TransAlta Reports Full Year and Fourth Quarter 2023 Results and Announces Enhanced Share Repurchase Program

CALGARY, AB, Feb. 23, 2024 /CNW/ – TransAlta Corporation (“TransAlta” or the “Company”) (TSX:TA) (NYSE:TAC) today reported its financial results for the fourth quarter and year ended Dec. 31, 2023, which highlight another year of exceptional performance led by strong financial, operational and safety results.

Full Year 2023 Financial Highlights

Key financial guidance and targets increased twice during 2023
Adjusted EBITDA(1) of $1,632 million, compared to $1,634 million from the same period in 2022
Free Cash Flow (“FCF”)(1) of $890 million, or $3.22 per share, compared to $3.55 per share from the same period in 2022
Cash flow from operating activities of $1,464 million, an increase of $587 million from the same period in 2022
Earnings before income taxes of $880 million, an improvement of $527 million from the same period in 2022
Net earnings attributable to common shareholders of $644 million, an increase of $640 million from the same period in 2022
Announced a 9 per cent increase to the common share dividend, representing the fifth consecutive annual dividend increase
Returned $87 million of capital to common shareholders during the year through the buyback of 7.5 million common shares

Fourth Quarter 2023 Financial Highlights

Adjusted EBITDA of $289 million, compared to $541 million for the same period in 2022
FCF of $121 million, or $0.39 per share, compared to $315 million or $1.17 per share for the same period in 2022
Cash flow from operating activities of $310 million, compared to $351 for the same period in 2022
Net loss before income taxes of $35 million, a decrease of $42 million for the same period in 2022
Net loss attributable to common shareholders of $84 million, an increase of $79 million from the same period in 2022

Other Business Highlights and Updates

Announced an enhanced common share repurchase program for 2024 of up to $150 million towards the repurchase of common shares, representing up to 40 per cent of 2024 FCF guidance being returned to shareholders in the form of share repurchases and dividends
Achieved strong safety performance in 2023, including a record annual Total Recordable Injury Frequency of 0.30
Strong operational adjusted availability of 88.8%
Maintained emissions intensity at 0.41 tCO2e/MWh from 2022 levels
Entered into 10-year transfer agreements with an AA- rated customer for the sale of approximately 80 per cent of the expected production tax credits to be generated from the White Rock and Horizon Hill wind facilities
Completed the Kent Hills rehabilitation program in the first quarter of 2024. All 50 turbines have returned to commercial operation
Energization activities are underway at the Horizon Hill and White Rock wind facilities with commercial operations expected to be achieved in the first quarter of 2024
Completion of the Mount Keith 132kV expansion project is expected to be achieved in March 2024. The expansion of the transmission system in Western Australia supports the Northern Goldfields-based operations of BHP Nickel West (“BHP”)
Achieved commercial operation of the 48 MW Northern Goldfields solar and battery storage project in November 2023. The facilities are fully contracted with BHP for a term of 15 years and are expected to reduce BHP’s emissions by 12 per cent at their Mt. Keith and Leinster operations
Announced updated strategic growth targets to 2028, including adding up to 1.75 GW of new capacity to the Company’s fleet by investing approximately $3.5 billion to develop, construct or acquire new assets through to the end of 2028 to deliver annual EBITDA of approximately $350 million
Entered into a joint development agreement with Hancock Prospecting Pty Ltd. (“Hancock”) to define, develop and operate clean energy solutions
Entered into a definitive share purchase agreement to acquire Heartland Generation and its entire business operations in Alberta and British Columbia for approximately $658 million, subject to closing adjustment
Completed the acquisition of TransAlta Renewables Inc. (“TransAlta Renewables”) for total consideration paid of $1.3 billion, which consisted of $800 million of cash and approximately 46 million common shares
Acquired a 50 per cent interest in the Tent Mountain 320 MW pumped hydro development project

“2023 was another year of exceptional performance for our Company led by record financial and safety results. During the year, we generated strong free cash flow of $3.22 per share, driven by record revenues across our generating fleet. Our dynamic asset optimization and hedging strategies continue to perform well in managing the evolving markets of our operating portfolio, illustrating the value of our growing fleet and the capabilities of our employees,” said Mr. John Kousinioris, President and Chief Executive Officer of TransAlta.

“During the year, we deployed $87 million towards share repurchases which, together with our common share dividends, resulted in the return of $145 million or $0.53 per share in value to shareholders,” added Mr. Kousinioris.

