TransAlta Corp (TAC) 2013 Q3 法說會逐字稿

Welcome to the TransAlta Corporation 2013 third-quarter results conference call.

(Operator Instructions)

The conference is being recorded.

(Operator Instructions)

At this time, I would like to turn the conference over to Brent Ward, Director Corporate Finance and Investor Relations. Please go ahead, Sir.

Thank you, Laurie. Good afternoon, everyone. I'm Brent Ward, Director of Corporate Finance and Investor Relations. Thank you for joining us for TransAlta's 2013 third-quarter conference call. With me today are Dawn Farrell, President and Chief Executive Officer; Brett Gellner, Chief Financial and Investment Officer; John Kousinioris, Chief Legal and Compliance Officer; and Todd Stack, Vice President and Treasurer.

Earlier this morning we released our third-quarter results. For those not on our webcast, the presentation is posted on our website under the investor section. We will refer to the presentation during the call. All information provided during this conference call is subject to the forward-looking qualification which is detailed in the MD&A and incorporated in full for the purposes of today's call. The amounts referenced are in Canadian currency unless otherwise stated. The non IFRS terminology used including comparable earnings, comparable EBITDA, comparable gross margin, funds from operations and free cash flow are reconciled in the MD&A.

On today's call, Brett Gellner is going to provide an overview of our overall performance for the third quarter, an update on business activities and outlook for the remainder of 2013. And he is also going to review the financials before going to the Q&A. Dawn is here and available for the Q&A, but is unfortunately under the weather and is saving her voice. With that, let me turn the call over to Brett.

Okay, thanks Brent. Good afternoon, everyone. What I'm going to do is, I'm going to start by reviewing our strategic progress year to date.

We entered this year focused on really four key objectives. The first was to add long-term contracts to our existing assets. Two, to advance our growth strategy. Three, to improve our energy trading business. And fourth, to realize the benefits of the reinvestment in our Alberta coal fleet and the cost improvements we've made at Centralia. As you can see from this slide, we've made significant progress on the contract front. These re-contracting activities, they have the benefit of stabilizing our cash flows, but also extending the life of our assets and supporting our investment-grade credit ratings.

In late August, we signed a new 20-year contract for our Ottawa facility with the OPA. And in September, we added 50 megawatts of long-term contracts for the geothermal power through Cal Energy, which is our joint venture with MidAmerican. That 15-year megawatt contract was on top of the one we did earlier in the year, and those two combined now represent approximately 40% of the capacity for the geothermal assets, and they go out to 2039. We also received during the year approval of the Puget contract, and just this week we announced a contract extension with the HP to supply power to the Nickel West operation in Western Australia. And that's from our Southern Cross facility. So when you look at that in total, we've re-contracted 835 megawatts of capacity this year.

Our second objective was to advance our growth strategy, and we're seeing success there as well. During the quarter, we closed our IPO of TransAlta Renewables and this created a vehicle for us to pursue growth opportunities in the renewable sector. We also were able to strengthen our balance sheet, by paying down debt with the proceeds from the offering. And then within two months of the creation of TransAlta Renewables, we announced the acquisition of a 144-megawatt wind farm in Wyoming which is under a long-term 15-year contract. So the benefits of having TransAlta Renewables in place are paying off and are meeting our objectives.

And also this year we achieved full commercial operation of our New Richmond wind farm in Quebec, which came into operation in Q1. And in addition we acquired Solomon gas in late 2012 and it's been contributing to our bottom line throughout 2013. In total, all the growth adds approximately CAD65 million in incremental EBITDA on an annualized basis. In addition, add to the level of contractedness and life of TransAlta's fleet but also they provided diversification of our cash flows.

The other key area that we've been focused on this year was to improve the performance of our energy trading business. We are seeing positive results here, and they are in line with our expectations. The risk management program we implemented last year decreased our risk tolerance and increased our focus on the shorter-term. This program is proving to be successful and I will take you through the numbers in a bit. And we are realizing the benefits in the proprietary book. We also continue to leverage the abilities of our trading team to optimize around our assets.

