Operator: Good morning. My name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to TransAlta Corporation's First Quarter 2020 Results Conference Call. Note that all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

And if you would like to ask a question during this time, simply -- and if you would then -- thank you. Ms. Valentini, you may begin your conference.

Chiara Valentini: Thank you, Sylvie. Good morning, everyone, and welcome to TransAlta's First Quarter 2022 Conference Call.

With me today are John Kousinioris, President and Chief Executive Officer; Todd Stack, EVP Finance and Chief Financial Officer; and Kerry O'Reilly Wilks, 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 are also posted on our website. A replay of the call will be available later today, and the transcript will be posted to our site shortly thereafter. All of 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&A and incorporated in full for the purposes of today's call. All amounts referenced during the call are in Canadian currency unless otherwise noted.

The non-IFRS terminology used, including adjusted EBITDA, funds from operations and free cash flow are reconciled in the MD&A for your reference. On today's call, John and Todd will provide an overview of the quarter's results. And after these remarks, we will open the call for questions. With that, let me turn the call over to John.

John Kousinioris: Thank you, Kiara.

Good morning, everyone, and thank you for joining our first quarter results call for 2022. As part of our commitment towards reconciliation, I want to begin by acknowledging that TransAlta's head office, where we are today is located in the traditional territories of the Niitapi, the people of the Treaty 7 region in Southern Alberta, which includes the Siksika, the Pagani, the Kini, tesetina and the Stony Nakoda First Nations as well as the home of Mat Nation Region 3. TransAlta had a solid first quarter, and I'm proud of the progress we have made in advancing our priorities and in the performance of our company and our employees. We delivered $266 million of adjusted EBITDA and free cash flow of $115 million or $0.42 per share, both broadly in line with our expectations for the quarter. We focused on optimizing and economically dispatching our fleet and delivered operational performance, which enabled us to run during periods of peak pricing in Alberta.

The prices realized by both our Alberta Hydro and Alberta gas fleets were in excess of average spot prices in the quarter and are reflective of the value and peaking nature of our diversified fleet. During the quarter, we also delivered on a number of key priorities. On the growth side, our development team secured 200 megawatts of renewables growth with the announcement of the Horizon Hill wind project with Meda, formerly known as Facebook, as well as the Mount Keith transmission expansion project in Western Australia with BHP. We executed a PPA for the remaining 30 megawatts of capacity at our 130-megawatt Garden plain wind facility with an investment-grade counterparty, Garden Plan is now 100% contracted with 2 great counterparties. And we are now able to share with you that Amazon is our corporate customer at the White Rock Wind projects.

I remain confident in our ability to deliver on the remainder of our 2-gigawatt clean electricity growth plan. We're targeting to reach investment decisions on another 200 megawatts of renewables growth later this year and are on track to deliver on our annual target of 400 megawatts for 2022. Switching to our recontracting activities at Sarnia, I can now confirm that we have entered into additional contract extensions with all 3 remaining industrial customers at the facility. This is a significant achievement with PPA renewals now in place with all of our industrial customers at the site, setting the facility up well for contracted life extension into the 2030s. On the coal transition side, we have fully retired both Key pills Unit 1 and Sundance Unit 4 and now no longer have operating coal units in Canada.

Our coal transition is among the most meaningful carbon emission reduction achievements in the country, representing 9% to 10% of Canada's 2030 emissions reductions target. Overall, we have reduced our annual CO2 emissions by 29 million tons as compared to 2005, including 3.9 million tons of annual reductions in 2021, a 24% reduction year-over-year. The recently announced policy directions from the federal government support our decisions and validate our strategic shift. Government policy announcements, particularly the Federal discussion paper on the clean electricity standard and the 2030 emissions reductions plan confirm that new natural gas generation faces growing policy and economic risks. Our principal focus is now on developing renewable projects that meet the growing demand for electricity in a manner that is aligned with global carbon goals as we outlined at our Investor Day last year.

