Higher electricity prices power TransAlta's Q4 results

Fourth quarter 2005 highlights:

• Comparable earnings of $0.29 per share compared to $0.19 per share in 2004
• Reported net earnings of $0.35 per share compared to $0.32 per share last year
• Generated cash flow from operations of $211.9 million compared to $175.9 million in 2004
• Dividend declared of $0.25 per common share payable April 1, 2006

CALGARY, Alberta (Jan. 27, 2006) - TransAlta Corporation (TransAlta or the corporation) (TSX: TA; NYSE: TAC) today announced comparable earnings* for the fourth quarter 2005 of $58.2 million ($0.29 per share) versus $37.2 million ($0.19 per share) for the fourth quarter 2004. Reported net earnings were $70.2 million ($0.35 per share), compared to $62.1 million ($0.32 per share) for the fourth quarters of 2005 and 2004. Cash flow from operating activities for the quarter was $211.9 million, compared to $175.9 million for the fourth quarter of 2004.

"We realized higher earnings and cash flow by capturing opportunities created by the market while keeping the focus on achieving high availability and solid plant performance," said Steve Snyder, TransAlta president and CEO. "Both the Generation and Energy Marketing business segments performed well and we are pleased with both our fourth quarter and full year results."

For the twelve months ended Dec. 31, 2005, comparable earnings were $173.8 million ($0.88 per share) compared to $128.1 million ($0.66 per share) for the twelve months ended Dec. 31, 2004. For the year ended Dec. 31, 2005, reported net earnings were $198.8 million or $1.01 per share compared to $170.2 million or $0.88 per share the year prior. Cash flow from operating activities was $619.4 million for the twelve months ended Dec. 31, 2005 versus $591.2 million for the same period in 2004. Capital expenditures during 2005 were $325.5 million compared to $345.7 million for 2004. Net debt was also reduced by $262.9 million at Dec. 31, 2005.

In the fourth quarter of 2005, TransAlta:

• Announced its subsidiary TransAlta Energy Marketing (U.S.) Inc. signed a four-year, US$450 million agreement for the delivery of electricity from its coal-fired Centralia, Washington power plant.
• Appointed Brian Burden as executive vice-president and CFO
• Issued $200 million of two-year, 4.20 per cent senior unsecured notes
• Had its BBB credit rating outlook revised from Negative to Stable trend by Dominion Bond Rating Service

TransAlta today also declared a dividend of $0.25 per share on common shares payable April 1, 2006 to shareholders of record at the close of business March 1, 2006.

All financial figures are in Canadian dollars unless noted otherwise.

*Comparable earnings is not defined under Canadian generally accepted accounting principles (GAAP). Presenting earnings on a comparable basis from period to period provides management with the ability to evaluate earnings trends more readily in comparison with prior periods' results. An explanation of this Non-GAAP financial measure can be found on page 10 of this news release.

For more information:

Media Inquiries:

Sneh Seetal
Senior Advisor, Media Relations
Phone: (403) 267-7330
Email: sneh_seetal@transalta.com

Investor Inquiries:

Jennifer Pierce
Director, Investor Relations
Phone: (403) 267-7622
Fax: (403) 267-2590
Email: investor_relations@transalta.com