Just now turning to our results, at a summary level, we delivered higher comparable EBITDA both in the quarter and on a year-to-date basis. These increases were largely driven by steady performance in gas, renewables, and trading, along with new growth. In addition, while Centralia is lower than last year due to higher-priced hedges rolling off, it is performing better than we expected, in part due to the cost initiatives we undertook there. With respect to Alberta Coal, our availability is strong which shows that the investments we made in our boilers over the last few years is paying off. But there are cost pressures that we continue to manage. First, we are very focused on optimizing the amount of outage days to minimize our exposure to higher rolling average pool prices. And secondly, we are focused on managing our coal costs.

Coal costs have increased year over year as we've been mining in advance of the start up of Sundance 8. Once that is up and running as we get into next year, we do and are targeting our coal costs on a per ton basis to get back to our 2012 levels next year. So overall on the coal side, the Alberta Coal side, our team is very proactive in our asset management strategies and very focused on improving our Alberta Coal asset performance. In terms of availability, we achieved good results across the fleet, and you can see this in the appendix of the presentation. With the exclusion of Keephills 1 fm, our availability is tracking to the target we set out late last year.

If you'd just go to the next slide, what we provide here is a scorecard the key objectives we set out last year at Investor Day. I've covered most of these, but you can see we are tracking well against our growth contracting and trading targets that I talked about earlier. Financially, we are very committed to our investment, maintaining our investment-grade credit ratings, and we continue to have access to multiple sources of capital and strong liquidity. And finally, we are on track to realize the cost savings of CAD25 million to CAD30 million per year from the realignment carried out at the end of last year.

Turning to our growth now, we are actively pursuing several opportunities in our core markets. On the gas front, we are exploring co-generation combined cycle opportunities in Alberta, British Columbia and in Australia. And the TAMA power continues to work on Interconnect and permitting of our Sun 7 facility here in Alberta. In renewables our focus is primarily on acquisitions and we're seeing that predominantly in the North American and Australian markets.

Now just a little bit more detail on the business, what this slide shows is the gross margins by business unit. As I mentioned, overall margins have increased both on a quarterly and year-to-date basis, driven predominantly through gas, renewables and trading and these have more than offset the contracts rolling off at Centralia and the higher costs we are experiencing at Alberta Coal. In the gas fleet, the assets continue to perform very well from an operational standpoint, and we've benefited from the addition of Solomon, which contributes approximately CAD40 million in cash flow on a full-year basis. For the quarter, the gas business contributed CAD14 million more in gross margin relative to last year, and CAD43 million more on a year-to-date basis.

In terms of renewables, the fleet also performed well, with gross margins up slightly compared to the same period last year on a quarterly basis, It's up CAD58 million on a year-to-date basis. Overall, it's benefiting from the addition of the New Richmond wind farm, which I talked about, but also we are seeing some higher prices on our Hydro fleet. Energy trading, as I mentioned, had a good solid quarter delivering CAD22 million in the quarter, and CAD53 million on a year-to-date. The team continues to perform well across all markets, and as a result we've increased our target to CAD45 million to CAD60 million in gross margin for the year.

As I mentioned, all of this has partially offset -- or partially offset by the year over year decreases from our coal business. In terms of the Alberta Coal side, we did have fewer planned outages relative to the same period last year, but this was offset by higher costs associated with the mining. Also the higher rolling average pool prices impacting predominantly penalties at Sheerness during its outage and the Keephills 1 force majeure provision.

As I mentioned, comparable EBITDA is higher on the quarter and year to date. Funds from ops, however, decreased for the quarter to CAD174 million, down from CAD233 million for the same period last year. This decrease is primarily attributable to differences in timing of cash proceeds associated with our power hedges. For the full nine-months FFO was CAD550 million. Cash flow from ops was up significantly from last year, and this was due to the changes in working capital.