Identifying alternative pathways to deliver reliability while pursuing a path to net 0 is critical for our company, and we have established an internal energy innovation team with a mandate to do just that. In addition to the recent investment we made in Icona to help advance our hydrogen technology platform, we have made a $25 million commitment to Energy Impact Partners Frontier Fund. This fund is focused on making investments in companies with transformative technologies critical to deep decarbonization, including long-term storage, novel generation and industrial decarbonization. All of this is directed at taking a targeted approach to diversification and defining the next generation of power solutions for our company. We continue to make considerable progress on advancing our EBITDA contribution from renewables assets.

With the addition of the Windrise and North Carolina solar facilities last year, our EBITDA contribution from renewables and storage assets reached 53% in the quarter, another step toward our target contribution level of 70% by the end of 2025. As a result of the progress we've made in advancing our clean electricity growth plan, our ESG rating with Morgan Stanley Capital International was upgraded from BBB to A. And finally, in March, we were active with our normal course issuer bid and returned $18 million to our shareholders through the buyback of 1.4 million common shares. In April, we entered into a long-term PPA with Meta for the full output from the 200-megawatt Horizon Hill wind project in Oklahoma. The delivery of low-cost, reliable and clean electricity from Horizon Hill supports Meta's sustainability goals and will bring our wind fleet in the United States to almost 875 megawatts.

We commercial operation of the wind farm is expected to be achieved in the second half of 2023, and annual EBITDA from the project is expected to be between USD 27 million and USD 30 million. Similar to our White Rock project, over 90% of the project capital costs have been fixed under a turbine supply agreement with Vestas and an EPC agreement for the construction of the project with infrastructure and energy alternatives. Horizon Hill will be our eighth wind facility in the U.S. We're also excited to announce the expansion of the Mount Keith transmission system in Western Australia to support the Northern Gold field-based operations of BHP. The project will facilitate the connection of additional generating capacity to our network to support BHP's operation and increase their competitiveness as a supplier of low-carbon nickel.

The project is being developed under the existing PPA with BHP, which has a 15-year term. Construction capital is estimated to be between AUD 50 million to AUD 53 million, and the project is expected to be completed in the second half of 2023 and generate annual EBITDA in the range of AUD 6 million to AUD 7 million. We see considerable opportunities for TransAlta as the race to decarbonize unfolds over the next decade. We plan to deliver 2 gigawatts of new renewables capacity by 2025 by deploying $3 billion of capital with the target of achieving cumulative annual EBITDA from the projects of $250 million by 2025. We're just over a year into the execution of the plan, and we're proud of the progress that we have made.

We've secured 800 megawatts of growth projects across Canada, the U.S. and Australia, representing 40% of our 2 gigawatt target by 2025. And combined, these projects will contribute approximately $137 million in EBITDA once fully operational, providing 55% of our 5-year incremental annual EBITDA target of $250 million. As I turn now to our U.S. development pipeline, we've highlighted that the Horizon Hill project has moved from the advanced development category into the under construction category.

And we still have over 750 megawatts of potential development sites in the U.S. across a number of projects in several key markets. The demand for renewables remains strong in the U.S., and we see plenty of opportunity for growth in that market, and we're actively looking at a number of opportunities to grow our development pipeline there. We recently added a new wind development site to the pipeline and expect to continue to add projects to our pipeline over the course of 2022. We -- we remain disciplined on growth in Canada, primarily here in Alberta.

Our Tempest wind project has moved up to an advanced stage of development, and we continue to see demand for renewable PPAs in the market from corporate customers. Our team is actively seeking opportunities to contract our sites and advance our projects into the construction phase. And in Australia, we've moved the Mount Keith transmission expansion projects to the under construction phase. We're definitely seeing growing opportunities in Western Australia in support of our remote mining customers, and we're advancing several opportunities there and expect to reach final investment decision on additional projects with BHP and others in coming months. I'll now turn it over to Todd to take us through our financial results for the quarter.