“We are focused on making balanced capital allocation decisions that enhance value for our shareholders and will remain disciplined in executing our ambitious Clean Electricity Growth Plan with a focus on securing appropriate risk-adjusted returns. We will not grow simply for the sake of growth and to meet targets. Given the current market price of our common shares, which we consider to be undervalued, we will look to enhance returns and shareholder value through our dividend and share repurchases in 2024 of up to $150 million.”

“Our generating portfolio continues to perform well and is expected to generate between $1.47 and $1.96 per share of free cash flow in 2024. Our enhanced common share repurchase program and expected dividend payments in 2024 represent up to 40% of our free cash flow guidance to our shareholders.”

“Turning to growth, our Mount Keith transmission expansion, along with our Horizon Hill and White Rock wind facilities, are well into commissioning and we expect all projects to be completed in March 2024. This milestone, coupled with the completion of our Garden Plain wind facility and Northern Goldfields solar and battery storage project, as well as the rehabilitation of Kent Hills, will contribute contracted adjusted EBITDA of approximately $175 million annually. I am also pleased we’ve been able to secure 10-year transfer agreements with an AA- rated customer for the sale of approximately 80 per cent of production tax credits from the White Rock and Horizon Hill wind facilities, providing another stream of contracted revenue from these assets.”

“Strong free cash flow will, over time, continue to fund our transition to a higher proportion of contracted renewables and toward the path of higher share price valuation. As I look forward, there is every reason to believe that our success will continue in 2024 and beyond.”

Change to Board of Directors

The Honourable Rona Ambrose has decided that she will not stand for re-election and will retire from the Board of Directors (“the Board”) following the annual shareholder meeting on April 25, 2024. The Board extends its gratitude for her service to the Company. She has been a valuable contributor to the Board since 2017 and we thank her for her leadership and insights during her tenure, especially as Chair of the Governance, Safety and Sustainability Committee of the Board.

Production Tax Credit (“PTC”) Sale Agreements

On Feb. 22, 2024, the Company entered into 10-year transfer agreements with an AA-rated customer for the sale of approximately 80 per cent of the expected PTCs to be generated from the White Rock and Horizon Hill wind projects. The expected annual average EBITDA from these contracts is approximately $57 million (US$43 million).

Normal Course Issuer Bid and Automatic Share Purchase Plan

On Dec. 19, 2023, the Company entered into an Automatic Share Purchase Plan (“ASPP”) in order to facilitate repurchases of TransAlta’s common shares under its Normal Course Issuer Bid (“NCIB”). Under the ASPP, the Company’s broker may purchase common shares from the effective date of the ASPP until the end of the ASPP. All purchases of common shares made under the ASPP will be included in determining the number of common shares purchased under the NCIB. The ASPP will terminate on the earliest of the date on which: (a) the maximum purchase limits under the ASPP are reached; (b) Feb. 24, 2024; or (c) the Company terminates the ASPP in accordance with its terms.

During the year ended Dec. 31, 2023, the Company purchased and cancelled a total of 7,537,500 common shares, at an average price of $11.49 per common share, for a total cost of $87 million.

The NCIB provides the Company with a capital allocation alternative with a view to ensuring long-term shareholder value. The Board and management believe that, from time to time, the market price of the common shares might not be reflective of the underlying value and purchases of common shares for cancellation under the NCIB may provide an opportunity to enhance shareholder value.

Northern Goldfields Solar Achieves Commercial Operation

On Nov. 22, 2023, the Company announced that the 48 MW Northern Goldfields solar and battery storage facilities achieved commercial operation. The facilities consist of the 27 MW Mount Keith solar facility, the 11 MW Leinster solar facility, the 10 MW Leinster battery energy storage system and interconnecting transmission infrastructure, all of which are now integrated into TransAlta’s existing 169 MW Southern Cross Energy North remote network in Western Australia. The facilities are fully contracted to BHP for a term of 15 years and are expected to reduce BHP’s scope 2 emissions at Mount Keith and Leinster by 12 per cent annually.

TransAlta Announces Growth Targets to 2028

On Nov. 21, 2023, the Company held its 2023 Investor Day event and announced it had updated its strategic growth targets to 2028, which strengthens the Company’s commitment to being a leader in clean electricity by delivering customer-centred power solutions. The growth targets include: adding up to 1.75 GW of new capacity to the Company’s fleet by investing approximately $3.5 billion to develop, construct or acquire new assets through to the end of 2028, with a focus on customer-centred renewables and storage through the advancement of its 4.8 GW development pipeline, and expanding this development pipeline to 10 GW by 2028.