In the quarter we were able to reduce our debt levels by CAD343 million relative to Q2 2013. This was from the proceeds from the IPO, but also from the drip and positive changes in the working capital that I just mentioned. Our comparable earnings for the quarter were CAD39 million, which were roughly in line with last year. On a year-to-date basis, comparable net earnings were CAD80 million, and this is up from CAD62 million from the same period last year.

Finally, in terms of our reported net earnings, they were impacted this quarter relative to last due to predominantly a further write-down of our deferred tax assets. As I mentioned in previous quarters, the write-down of our deferred tax asset is a non-cash charge, whereas TransAlta continues to have significant tax value remaining, which we can apply to future US growth opportunities. Furthermore, as we add assets from the US to the business, we may have an opportunity to increase our deferred tax assets from an accounting standpoint. But again, we will evaluate that quarter over quarter. In terms of capital spend to date, in 2013 we've spent CAD245 million on sustaining and CAD26 million on productivity initiatives and we are on track to achieve our targets for the year.

So, just going to now wrap up here, talk a little bit about the markets and also our level of contractedness across the portfolio. In the Pac Northwest, power prices continue to strengthen and relative to last year in response to higher gas prices and a return to a more normalized hydro year. In Q3, mid-prices settled over 60% higher than last year, and averaged around that and CAD35 mark. Mid C forward prices are currently averaging about CAD36 per megawatt hour for the balance of Q4 -- or in Q4. We are essentially fully hedged at Centralia at about the CAD40 mark, so above that.

In Alberta power prices were strong for the third quarter. This was driven by tight supply-demand balances due to both generation, but also tie line outages that took place. But we are also continuing to see steady load growth in the province. Prices in Q4 right now are in around that CAD60, CAD61 on a forward basis and we are about 90% hedged in around those prices.

For 2014, for the portfolio, we are about 83% hedged and you can see this in the appendix. The hedge price is hedged and contracted through our long-term contracts. The hedge price for Alberta is about, on average, about CAD55 per megawatt hour and then about CAD45 in the Pac Northwest. And again, you can have a look at the appendix for more detail.

So now, just lastly, just a quick update on where we are at in terms of the Alberta floods that we experienced earlier. Our team continues to safely and efficiently restore our operations. Three of our hydro facilities we operate here in Alberta, on the Bow River system, continue to be impacted by the flooding events, and are currently being repaired. But it is our view that we have adequate insurance coverage for this damage.

So with that, I'm going to turn it back to Brent and then we will open it up for questions.

Next, Brett. We will answer questions from the investment community first and then open up the call to the media and then we can respond to individual investors. So please identify yourself when asking a question. I'll remind you that we do not provide guidance and that we will answer any model-related questions off-line after the call. Laurie, we will now take questions.

(Operator Instructions)

Ben Pham, BMO Capital Markets.

My first question is on your cash flow guidance. Maybe I missed it somewhere, in the MD&A. Where are you tracking in terms of cash flow expectations for this year? Looks like you're down from last year. So do you expect to make it up in Q4?

Yes, we are targeting, continue to target in Q4, probably in that CAD200 million to CAD250million range. And somewhat dependent on where Alberta prices and auxiliary prices and up, but that is our target for the year.

Okay, so you're probably going to be at the lower end of the guidance, then?

Right.

And my second question is on Centralia. I'm on recontracting, and I recall Dawn mentioned that there is some issues of recontracting, getting additional contracts last quarter. Could you give us a general update on the environment there? Also did that have some sort of impact on the impairment charge you took on the tax asset?

Yes, so I will take it. We continue to -- our team continues to look for longer-term contracts there, but also we continue to hedge at opportune times. Like I indicated, we're predominately hedged for the balance of this year at prices that are above the forward market. Forward market ran up a couple months back and we were able to capture some of that value.

The deferred tax asset valuation is -- the methodology around IFRS accounting is a bit different than the asset side. So, it wasn't due to changes in outlook and necessarily due to prices or anything like that. It was just some of the methodology and how the tax asset changes quarter over quarter. On the asset side, we left it unchanged on the PP&E side of the business.

