October 28, 2011 / 1:18 PM / 6 years ago

UPDATE 3-TransAlta profit climbs on Alberta power prices

* EPS C$0.22 vs C$0.18 a year earlier

* Comparable EPS C$0.27 vs analysts estimated C$0.24

* Alberta power prices, energy trading results strong (Adds CEO comments)

CALGARY, Alberta, Oct 28 (Reuters) - TransAlta Corp’s (TA.TO) quarterly profit rose 25 percent on rich wind and hydro margins, stronger Alberta electricity prices and the addition of a new coal-fired generation unit, the Canadian power producer said on Friday.

The company also said it will boost maintenance and plant downtime in 2012 as it prepares older Canadian coal-fired plants for upcoming federal carbon-reduction regulations that are likely to include accelerated retirement.

TransAlta, known for coal, gas and renewable energy facilities in Canada and the United States, earned C$50 million ($51 million), or 22 Canadian cents a share, in the third quarter, up from year-earlier C$40 million, or 18 Canadian cents a share.

Excluding unusual items, including some hedging-related losses, profit rose 53 percent to C$61 million, or 27 Canadian cents a share.

That beat an average estimate among analysts by 3 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Revenues were C$629 million, down 3 percent from C$651 million due to an increase in the number of planned and unplanned outages at Alberta coal facilities and to scheduled maintenance work at natural gas facilities, TransAlta said.

Chief Executive Steve Snyder, who retires at the end of this year, said the company needs to revamp its maintenance schedules to set up older coal-fired plants to run well for 10 or 15 years rather than extending their lives beyond that.

“The impact in 2012 will require an above-average maintenance schedule and related outage days,” Snyder told analysts. “These investments will ensure we get the best returns and cash flow possible from our facilities facing any accelerated closure dates.”

Under the federal rules, due to come into force on July 1, 2015, coal-fired power plants will have to have cut emissions to levels compatible with high-efficiency gas-fired stations.

Full details of the regulations are not known, but TransAlta is hoping it has some flexibility in how to handle cutting emissions and the timing for doing it.

Snyder said he hopes the government provides more details by the end of the year.

The company is developing a carbon capture and storage facility at one of its Alberta coal plants that includes government funding.

TransAlta said its third-quarter results were helped by the addition of the new Keephills Unit 3 coal-fired power plant in Alberta and stronger margins in its energy trading business.

During the quarter, the company’s plants were available for use 88.3 percent of the time, adjusted to account for the outage of the Centralia coal-fired plant in Washington state, compared with 91 percent during the same period in 2010.

During the second quarter, TransAlta idled the Centralia operation due to weak market conditions in the U.S. Pacific Northwest.

Snyder said the company has a team in place to negotiate long-term contracts for the facility, but there is no rush to sign them as market conditions remain poor.

“Our plan is, as we go into 2013, that we should have good profile for the contracting, and I think it will take us a full year to get that into place,” he said.

TransAlta shares were off 9 Canadian cents at C$22.50 on the Toronto Stock Exchange on Friday, representing a year-to-date increase of about 6 percent.

$1=$0.99 Canadian Reporting by Jeffrey Jones and Aftab Ahmed; editing by Peter Galloway

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