TransAlta Corporation (NYSE:TAC) Q3 2023 Earnings Call Transcript

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Patrick Kenny: And then just around the, I guess, the carbon tax and playing the hypothetical there?

John Kousinioris: Look on the carbon tax, let’s say it would go down to zero. I don’t know that it would really impact the margin — and look, I’m speculating here, but I don’t know that it would impact the margins on our gas fleet all that much. I mean, I think candidly the carbon price is kind of priced in and is sort of an expense that we do and doesn’t really, I think, drive overly at the end of the day, the margin. It would, though, I think have an impact on the overall average price, which would probably have a corresponding downward impact on pricing in the province, which would in turn impact probably the renewables more in terms of what pricing they would be able to realize if that incremental variable cost that is currently priced into the market is sort of reduced or removed, if you see what I’m saying. I think, that’s probably more likely what you’d see, I guess, Patrick, if I could sort of forecast, which I’m never very good at doing.

Patrick Kenny: And then I guess just looking at the BB plus credit rating and the stable outlook. Todd, have you had any confirmation from S&P that given your increased presence in Alberta with Heartland that they won’t be moving any goalposts on you or placing your rating on negative outlook like they have with others just given their view of Western Canada having higher exposure to physical risks related to some extreme weather events?

Todd Stack: Patrick, I think, we absolutely did reach out to the rating agencies ahead of the Heartland transaction just to understand the implications, broadly received as neutral in the discussion. I do not expect them to be moving any goal posts, certainly not in a negative fashion against us going forward. I think we’ve had really, really strong results and we’ve proven to the rating agencies how resilient the company is. And so I think the discussions ongoing with the rating agencies are very solid and we’re very happy with the BB plus and then the BBB low with DBRS for our company.

John Kousinioris: Yes, I mean, I think our US agencies would consider us a very high quality BB plus, but I don’t think that’s changing here.

Operator: Thank you. There are no further questions at this time. Please proceed.

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

Operator: Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect.

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