Okay. Sorry, when I mention contract, I was meaning more the utilities.

Right, and like I said, we have a team that is continuing to look for longer-term contracts, talk to the various utilities and the smaller, not just the bigger ones, but the smaller ones out there. That's a primary focus for us.

Juan Plessis, Canaccord Genuity.

You mentioned higher coal mining costs in the quarter in advance of the start up of Sun 1 and 2. Can you quantify the magnitude of those additional mining costs in the quarter?

Yes, a few things, Juan, is the fact that you got lower tons on the denominator obviously and you are incurring costs, then that is where the standard rate goes up. So that is part of it. But we have purchased some equipment to enhance the productivity of the mining there, and to gear up for the full amount that we need next year.

So again, one incurs those costs today and start to see the tonnage associated with those show up more next year. That is why it is a bit of a transition with Sun 8 coming back on. We are, like I said, targeting to have our standard rate on a per ton basis, targeting it to go back down to that 2012 level.

Right, so how much were the additional costs in the quarter?

Well, in our outlook we mentioned that our standard rate was going up around that 10%, 11% relative to 2012.

Okay. Thanks for that. And then with respect to your cash flow, you mentioned there is timing differences on the cash proceeds that created that CAD60 million swing from Q3 2012 to Q3 2013. Can you tell us how much these timing differences were in each of those quarters? Do you expect to see this cash come in in Q4?

Yes, some of it relates to prior periods and where we would have -- again, if you've got a position that is further out and you market, then, obviously until you settle that position, the cash doesn't roll in. So that is the timing difference that we see. Given the amount of positions that we might have against some of our hedges, and also in the proprietary book, it is difficult to give you any guidance for Q4. That is just trying to explain in the table what is causing those differences quarter over quarter.

So, it went against you this quarter, but it was a positive last year?

Correct.

Okay. And then with respect to Keephills 1, I believe you're still taking that 15% provision on that outage. What did that cost you? I think you said it cost you about CAD10 million pretax in Q2. I calculated probably around CAD8 million or so in Q3, is that correct?

Yes, around CAD10 million, yes. And it is up and running, by the way.

Yes. Okay, great. Thanks very much.

Paul Lechem, CIBC World Markets.

Just following on Keephills 1 in terms of the force majeure, do you have any insight into the timing of any resolution of the arbitration there? In terms of getting the force majeure confirmed on that?

No, they just take time, and as you know in our experience with the 731, it just takes time to work through it.

Where it is in the process right now? Have there been hearings or where are they?

No, early days.

Okay, so you have no defined timeframe on this. In terms of actual repair costs on that, did you actually incur any costs above and beyond insurance or recoveries to repair that?

Yes, and those would be in our capital costs, the repair. So, those are already booked.

Could you break that out or do not have that?

Pardon me?

Do you have the specific number?

We don't typically provide by unit, Paul.

All right. Your planned major outages year to date, you spent CAD122 million out of, I think the target was CAD165 million to CAD185 million, so what remains in Q4 to get you in that range? Do you have any major outages planned for Q4? And when in the quarter?

Yes, we are in the middle of an outage on one of our units right now. Some of it is just general maintenance and it's not just the coal fleet, it's across our gas business as well, and across the board.

Which unit is that? When is it expected to come back on?

Soon I hope. It's in the system in the ISO system, but early November.

Okay. Last question, on the geothermal assets, you contacted more of them. Are you getting closer to a point where you feel you can now drop it down into renewables? Or what are you looking for in terms of being able to drop that asset down?

Yes, as I indicated when we were doing the IPO, that one, it's not just the contracting, there is debt against those assets. It gets paid down every year and that matures in 2018. Plus the CapEx there can be lumpy year-over-year, given the nature of geothermal. So it is not just the contracting that we want to sort through, Paul, before we thought about that one.

Okay. All right, thank you.

