TransAlta is trying to turn a merchant Alberta generator into a more contracted North American independent power producer, and the second-quarter print shows both halves of that story at once. Hedging and hydro-plus-wind environmental credits kept cash coming in even as Alberta spot power sat at $29 per megawatt-hour. The strategic move is the Blackstone-sourced Colorado peaker purchase, not the headline earnings swing. Whether that contracted add-on, plus a still-unsigned Keephills data-center offtake with Brookfield and Canada Pension Plan Investments, can replace Alberta merchant rent is the equity debate.
Adjusted earnings before interest, taxes, depreciation and amortization still declined to $291 million because hydro and energy marketing gave back more than the gas fleet added. Free cash flow of $143 million covered the raised common dividend with room to spare, yet it also declined as Centralia Unit Two produced nothing after coal operations ended. S&P Global Ratings affirmed the BB-plus issuer rating in late July and moved the outlook to negative, citing Alberta prices and a Colorado deal that the agency treats as high-leverage. The hedge book is doing the job the spot market is not.
Common shareholders booked $35 million of net earnings after a year-ago loss, helped by smaller mark-to-market hits after the company adopted hedge accounting. Guidance for adjusted earnings before interest, taxes, depreciation and amortization sits in a $950 million to $1,050 million band. That range was left unchanged and still excludes Colorado. The next several months resolve whether Canyon Peak reaches commercial service so the United States peakers can close, and whether the Keephills memorandum becomes a firm power-purchase agreement before next-year hedges have to carry a still-soft Alberta stack.