Todd Stack: Thank you, John, and good morning, everyone. In Alberta, our hydro, gas, energy transition and wind facilities are dispatched as a portfolio in order to benefit from baseload and peaking energy sales. And in the first quarter, the fleet generated just over 2,500 gigawatt hours of electricity. We've positioned our fleet to firm renewables and provide capacity and energy when needed by the grid. Strong pricing throughout the quarter resulted in the average pool price for Q1 settling at $90 per megawatt hour.

This was slightly softer than the average price in Q1 of 2021 of $95 and capacity factors were lower than our expectations as price volatility was more muted this year than in 2021. The lower price and lower volatility was mainly due to warm weather and fewer planned and unplanned outages across the province compared to last year. In the quarter, the company was well hedged on both power and natural gas. However, given the significant increase in the spot price of natural gas, combined with the current carbon price levels, coal-fired generation had the marginal cost advantage in the quarter. Given these market conditions, we optimized the fleet through daily assessments and made choices on whether to dispatch down our units and supply our customers through the market.

This also allows us the opportunity to resell any unused gas that was hedged and also avoids higher emissions and corresponding carbon costs. As carbon costs continue to rise and other coal-fired units in the market become less competitive and retire or are converted, we expect to see stronger correlations between natural gas and power prices in the near future as offers from generators will fully reflect the price of gas. During the quarter, the gas and energy transition units realized a premium of 14% over spot price with a realized merchant price of $103 per megawatt hour. With our Alberta fleet now fully converted to natural gas, our carbon compliance costs have decreased by over 50% from $19 a megawatt hour in Q1 of 2021 to $9 per megawatt hour in the first quarter of 2022. The ability of our hydro fleet to capture peak pricing was demonstrated again in the quarter, with realized merchant prices of $108 per megawatt hour, which represented a 20% premium over the average spot price.

Ancillary services revenue in the quarter was lower due to the lower average pool price and lower volatility. A lower contribution from ancillary services resulted in the reduced EBITDA from the Hydro segment. Our merchant wind fleet in Alberta performed extremely well. Not only did we benefit from a strong wind resource, the fleet also benefited from strong on and off peak pricing and realized an average merchant price of $58 per megawatt hour. Looking at the balance of 2022, we have approximately 4,900 gigawatt hours of our Alberta gas generation hedged at an average price of $73 per megawatt hour and $40 million of GJs of natural gas hedged at approximately $3.

In addition to our contracted production, we continue to retain a significant open position in order to realize higher pricing during times of peak market demand, and we see forward prices for the balance of the year in the $112 per megawatt hour range. Our performance in Q1 was led by the wind and solar fleet, which delivered a 17% increase in adjusted EBITDA from $76 million in the first quarter of 2021 to $89 million this quarter. The increase was driven by incremental contributions from the Windrise facility as well as the North Carolina solar facility and higher wind resource. This increase was partially offset by the extended outage at Kent Hills. Operations and adjusted EBITDA from the Gas segment, which includes our contracted assets as well as our Alberta merchant fleet was largely in line with 2021.

Adjusted EBITDA from the Energy Transition segment decreased 69% year-over-year due to retirement of KeyPills Unit 1 at the end of 2021 and lower production and higher coal cost at Centralia. Our energy marketing team delivered results consistent with our normalized expectations for the segment with $27 million in adjusted EBITDA. Overall, TransAlta's results were in line with our expectations. I want to thank all of our employees for their performance in delivering the quarter. I'm going to turn now to highlight our longer-term trends for free cash flow and EBITDA performance and the continuing financial strength of the company.

In the first quarter, we delivered EBITDA of $266 million, broadly in line with our expectations and consistent with our 2022 EBITDA guidance range. Free cash flow of $115 million or $0.42 per share was also in line with our expectations and also consistent with our 2022 free cash flow guidance range of $455 million to $555 million. In the quarter, DBRS reaffirmed our BBB low stable rating, and we still expect to refinance our November 2022 debt maturity before it matures. Our treasury team has been proactive and have secured interest rate locks to protect us against rising interest rates. Our balance sheet and liquidity remained very strong.