TransAlta Declares 9 Per Cent Dividend Increase

On Nov. 21, 2023, the Board approved an annualized $0.02 per share increase, or 9 per cent increase to our common share dividend and declared a dividend of $0.06 per common share to be paid on April 1, 2024. The quarterly dividend of $0.06 per common share represents an annualized dividend of $0.24 per common share.

TransAlta Enters Joint Development Agreement with Hancock

On Nov. 21, 2023, the Company entered into a joint development agreement with Hancock, Australia’s fourth largest iron ore producer. This arrangement will build on TransAlta’s expertise in supplying power to remote mining operations in Western Australia. TransAlta will work collaboratively with Hancock to define and supply behind-the-fence generation solutions for Hancock in the Port Hedland area.

TransAlta to Acquire Heartland Generation from Energy Capital Partners

On Nov. 2, 2023, the Company announced that it had entered into a definitive share purchase agreement with an affiliate of Energy Capital Partners, the parent of Heartland Generation Ltd. and Alberta Power (2000) Ltd. (collectively, “Heartland”), pursuant to which TransAlta will acquire Heartland and its entire business operations in Alberta and British Columbia. The acquisition will add 10 facilities to TransAlta’s fleet, totalling 1,844 MW of new capacity. The transaction is expected to close in the first half of 2024, subject to customary closing conditions, including receipt of regulatory approvals.

The purchase price for the acquisition is $390 million, subject to working capital and other adjustments, as well as the assumption of $268 million of low-cost debt. The Company will finance the transaction using cash on hand and drawing on its credit facilities.

The assets are expected to add approximately $115 million of average annual EBITDA including synergies.  Approximately 55 per cent of revenues are under contract with highly creditworthy counterparties, with a weighted-average remaining contract life of 16 years. Corporate pre-tax synergies are expected to exceed $20 million annually.

TransAlta Completes Acquisition of TransAlta Renewables to Simplify Structure and Enhance Strategic Position

On Oct. 5, 2023, the Company completed the acquisition of TransAlta Renewables pursuant to the terms of the previously announced arrangement agreement between the parties (the “Arrangement”). TransAlta acquired all of the outstanding common shares of TransAlta Renewables (“RNW Shares”) not already owned, directly or indirectly, by TransAlta and certain of its affiliates, resulting in TransAlta Renewables becoming a wholly owned subsidiary of the Company. Prior to the Arrangement, TransAlta and its affiliates collectively held 160,398,217 RNW Shares, representing 60.1 per cent of the issued and outstanding RNW Shares, with the remaining 106,510,884 RNW Shares held by TransAlta Renewables shareholders (“RNW Shareholders”) other than TransAlta and its affiliates.

The Arrangement was approved by RNW Shareholders at a special meeting of shareholders held on Sept. 26, 2023, and by the Court of King’s Bench of Alberta on Oct. 4, 2023. The consideration paid totalled $1.3 billion, which consisted of $800 million of cash and approximately 46 million common shares of the Company.

TransAlta Tops Newsweek’s Inaugural List of World’s Most Trustworthy Companies

On Sept. 14, 2023, the Company announced that it ranked first on Newsweek’s inaugural “World’s Most Trustworthy Companies 2023” list for the Energy and Utilities category. The list identifies the top 1,000 companies in 21 countries and across 23 industries. Newsweek’s 2023 World’s Most Trustworthy Companies were chosen based on a holistic approach to evaluating three pillars of public trust – customers, investors and employees. The list was compiled based on an extensive survey of over 70,000 participants, gathering 269,000 evaluations of companies that people trust as a customer, as an investor or as an employee.

Garden Plain Wind Facility Achieved Commercial Operation

In August 2023, the Garden Plain wind facility was commissioned adding 130 MW to our gross installed capacity. The facility is fully contracted with Pembina Pipeline Corporation and PepsiCo Canada, with a weighted average contract life of approximately 17 years.

Tent Mountain Pumped Hydro Development Project

On April 24, 2023, the Company acquired a 50 per cent interest in the Tent Mountain Renewable Energy Complex (“Tent Mountain”), an early-stage 320 MW pumped storage hydro development project located in southwest Alberta, from Evolve Power Ltd. (“Evolve”), formerly known as Montem Resources Limited. The acquisition includes land rights, fixed assets and intellectual property associated with Tent Mountain.

The Company and Evolve own the Tent Mountain project within a special purpose partnership that is jointly managed, with the Company acting as project developer. The partnership is actively seeking an offtake agreement for the energy and environmental attributes that will be generated by the facility.

