also have over two gigawatts of earlier stage opportunities in various geographies and with various technologies. Our development team is being kept busy in Canada, Australia, and the United States. We're working to create customized power solutions to meet our customers' ESG objectives in a cost-effective manner. I'll now turn it over to Todd to take us through our financial results for the quarter.