We closed the quarter with over $2 billion of liquidity, including approximately $1 billion in available cash. This positions us extremely well to fund our future growth pipeline, including our 680 megawatts of projects under or soon to be under construction. Before I turn things back to John, I'll turn to TransAlta Renewables. Our operating wind and solar assets as well as the majority of our contracted gas assets are held within TransAlta Renewables and are fully consolidated in TransAlta's results. Overall, the quarter's results marked the full addition of 428 megawatts of contracted growth generation in each of our core operating regions in 2021.

Despite the ongoing suspension of operations at Kent Hills, R&W's results for the quarter have demonstrated the resilience of the diversified fleet and the value of the 2021 growth investments. For the first quarter, TransAlta Renewables delivered $139 million of adjusted EBITDA, an increase of $16 million compared to the same period in 2021. The increase was a result of incremental production from our growth projects and strong wind resource during the quarter. With respect to Kent Hills, we're expecting to finalize our rehabilitation plan and conclude our negotiations with New Brunswick Power very soon. We are pleased to say that we have an agreement in principle with NB Power that includes, among other things, a term that now goes to December 31, 2045, under each of the 3 PPAs.

Further, our discussions with the project lenders are in advanced stage, and we expect to obtain their final consent during the second quarter, at which time we will be in a position to commence construction. The estimated rehabilitation cost has increased in excess of our previous range and is now estimated at $120 million, including contingency and the net impact of replacing the failed turbine. The increase is due to a more robust foundation design, inflationary cost pressures and an acceleration of the schedule. We will provide a further update on expected expenditure, commercial terms and construction time lines as terms are finalized. We have strong liquidity at R&W for the upcoming funding needs.

In addition to our $700 million committed credit facility, we had $278 million of cash at the end of the quarter. And with that, I'll turn the call back over to John.

John Kousinioris: Thanks, Todd. As I look at our strategic priorities for 2022, our primary goal is to continue delivering clean power solutions to and be the supplier of choice for customers that are focused on sustainable growth and decarbonization. In 2022, we're focused on progressing the following

key goals: reaching final investment decisions on the equivalent of 400 megawatts of additional clean energy projects across Canada, the United States and Australia, and we're on track, having secured 200 megawatts so far this year, achieving COD on the Garden Plain wind and Northern Goldfield solar projects, progressing construction on our U.S.

wind projects at White Rock and Horizon Hill and advancing our Mount Keith transmission expansion project in Western Australia, expanding our development pipeline with a focus on renewables and storage, recontracting with the ISO at Sarnia in Q3, progressing the rehabilitation of Kent Hills wind, which we expect to be able to provide more details on later this quarter, achieving EBITDA and free cash flow within our guidance ranges and advancing our ESG objectives, which includes reclamation work at Highvale and Centralia, providing indigenous cultural awareness training to all of our employees and achieving at least 40% female employees by 2030. I'd like to close by highlighting what I think makes TransAlta a highly attractive investment and a great value opportunity. First, our cash flows are resilient and are supported by a high-quality and highly diversified portfolio. Our business is driven by our contracted wind and solar portfolio, our unique reliable and perpetual hydro portfolio and our efficient gas portfolio, all of which are complemented by our world-class asset optimization and energy marketing capabilities. Second, we're a clean electricity leader with a focus on tangible greenhouse gas emissions reductions.

We have adopted a more ambitious CO2 emissions reduction target of 75% by 2026 from 2015 levels and are committed to setting a science-based emissions reduction target this year. In addition, our focus on removing systemic barriers through our commitment to equity, diversity and inclusion and good governance shows our commitment to leadership across all dimensions of ESG performance. Third, we have an extensive and diversified set of growth opportunities and a talented development team focused on realizing its value. Our execution is on track, and we delivered on that growth pipeline in 2021 and early in 2022. Fourth, our company has a sound financial foundation.

