February 10, 2009 / 2:27 PM / 9 years ago

UPDATE 1-TransAlta sees profit hit after Sundance outage

OTTAWA, Feb 10 (Reuters) - TransAlta Corp (TA.TO) said on Tuesday that first-quarter net income will decline by C$17 million to C$19 million ($13.9 million to $15.5 million) due to an outage and ongoing repairs at its Sundance 4 thermal plant.

Canada’s biggest investor-owned power producer said there was a mid-December outage at the 406-megawatt facility due to a fan failure. Since then, Sundance 4 has been de-rated to about 205 megawatts.

TransAlta said it will take longer than planned to repair the induced draft fan and it expects full service to return in the third week of February.

The company said its first-quarter production is expected to be reduced by about 280 gigawatts and net income will decline between 9 Canadian cents and 10 Canadian cents per share.

Under its power purchase agreement, the company has given notice of an event of force majeure and, if successful, it could recover penalties of about C$12 million to C$14 million in net income. ($1=$1.22 Canadian) (Reporting by Susan Taylor; Editing by Derek Caney)

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