Linda Ezergailis, TD Securities. Linda, are you there?

Sorry. I'm wondering if you could give us an update on the CASA situation, and what the nature of the discussions are? When that might be resolved, and what the bookends of outcomes might be?

Yes, no real change to be honest, at this stage. So there is really no update there, Linda, to be honest, from what we have talked about in the past.

So, it's looking like status quo will prevail?

No, I would necessarily lead to that conclusion, I'm just saying that there -- it is something -- at the end of the day, the greenhouse gas legislation just got done not long ago. And I think this is the next one to sit down and think about. So, and there's multiple parties involved in that kind of stuff.

Linda, it's Dawn Farrell here. Let me just try for as long as my voice lasts. There is a team in Alberta that's working on CASA and as a process, our people are involved in it. They are working through what the issue looks like in terms of coal.

Because what they want, of course, what we want to do is align CASA with shutdown of the coal plants because of the federal regulations. So that's underway. I think it's going well. And it's not something we would report on until we had a definitive change.

Okay, so that might get resolved in maybe a year, not five years, but not months?

I would say within a year. Not five years and definitely not months.

Okay. That's very helpful. Just a follow-up question, I don't think I need Dawn's voice for this one. The Energy trading, can you comment on what were the conditions in place year to date? And do you expect these conditions to continue in 2014 to allow for stable and higher returns?

Yes, as we talked about, it is really just singles and doubles and all the markets. So there is nothing -- I don't think it's a particular market condition or anything. Their target is to continue to have that more steady performance quarter over quarter, more year over year, but focus more on the shorter-term positions. You can't point to a particular market condition, it is more just how the team has been executing.

Great, thank you.

Jeremy Rosenfield, Desjardins Capital Markets.

Just a couple of follow-up questions, first on Keephills 1. I think you were doing some evaluations of the other coal plants to see if they had similar issues. I'm wondering if there's any updates on that.

No updates at this stage. Obviously when we go in and do outages, we will be focused on that. We do condition assessments across our entire fleet and it is just part of it. K2, obviously, is the next one in terms of the outage, so we will have a look at it when we get there.

Okay, so nothing specific at this point from any of the other plants that would indicate that they might have similar issues to what K-1 had?

No.

Okay. Just going back to Linda's question on Energy trading. To be more specific, I don't know if you can get into the specifics, but is it basically strong pricing? Or maybe greater volatility that could be leading to better results? Is that something that is driving the operations, here?

No, because if you look back last year, we would've had volatility, as well. It is really how the length of the positions are taking and across the markets that they are in. It's not that we are seeing more are less volatility necessarily, that is resulting in those trading differences. It is really how they are going out and how far they are going out and then getting off those positions.

Okay. On the dividend and the dividend reinvestment program, curious if you have the latest in terms of the participation rate in the program?

It's just a regular drip now as you know and it's in around 30% to 35%.

Okay. And maybe just one clean-up question. Actually on slide 7, at the bottom, you've talked about potential investments in solar technologies. I'm wondering if you can provide any color or if you want to elaborate on that at all? What types of opportunities you might look at?

It is something we haven't invested in, as you know, to date. We are seeing opportunities out there, some in Canada, but a lot of it is in the US, as well. And they have to be long-term contracts, hit our return targets and so on.

So, we are going to be patient. We are just seeing a bit more than probably -- or we are looking at more than probably we used to. We just wanted to flag it, that it is something that we are monitoring, whether or not we get anything done on that front. But at the end of the day, the economics have to work, and they have to be long-term contracted.

Okay. Great. Thanks.

Andrew Kuske, Credit Suisse.

I know it's only been a short period of time since you've had Sun 1 and 2 up and running again, but could you give us any color as to really how you see those units performing since the big rehab of them?

Yes, they are performing well, Andrew. That's all I can say. Everything is good. They started up well and ramped up well, and seem to be performing in line with what we expected.