Our balance sheet is strong, and we have ample liquidity to pursue our growth. Finally, our people. Our people are our greatest asset, and I want to thank all our employees and contractors for the work that they have done to deliver our results this quarter. TransAlta has had an exciting time in its evolution, and we're well positioned for the future as a leader in low-cost, reliable and clean electricity generation focused on serving and meeting the needs of our customers. Thank you.

I'll turn the call back over to Chiara.

Chiara Valentini: Thank you, John. Sylvie, would you please open the call for questions from the analysts and media community.

Operator: And your first question will be from Dariusz Lozny at Bank of America.

Dariusz Lozny: My first one, maybe just kind of on capital allocation.

It seems like you guys have quite a bit of cash on hand and liquidity available relative to the projects in the pipeline, and that's before your fairly robust free cash flow guidance for the year. Maybe in the context of the buyback that you guys did a little bit on in Q1 or other options, how are you guys thinking about deploying the balance sheet a little bit here?

Todd Stack: Look, I would say that we continue to be opportunistic on share buybacks. We were blacked out during our Q4 release and our annual results last year and did purchase once we were out of that buyback period and really opportunistic. I mean when we saw the share price, it fell off after – during Q1, and we saw this as a great opportunity to pick up shares.

John Kousinioris: Yes.

And I would say, Todd, too, we do have -- I mean, I think our total spend in terms of projects under construction is sort of in that mid- $1.5 billion range when you put sort of the capital commitments we're expecting from both companies, both TransAlta and TransAlta Renewables. So I think we're comfortable with the way we're looking at our capital allocation and kind of falls within the ranges that we've said we tend to target.

Dariusz Lozny: Okay. Great. And maybe switching gears.

So congrats on locking up the industrial Sarnia customers for a few more years. Can I take away from the update in the MD&A on the ISO’s process that you guys will have visibility into whether or not that contract is extended by the second half of ‘22. It sounds like that’s sort of where their process might give you guys some clarity. But will you be able to update the market at that point?

John Kousinioris: That's actually what our expectation is, Darius. The ISO there has come out and is basically running an RFP for kind of a medium-term sort of capacity to be awarded for the province.

I think that goes from 2026 to 2031, that kind of time period. We have actually applied and are seeking a contract under that capacity procurement that they're doing. We are pretty confident of our ability to being successful in that. And right now, the current time schedule for the ISO to kind of go through all of the proponents for capacity contract would see them coming back to people in Q3. So I think you've got it exactly right.

Dariusz Lozny: Okay. Great. If I could sneak in one more quick one. Just on your higher expected forecast for Alberta pricing for the – for the full year. Is that just a factor of Q1 coming in higher than expected? Or is there something that you’re updating in your forecast for the balance of ‘22 here?

John Kousinioris: Yes.

I think what we've seen is actually the forward curve and I think market expectations in terms of where pricing is going to be in the jurisdiction increasing pretty significantly, I would say, over the course of the last month or so. I think kind of balance of year pricing in Alberta is now in that $113 range. I think May -- and we're already in May, would be in the upper 90s. I think June is a bit over $100. And then a bit over 120 and then Q4, about $114.

So in general, I think what we're seeing is the market kind of just reacting to the increase in gas prices and just making sure -- it's just reflective of the fact that variable costs for a lot of the generators have popped up.

Dariusz Lozny: Okay. Great. Thank you very much. I’ll turn it back here.

Operator: Next question will be from Rob Hope at Scotiabank.

Rob Hope: Want to follow up on the outlook for guidance relative to power pricing. Can you maybe walk us through some of the puts and takes that you're seeing just in terms of your guidance. You highlight potential upside on the energy pricing, and you do have gas locked in there as well or a good portion of it. So I would imagine that should be a tailwind as we go through the rest of the year.