For the year ended Dec. 31, 2023, the Company demonstrated strong performance mainly due to the continued strong market conditions in Alberta in the first half of the year, higher production in the Gas and Energy Transition segments, and higher hedged volumes and lower realized gas prices in the Gas segment, partially offset by lower wind and water resources. The Energy Marketing segment’s performance was lower compared to 2022 due to the lower realized settled trades during the year on market positions compared to the prior year.

Total production for the year ended Dec. 31, 2023, was 22,029 GWh compared to 21,258 GWh for the same period in 2022, an increase of 771 GWh or 4 per cent, primarily due to:

Production from the Centralia facility within the Energy Transition segment experienced fewer planned and unplanned outage hours compared to the prior year and was able to dispatch during periods of higher merchant pricing for the region;
Strong production in the Gas segment that was both higher than the prior year as well as higher than expectations for the year. The Gas segment was available during periods of supply tightness, allowing our facilities to operate during periods of peak pricing; partially offset by
The Gas segment being unfavourably impacted by relatively mild weather in the fourth quarter of 2023, due to warmer than average weather conditions compared to the same period in 2022 which had tighter supply due to the extreme cold weather in Alberta.

Production for the renewables fleet for the year ended Dec. 31, 2023, was 6,012 GWh compared to 6,236 GWh for the same period in 2022, a decrease of 224 GWh or 4 per cent, primarily due to:

Lower than average renewable resources in the year that impacted production in both the Hydro and the Wind and Solar segments;
Hydro production was further impacted by lower availability due to increased planned maintenance outages compared to 2022; partially offset by
The addition of the Garden Plain wind facility, the partial return to service of the Kent Hills wind facility, and the addition of the Northern Goldfields solar and battery storage facilities during the year.

Adjusted availability for the year ended Dec. 31, 2023, was 88.8 per cent, compared to 90.0 per cent in 2022, a decrease of 1.2 percentage points, primarily due to:

Planned outages in the Hydro segment, mainly at our Alberta Hydro Assets; and
Planned outages at Sundance Unit 6, Sheerness Unit 1, Keephills Units 2 and 3 and Sarnia in the Gas segment; partially offset by
Lower planned outages at Centralia Unit 2 in the Energy Transition segment; and
The partial return to service of the Kent Hills wind facilities.

Adjusted EBITDA for the year ended Dec. 31, 2023, was $1,632 million compared to $1,634 million in 2022, a decrease of $2 million, or 0.1 per cent. The major factors impacting adjusted EBITDA are summarized below:

Hydro adjusted EBITDA decreased by $68 million, or 13 per cent, compared to the same period in 2022, primarily due to lower ancillary services volumes, lower spot power and ancillary services prices and lower than average water resources, partially offset by realized gains from hedging and sales of environmental attributes;
Wind and Solar adjusted EBITDA decreased by $54 million, or 17 per cent, compared to 2022 primarily due to lower environmental attribute revenues from lower offset and credit sales, lower spot power pricing in Alberta, lower wind resource across the operating fleets, and lower liquidated damages recognized at the Windrise wind facility, partially offset by the commercial operation of the Garden Plain wind facility, the Northern Goldfields solar facilities and the partial return to service of the Kent Hills wind facilities;
Gas adjusted EBITDA increased by $172 million, or 27 per cent, compared to 2022, primarily due to higher power prices from hedges partially offsetting the impacts of lower Alberta spot prices, lower natural gas commodity costs and higher production, partially offset by lower thermal revenues, higher carbon prices and higher carbon costs and fuel usage related to production;
Energy Transition adjusted EBITDA increased by $36 million, or 42 per cent, compared to 2022, primarily due to higher production from higher availability and higher merchant sales volumes, partially offset by lower market prices compared to the prior year;
Energy Marketing adjusted EBITDA decreased by $74 million, or 40 per cent, compared to 2022 primarily due to lower realized settled trades during the year on market positions in comparison to prior year and higher OM&A. Energy Marketing results were in line with management’s expectations and performance was consistent with our revised full year financial guidance provided in the second quarter of 2023; and
Corporate adjusted EBITDA decreased by $14 million, or 14% per cent, compared to 2022, primarily due to increased spending to support strategic and growth initiatives and higher costs associated with the relocation of the Company’s head office.

