Talking About The Future With Albertans

A Message From Dawn Farrel

There has been a great deal of speculation about the future of TransAlta’s coal plants since the election of Alberta’s new provincial government. I think it’s important to our shareholders, to TransAlta’s employees and to Albertans to talk about what we know and what’s important to us, rather than second-guess what might happen.

I recently met some of the new NDP cabinet members and discussed their philosophy and their approach to public policy. I don’t know what policy positions will ultimately emerge in the months and years ahead, but I can honestly say that the encounters I’ve had with the new government have been positive.

The individuals I’ve met have no intention of hurting our economy. In fact, they stand for the interests of the average Albertan and for ensuring that decision-making is transparent, thoughtful and considered. Their concern is more about how best to have a dialogue in which the environment, jobs, the economy and electricity prices and reliability are all considered. And the dialogue they’re looking for isn’t just with corporate leaders – it’s with everyone in every walk of life.

Listening takes time, and we respect that. So while we feel a sense of urgency in the need to address the challenges currently facing the Alberta economy and to have a greater sense of confidence in the future, we also understand that it will take time to get the right answers.

For TransAlta’s part, we will focus on presenting facts, options and alternatives, so that well-informed decisions can be made as we move forward. We want to give good advice on the mechanisms that can be used to achieve provincial and national environmental objectives and to discuss important trade-offs, so that when final decisions are made, the economy remains strong and growing, people have certainty about their jobs and we have a healthy environment.

We believe all of that can be achieved. And we believe this can be accomplished without thousands of job losses, higher electricity bills or market volatility. These are real risks and trade-offs, supported by evidence and experience elsewhere, but we’re not going to take hardline positions. That’s not the basis of a good dialogue. That’s not what I’ve heard so far from our government.

It’s important that Albertans are aware that the transition away from coal-fired generation is already well underway. By 2030, more than half of the province’s coal fleet will have retired and been replaced with renewables or natural gas-fired generation. The remaining coal-fired generation will be required to meet stringent greenhouse gas (GHG), NOx and SO2 emission standards. By 2030, coal-fired generation will represent only 12 per cent of the generation supply mix.

It’s also important to consider the more than 1,300 jobs that directly support our plants every day, the 1,200 construction jobs involved in plant maintenance, jobs in machine shops and engineering firms, and similar service providers in Edmonton, Stony Plain and Spruce Grove. That doesn’t include the thousands of jobs supporting the people who work in these companies; from restaurants to housing to grocery stores to retailers.

TransAlta also has Canada’s largest fleet of wind generation and hydro generation in B.C. and Ontario. Sundance 7, our proposed major plant expansion, recently received Alberta Utilities Commission approval. There’s lots more work to be done assessing market demand and further approvals required. But I do know that it will be among the world’s most efficient gas-fired plants, generating enough electricity to power about 720,000 Alberta households and that it’s part of an affordable, reliable electricity system.

In Alberta, TransAlta’s coal plants today provide more than one-third of the province’s power and are an important part of the province’s economy. An economic impact study conducted in 2014 by the University of Calgary’s Dr. Robert Mansell found that the overall impact of TransAlta’s Alberta coal generation and mining facilities, from 2015 to 2020, will include about $2.4 billion in Alberta labour income, about 5,000 jobs a year; almost $5.4 billion in gross domestic product, and just under $1.4 billion in government revenue — including $678 million to the Government of Alberta.

This information will be included in our perspectives, but it’s only the beginning of the dialogue. We are also making the case for new technologies — different solutions, different approaches — that could lead to the achievement of common goals and much improved use of the resources we have now and the competitive advantages it provides. We will focus on what can be done during the coal transition period and how new technologies be can be funded.

It’s certain that we will not all agree, but options and alternatives are a good place to start.

That’s the dialogue we’re having with the new provincial government. We are also reaching out to stakeholders, our employees and unions, communities and other electricity generators, on innovative ways to look at the trade-offs between the prices we pay for electricity each month, the environment, jobs and economic growth.

The stakes are high. But the challenges are not insurmountable. For TransAlta, the key to success is having the time to successfully implement the coal transition and introduce new technologies and be on the forefront of growth in Alberta — because we have always been confident that our home province will continue to grow. That’s the way we’ve looked at change for more than 100 years.

Last updated: June 16, 2015