TransAlta Corporation (NYSE:TAC) Q4 2023 Earnings Call Transcript

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And we saw the consequences that could arise just last month when we had temperatures that were approaching minus 40%, and we were on the edge in terms of maintaining the reliability of the grid. So it’s really a last ditch (ph), at least our view would be that it’s really that last ditch insurance policy kind of approach and the thinking of the government, at least based on our discussions with Upstate.

Patrick Kenny: Okay. Thanks for that. And you touched on the CER, John. Maybe just delving into that a little bit more and thinking about this potential shift towards emissions limit versus intensity performance standards. Curious your thoughts on how these changes might impact your outlook for optimizing generation or overall margins for your fleet going forward as well?

John Kousinioris: Yeah. It — so as you know, the federal government came up with kind of a thought paper really on the CER. We’re obviously responding and engaging with them as they go through the process. I think it caution is still a lot piece for them. I don’t know that folks should be viewing it as kind of tangible accepted proposals from the federal government in terms of where they would evolve the CER. So I think there’s still an open question as how they would proceed. But I would say in respect of what we’ve seen, directionally, I think it’s positive for where we are. I think, one, the emergency provisions that they had before, I think were unworkable, they’re much, much better. Now in terms of letting the province touch on whatever generation it needs in a circumstance when there is an emergency and they need to ensure reliability.

I think in terms of unabated gas and to your point, moving specific performance factor, more to an envelope of emissions is the way I think of it. It’s also positive. And I think our view, at least based on the work that we’ve done today would suggest that it provides more room certainly for peakers to be able to run to ensure, again, the reliability of the system going forward. So directionally, I would say, helpful in terms of where we are, certainly in the context of the Heartland Generation transaction and our broader fleet. But Patrick, the Temple will be in the details, right, in terms of where we are. And we still have a lingering concern that although the signaled flexibility is helpful, we may actually need a bit more to ensure that the grid remains reliable in the province of Alberta and what they’re proposing.

Patrick Kenny: Okay. That’s great, John. I appreciate your comments.

John Kousinioris: Thank you.

Chiara Valentini: Okay. Well, thank you, everyone. That concludes our call for today. If you have any further questions, please don’t hesitate to reach out to the TransAlta Investor Relations team. Thank you, and have a great day.

John Kousinioris: Thanks everyone.

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