Cash flow from operating activities totalled $1,464 million for the year ended Dec. 31, 2023, compared to $877 million in the same period in 2022, an increase of $587 million, or 67 per cent, primarily due to:

Higher gross margin on lower natural gas costs included in fuel and purchased power, partially offset by lower revenues net of unrealized gains and losses from risk management activities and higher carbon compliance costs;
Higher OM&A from increased spending on strategic and growth initiatives, higher costs associated with the relocation of the Company’s head office, and increased costs due to inflationary pressures;
Lower current income tax expense as previously restricted non-capital loss carryforwards were utilized to offset taxable income;
Higher interest income on higher cash balances and favourable interest rates; and
Favourable change in non-cash operating working capital balances with lower accounts receivable and collateral provided as a result of declining volatility in the market and market prices, partially offset by lower accounts payable and collateral received related to derivative instruments.

Free Cash Flow totalled $890 million for the year ended Dec. 31, 2023, compared to $961 million for the same period in 2022, a decrease of $71 million, or 7 per cent, primarily driven by:

Higher distributions paid to subsidiaries’ non-controlling interests as related to timing of distributions paid to TransAlta Cogeneration LP (“TA Cogen”), partially offset by lower distributions paid to TransAlta Renewables;
Higher sustaining capital expenditures due to higher planned major maintenance costs for the Hydro and Gas segments, which were partially offset by lower planned major maintenance in Wind and Solar and Energy Transition segments;
Lower provisions being accrued compared to the prior year without settlement;
Adjusted EBITDA items noted above, partially offset by
Higher cash balances and favourable interest rates increasing interest income; and
Lower current income tax expense as previously restricted non-capital loss carryforwards were utilized to offset taxable income.

Earnings before income taxes totalled $880 million for the year ended Dec. 31, 2023, compared to $353 million in the same period in 2022, an increase of $527 million, or 149 per cent.

Net earnings attributable to common shareholders totalled $644 million for the year ended Dec. 31, 2023, compared to $4 million in the same period in 2022, an increase of $640 million, primarily due to:

Adjusted EBITDA items discussed above;
Unrealized mark-to-market losses in 2022;
Lower income tax expense due to a recovery relating to the reversal of previously derecognized Canadian deferred tax assets and lower US non-deductible expenses relating to the US operations, partially offset by higher earnings from Canadian operations;
Higher asset impairment reversals due to decommissioning and restoration provisions for retired assets being favourably impacted by a change in timing of expected cash outflows partially offset by lower discount rates;
Increased interest income due to higher cash balances and favourable interest rates; and
Higher depreciation and amortization due to revisions to useful lives on certain facilities and commercial operation of new facilities.

During the fourth quarter of 2023, weather impacts were relatively mild compared to the prior period and the fourth quarter of 2022, which had extreme cold weather in Alberta, resulting in periods of exceptional peak pricing in 2022.

Production for the three months ended Dec. 31, 2023, was 5,783 GWh compared to 6,005 GWh for the same period in 2022. The decrease of 222 GWh, or 4 per cent was primarily due to:

Lower dispatch of the Alberta Gas assets due to warmer temperatures;
Lower availability, partially offset by
Higher production in the Wind and Solar segment with the addition of the Garden Plain wind facility.

Adjusted availability for the three months ended Dec. 31, 2023, was 86.9 per cent compared to 89.5 per cent for the same period in 2022, a decrease of 2.6 percentage points primarily due to:

Planned outages in the Gas segment and Hydro segment, partially offset by
Higher availability for the Wind and Solar segment, mainly due to the partial return to service of the Kent Hills wind facilities; and
Lower unplanned outages in the Energy Transition segment.

Adjusted EBITDA for the three months ended Dec. 31, 2023, was $289 million compared to $541 million in the same period of 2022, a decrease of $252 million, or 47 per cent. The major factors impacting adjusted EBITDA are summarized below:

Hydro adjusted EBITDA decreased by $77 million or 58 per cent, due to decreased revenues from lower merchant and ancillary prices in the Alberta market and lower ancillary services volumes;
Wind and Solar adjusted EBITDA decreased by $10 million or 11 per cent, due to lower merchant pricing in Alberta, lower wind resource in Eastern Canada and the US and higher OM&A due to new long-term service agreements, partially offset by higher revenues related to the partial return to service of the Kent Hills facilities and the addition of the Garden Plain wind facility and Northern Goldfields solar and battery storage facilities;
Gas adjusted EBITDA decreased by $123 million or 47 per cent, due to lower realized prices and production volume in the Alberta market, lower thermal revenues due to lower steam revenue pricing at the Sarnia facility compared to 2022, and higher OM&A with the inventory write-down at the Sundance and Keephills 2 facilities;
Energy Transition adjusted EBITDA increased by $7 million or 37 per cent compared to 2022, primarily due to higher production that was due to lower unplanned outages, partially offset by lower revenues as a result of lower market prices;
Energy Marketing adjusted EBITDA decreased by $49 million or 78 per cent compared to 2022, primarily due to lower realized settled trades during the fourth quarter on market positions in comparison to prior period; and
Corporate adjusted EBITDA was consistent with the same period in 2022.