So are there any other headwinds that you're seeing? Or directionally, are you looking better than you expected when you -- when you put out guidance.

John Kousinioris: Yes. When we looked at the first quarter -- by the way, when we looked at the first quarter, we had a bunch of sort of onetime events that impacted the quarter as well a little bit. So there was a provision that actually went through our numbers in Q1 that we don't expect to have any issues within the balance of the year. And candidly, Q1 also reflected some of the costs from just the leadership change that occurred in 2021.

And those are not things that we would expect to impact the company on a go-forward basis. I think you've got it right. I think we're pretty comfortable in terms of our gas position. We've seen the market pricing reflect. I think there was a bit of what I referred to as heat rate compression kind of in the first quarter, and we're seeing that improve a little bit in Q2, Q3, Q4.

We're very happy with where our trade floor is candidly progressing. -- pretty strong April, I would say, Todd, and we're pretty pleased with where they're sitting. So net-net, we feel pretty good about the guidance in terms of where we are. We're also expecting better performance from Centralia, certainly in Q2, Q3, balance of the year. Q1 was pretty anemic.

I think the pricing we saw in the Pac Northwest was weak, I would say. And yet our coal delivery costs were which we've basically locked in for the balance of the life of that facility, trended a little bit higher, but we're seeing strong pricing there and continued strong pricing for the balance of the year. So overall, certainly more, I would say, tailwinds and headwinds. That's for sure. Todd, I don't know if you want to add anything to that?

Todd Stack: I was going to highlight Centralia, the Energy Transition segment, we do expect it to decline year-over-year of the retirements of some of the units in there.

Centralia was, I would say, off the market in Q1.

John Kousinioris: The other thing I would say, Rob, is we are expecting to turn on the revenue tap, I would say, from Kent Hills as we begin the rehabilitation. It is our expectation that we'll actually see that rehabilitation work pretty quickly would be our plan and begin getting that in a place where we want it to be.

Rob Hope: All right. And just as a follow-up, like, conceptually, TransAlta has been relatively heavy on the wind development side versus solar, which is a benefit right now just given where you’re seeing supply chain.

As you move forward, does this cause you to double down on wind and potentially push off some of the solar development just seeing the increased challenges we’re seeing on the solar side versus wind?

John Kousinioris: Yes. I mean, I think -- look, we take a long-term view in terms of kind of what the mix of technology will be. I think right now, I think you've got it exactly right in terms of the wind versus the solar. And frankly, we have a lot more experience in wind development at solar, solar is something that is relatively new to us. I mean our Northern Goldfields project was really the first TransAlta built solar project that we have.

So we continue to see a lot of opportunities on the wind side. And when you look at our development pipeline, it's for sure, weighted more to win than it is solar. But we're just mindful of solar because we see it as a pretty disruptive technology going forward and something for us to keep an ore in the water on for sure.

Operator: And the next question will be from Mark Jarvi at CIBC.

Mark Jarvi: Just coming back to the outlook for the balance of the year and you talked about the gas hedges and the rising power prices.

If you look at your core and gas conversion assets, do you think spark spreads will expand through the balance of this year or trying to hold those flat given the current dynamics?

John Kousinioris: Yes, it's a great question. Our expectation is that they'll improve a bit, I think, certainly improve over what we saw in the first quarter, I would say. I mean, our team looks at it regularly. I mean, gas prices are certainly, I would say, higher than we anticipated that they would be to as we went into the year. And as we were looking at the hedge position overall for the portfolio for the year, but we are expecting to see a little bit of an expansion.

Mark Jarvi: Okay. And then any hedges, material hedges beyond 2023? You guys gave nice disclosure for this year and some for next year, but anything about longer term on the gas side?

John Kousinioris: Yes. I would say, Todd, I'm just going from memory, I think the longest term that you would typically see our hedges would be sort of 3 years is what I would say, typically, and they tend to roll over. And I think I would say kind of a weighted average kind of age, I'd say, of the hedges would be probably 1.5 years kind of in that range.

