TransAlta Corporation

Good morning. My name is Liviana. I'll be a conference operator today. At this time, I would like to welcome everyone to TransAlta Corporation's second quarter 2025 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 1 1 on your telephone keypad. If you would like to withdraw your question, please press star 1 1 again. Thank you. Ms. Paris, you may begin your conference.

Thank you, Livia. Good morning, everyone. My name is Stephanie Paris, and I am the Vice President of Investor Relations and Corporate Strategy of TransAlta. Welcome to TransAlta's second quarter 2025 conference call. With me today are John Cusinouris, President and Chief Executive Officer, Joel Hunter, EVP Finance and Chief Financial Officer, Blaine VanMell, EVP Commercial and Customer Relations, and Nancy Brennan, EVP Legal and External Affairs. Today's call is being webcast, and I invite those listening on the phone line to view the supporting slides that are posted on our website. A replay of the call will 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 detailed further in our MD&A and incorporated in full for purposes of today's call. All amounts referenced are in Canadian dollars unless otherwise noted. The non-IFRS terminology used, including adjusted EBITDA and free cash flow, are reconciled in the MD&A for your reference. On today's call, John and Joel 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 John.

Thank you, Stephanie. Good morning, everyone, and thank you for joining our second quarter conference call for 2025. As part of our commitment towards reconciliation, I want to begin by acknowledging that our company operates on the traditional territories of Indigenous peoples across Canada, Australia, and the United States. We recognize the rich and diverse histories, cultures, and contributions of the First Nations, Inuit, Métis, Aboriginal, and Native American communities. And it is with gratitude and respect that we thank the peoples who have lived on these lands for generations for reminding us of the ongoing histories that precede us. TransAlta delivered exceptional results during the second quarter. Our Alberta portfolio's hedging strategy and active asset optimization generated realized prices well above spot prices, while our hydro and wind assets provided significant environmental offsets to our gas fleet's carbon compliance obligations. highlighting the value of our diverse and integrated generating fleet. We were also pleased with the performance of our contracted fleet, which exceeded our expectations. During the quarter, we delivered adjusted EBITDA of $349 million, free cash flow of $177 million, or $0.60 per share, and average fleet availability of 91.6%. We also successfully recontracted our Melancthon 1, Melancthon 2, and Wolf Island wind facilities in Ontario. The new contracts will replace the current energy contracts for the three wind facilities when they expire, extending their respective contract dates to 2031 for Melancthon I and to 2034 for Melancthon II and Wolf Island. Wholesale electricity prices in Ontario are rising, signaling a growing tightness in the supply and demand balance in the province, which sets our fleet up well for recontracting in the next decade. We continue to engage directly with the government of Alberta and the ISO on the Alberta data center strategy and their approach to large load integration, as well as the restructured energy market design or REM. In June, the ISO released details on phase one of its approach to data centers, which involved the allocation of 1,200 megawatts of system capacity to data center proponents within the province, including TransAlta. The ISO has now commenced work on phase two of its data center strategy, which will establish the framework for incremental data center development in the province. The government of Alberta continues to express their commitment to the development of a data center industry in a manner that enables investment while maintaining an affordable and reliable electricity system. And we remain confident that the province will develop a framework that will support our data center ambitions, which in turn will see significant investment dollars come to Alberta. Turning more specifically to the work that we're doing in realizing the value of our legacy generation sites, we're pleased with the progress that we're making on our Alberta data center strategy and the associated commercial negotiations, which now reflect the ISO's approach to large load integration. The ISO currently expects demand transmission service contracts to be executed in mid-September, which will secure each proponent's access to system capacity. We continue to work closely with our counterparties and are progressing towards the execution of a data center memorandum of understanding in relation to our system capacity allocation. We're excited about the data center opportunity in Alberta, both for the meaningful investment it brings to the province, as well as the anticipated increase in load, which we expect will rebalance the current oversupply of generation in the province, an added benefit for our diverse Alberta portfolio. At our Centralia site, we're actively engaged in commercial negotiations and continue to target executing a definitive agreement before year end. We expect to be able to share detailed development plans for Centralia in the coming months as we firm our plan forward for the site.