FCF totalled $121 million for the three months ended Dec. 31, 2023, compared to $315 million in the same period in 2022, a decrease of $194 million, or 62 per cent primarily due to:

Lower adjusted EBITDA items noted above, partially offset by
Lower distributions paid to subsidiaries’ non-controlling interests on lower net earnings in TA Cogen and no dividends paid to TransAlta Renewables shareholders.

Loss before income taxes for the three months ended Dec. 31, 2023, was $35 million compared to net earnings of $7 million in the same period of 2022, a decrease of $42 million.

Net loss attributable to common shareholders for the three months ended Dec. 31, 2023, was $84 million compared to a net loss of $163 million in the same period of 2022, an improvement of $79 million, or 48 per cent primarily due to:

Adjusted EBITDA items discussed above;
Lower income tax expense due to lower earnings before tax in 2023 and the reduction of non-deductible expenses in the US;
Lower depreciation and amortization from the revision of useful lives on certain facilities, partially offset by commercial operation of new facilities; and
Gains on sale of assets decreased compared to the same period in 2022, due to certain sales of gas generation assets in 2022.

Alberta Electricity Portfolio

For the three months and year ended Dec. 31, 2023, the Alberta electricity portfolio generated 2,988 GWh and 11,759 GWh, respectively, compared to 3,353 GWh and 11,476 GWh of energy for 2022, respectively. The annual production increase of 283 GWh, or 2 per cent, was primarily due to:

The commercial operation of the Garden Plain wind facility in the third quarter of 2023;
Hedged production with higher power prices for the year ended Dec. 31, 2023, compared to 2022, primarily due to the opportunity to secure additional margins with strategic hedges for the hydro assets;
Higher production from our Gas assets due to strong market conditions in the first half of 2023, partially offset by lower water resources in the Alberta Hydro assets.

Gross margin for the three months and year ended Dec. 31, 2023, was $215 million and $1,248 million, respectively, a decrease of $206 million and an increase of $71 million, respectively, compared to the same periods in 2022. The annual increase was primarily due to:

Higher power price hedges, partially offsetting the impacts of lower Alberta spot prices and lower natural gas prices compared to 2022; partially offset by
Lower ancillary services revenues due to the Alberta Electric System Operator procuring lower volumes given its decision to reduce the cumulative volume of imports into Alberta.

Alberta power prices for 2023 were lower compared to 2022, as 2022 experienced exceptional pricing. The average spot power price per MWh for the three months and year ended Dec. 31, 2023, was $82 per MWh and $134 per MWh, respectively, compared to $214 per MWh and $162 per MWh in the same periods in 2022. This was primarily due to:

Moderate temperatures in the last six months of the year compared with the prior year;
Higher total renewable generation in the Alberta market from new wind and solar facilities and higher wind resources during the fourth quarter of 2023; and
Lower natural gas prices.

Hedged volumes for the three months and year ended Dec. 31, 2023, were 1,742 GWh and 7,550 GWh at an average price of $92 per MWh and $111 per MWh, respectively, compared to 1,907 GWh and 7,228 GWh at an average price of $106 per MWh and $86 per MWh, respectively, in 2022.

We expect to maintain adequate available liquidity under our committed credit facilities. As at Dec. 31, 2023, we had access to $1.7 billion in liquidity, including $345 million in cash, net of bank overdraft; which significantly exceeds the funds required for committed growth, sustaining capital and productivity projects. Cash amount of $800 million was used for the acquisition of TransAlta Renewables.

2024 Financial Guidance

The following table outlines our expectations on key financial targets and related assumptions for 2024 and should be read in conjunction with the narrative discussion that follows and the Governance and Risk Management section of the MD&A for additional information:

The Company’s outlook for 2024 may be impacted by a number of factors as detailed further below.

Alberta spot price sensitivity: a +/- $1 per MWh change in spot price is expected to have a +/-$5 million impact on adjusted EBITDA for 2024.

Other assumptions relevant to the 2024 outlook

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