Mark Jarvi: On the power – on the power side, -- that’s right.

John Kousinioris: Sorry, on the gas side, just in terms of gas supply, yes, it's very much 2022 in terms of the position that we're in, and we like where we are in terms of the first 1/3 of the year for 2023.

Mark Jarvi: Okay. And then just a couple of in the quarterly filing around the Hydro segment. I think you just comment I mean, a little lower, a bit more competition, also some higher O&M Canaletto that kind of persists in terms of the O&M and the competition. Can you give some color around what happened on the ancillary side things.

John Kousinioris: Sure. Todd, do you want to I mean we can both take...

Todd Stack: Why don’t you go ahead. I’ll just take the M&A discussion, Mark. Really, I think it’s noted in there that insurance costs were really probably one of the main drivers, probably accounting for 1/3 of the increase, if not more, of the cost.

And that is a trend that you will see for the balance of the year. Really, it is our most valuable asset. It is one of the highest coverages in our insurance policies. And so it just bears the brunt of what I’ll say is rising costs associated with insurance that we’re seeing across the industry. And John, I don’t know if you want to talk about ancillary or…

John Kousinioris: Yes.

No, I think we should talk about ancillary services. We did see a bit more competition on the AS side, but I don't think that, that was really the major issue. When we talk to our team, I mean, I think our AS prices in Q1 of of 2021, we're roughly in that $67 range. And I think for this quarter, they were in the mid-40% range, I think, Mark. And so that's a pretty big difference year-over-year.

Our -- the judgment of our sort of optimization team would have been more around the fact that there was just a lot more volatility last year. So the path to the -- we often talk about average prices, but the path to how you got there is actually more important than many times what the average price was and just the volatility that we saw, particularly in February last year would have been the difference really year-over-year in terms of how the portfolio performed and the pricing that it got. And in fact, I'm just going from memory, I think volumetrically, we were actually ahead year-over-year both on the energy and on the AS side for the hydro portfolio. So not worried about our market share per se right now. It's just -- it was just reflective of kind of the pricing dynamics that we saw in in the province in the first quarter, I would say, more than anything.

Operator: Next question will be from Ben Sam at BMO.

Ben Sam: You announced the Garden Plains, the additional contract and Amazon is Contorion. I'm wondering, for you to succeed there are more -- and any other renewable power company, at what are these corporate PPAs looking for what that evolve? Like what gives you or anyone else has a competitive advantage to take more counterparties on the contracting side?

John Kousinioris: Yes. I mean great question. Look, when we look at -- and look, I can only speak to what we're doing and kind of the experience that we have in the marketplace.

I think one of the key differentiators for us is -- and look, this is just based on feedback that we're getting from the customers that we work with is really, I would say, 3 things. One, they really like, I think, the high, high customer service approach that we end up taking with the customers. That's something we've been working very deliberately fun. We actually have training programs and the like within the organization to try to get into kind of a high touch, highly responsive kind of ethos around dealing with customers as we go forward. So I would say that would be one.

Two, for a number of the customers that we deal with, the fact that we have kind of broad generation expertise and actually optimization and trading expertise, they're just like having discussions. And sometimes we get involved in kind of helping them think through and plan how they are on their own decarbonization journey. And candidly, the journey that we've been on, I think, is notable and something that many kind of referred to and sort of want to have a discussion as it relates to us. So I would say that would be the second thing. The third thing is a lot of them aren't sure that they're going to actually get the projects that they've bargained for.

There's been more than one instance pretty much in all the markets that we're in, where people thought they were getting something and it just wasn't delivered by a developer at the end of the day. They know when they come to us, we'll get the project done. And we'll get it done on time, and they'll get what they bargain for. So hopefully, that gives you a bit of a sense. Look, -- we have a lot of experience in operating wind.

We have a very strong supply chain team, really good relationships with the OEMs. Those are also things that we end up leveraging. But I just wanted to give you a sense of just some of the more qualitative factors that people are looking at that we're looking to differentiate ourselves on.

Ben Sam: That’s very helpful. And then I want to ask also, what are your thoughts around offshore wind in the U.S., you have ever source looking to monetize and then there’s some additional leases, I think, that are going to be opened up.

I mean is there any interest that you even considered looking at that technology?

John Kousinioris: Yes. Ben, over the years, we've had opportunities and obviously, when opportunities come to the table or they're brought to the attention of the company and our M&A team looks at them. We're not actively pursuing anything right now. Opportunistically, if something came up, we would potentially look at it. But it's not kind of a core competency that we have.

I mean it's a pretty different game to develop and service that kind of a facility versus what we're used to our bread and buttery in terms of onshore wind. So it would be a pretty unique, I think it would have to be a pretty unique circumstance that would require us partnering with somebody to get it done. But it's not -- going to put it. It's not top of mind in terms of what we're focusing on from development.

Operator: Next question will be from John Mould at TD.

John Mould: I like to start with a question on cogen. I guess maybe firstly, are you seeing any appetite for on-site cogen right now? And have you got appetite to allocate capital to new cogen development in Canada or the U.S., given your focus on renewables. And then maybe how are you thinking about cogen over the long term in Canada, just given our decarbonization targets and maybe uncertainty about how it's going to be treated under the clean energy standard more broadly.

John Kousinioris: Yes. John, I think you've kind of foreshadowed kind of the response, I think, through your comment at the end.

But what I would say is Look, it's -- when we looked back probably 2 or 3 years ago, I think we expected -- and in the context of kind of the regulatory environment of the day, we expect it probably to see more runway in fairness around cogeneration and had a team internally that was pursuing a bunch of that. We've seen that fall off candidly. And as you know, it isn't sort of one of the core areas that we're looking at from a growth perspective in terms of our clean electricity growth plan. Having said that, we are involved with discussions and we're pursuing some opportunities on effectively cogen developments. But interestingly, they're typically for existing customers in terms of meeting their needs and also certainly a greater amount of focus on them potentially being non-gas.

So for example, being hydrogen fueled as opposed to being natural gas in terms of the fuel source that's basically used for the facility. I think you hit the nail on the head on the regulatory environment. It still feels -- I mean, directionally, we think it's going to be increasingly challenging from a gas perspective, to be sure, but it's pretty opaque. And I think making those big kind of bets is challenging. And I think we see it as sort of risky unless it's in the context of serving a good customer, particularly existing customers that we have long-standing relationships with.

John Mould: Okay. Great. And then maybe I’ll just ask one more on development in Quebec specifically. You have a couple of operating sites there – and with 2.3 gigawatts of tenders coming and presumably more appetite there in the long term, are there any opportunities for you in terms of expanding those sites or local part with or without local partners and maybe some longer-term greenfield opportunities? How are you thinking about that market?

John Kousinioris: Yes, it's a great question. So we have done a little bit of work to see if we can maybe increase the size of some of the footprint that we have there because in some of the other jurisdictions, that is one of the things that we're looking at kind of to grow our pipeline.

I think it will be challenging. And as you've seen from sort of our disclosure on where our pipeline is, we don't have a lot of sites, well, we don't have any sites, frankly, other than our existing sites in Quebec. So for sure, there is an opportunity there for other folks to be able to bid into it. If an opportunity comes our way to joint venture with somebody, we wouldn't say no to considering something like that, but I don't really see us as being a key proponent in the RFPs that we're seeing coming into that jurisdiction right now.

John Mould: Okay.

Got it. I'll hop back in the queue.

Operator: Thank you. And at this time, we have no further questions. Please proceed with closing comments.

Chiara Valentini: 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 very much, and have a great day.

Operator: Thank you.

Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines. Have a good weekend.