I know we can see everything on AASO every day, but curious if you had any additional color and commentary on that. As far as your presentation goes, there is one slide within the slide deck where you highlight the potential renewable acquisitions in Australia. If you were to do such a thing, would they have a similar tax structure around them as your current assets in Australia do?

Obviously, likely. When we do those, we look at everything we've got there and the current situation, so we factor it in from that perspective. I would say that there, it's really wind and solar that we are starting to see. And again, we will have the same discipline as we would up here in terms of returns, long-term contracting and so forth.

To your point, the tax, we would factor that in. So let's say it's more taxable than we saw up here, we would just factor that into our returns in economics and adjust. Because the cash flows obviously would be a bit lower because of that tax draw.

And then on the breakdown of solar versus wind in Australia, is it more solar in Western Australia? And then wind opportunities in the East?

Well first of all, I would say gas-fired continues to be -- gas and diesel are the primary things going on there. Just because of the amount of power that some of the mining companies need.

They are looking at the wind and solar in part, just as a -- there are a little bit of tax benefits or green attribute-type benefits. But to date there hasn't been a ton in wind in Western Australia. There's been more in the other parts of Australia, and to be honest, some of the returns we're not going to chase, chase, they are too low for us.

But we see some opportunities where we think we can add some value and have a competitive advantage. So, again, I would expect more on the gas side over time than I would necessarily the wind and solar. But we are going to be focused on it and opportunistic if it comes our way.

Okay, that is great. Thank you.

Robert Kwan, RBC Capital Markets.

First here, on Centralia, if you look at the production, it looks like the plant, at least production-wise, ran pretty well during the quarter. Realized pricing was very similar to the forward curve if we look at a couple years. And so I'm wondering, was there anything else going on at the plant level this quarter? Or is this really the earnings power of Centralia, at least until we get the PSC contract kicking in?

Yes, I would say it's probably not a bad indicator from an operations perspective, Robert. Certainly, the Puget contract kicks in, as you mentioned. The fuel benefits and the rail costs and the operating costs that we've put in place are kicking in.

The team is very focused on everyday making sure they are managing their costs very closely, not just on an operating, but on the capital side. So I would say it's a pretty good representation, and it's really now just the revenue side of the equation.

But on top of that, as you know, we do economically dispatch that, particularly in the hydro months. Our team consistently can manage that asset and help manage that asset through those months. Also through the day, if there's lower prices, we might turn down more and be able to satisfy some of our hedges through the market.

I guess, Brett, you mentioned the economic dispatch. Are there still a material amount of contracts that are in Q2?

Are there which, sorry?

Are there a material amount of contracts that are actually in Q2?

For next year, you mean?

Yes.

We still have some. The team always -- they all if they see Q2 even this year go up, they might have done some hedges on that.

And then if you get in the quarter and let's say it's a really heavy hydro, prices drop dramatically. They will just turn the plant down and satisfy those with the low prices. So that is the dynamic that goes on.

It doesn't necessarily have to be a Puget-like contract. It could have been something that they put in place for some of the megawatts even this year, for that quarter.

Okay. Last question, on Alberta coal costs, and the rise on the standard cost basis. Brett, you also mentioned, though, that you were doing some mining for Sun A and so I would've thought that would've increased tonnage and therefore drove down the standard cost per ton?

It's associated with our burn, and so you are mining in advance of the plant up and running and starting to burn the coal. So you've got to make expenditures and so on. But when I say tons, I'm talking about burnt tons in the plant. Not sitting on our coal pile, if you know I mean.

Okay, so the mining for Sun A wasn't really relevant to the increase? So what else was going on, given this is an increase from last quarter? Did something happen during Q3? (multiple speakers)

Yes, sorry Robert. You are mining to get the tons ready so that when Sun A started up, it could start running. And the tons I'm talking -- so you're spending capital for tons that are not burnt yet or consumed. And so that's the dynamic. So our costs are there, but the burnt or consumed tons are lower, because we are not burning them yet, But now -- (multiple speakers)

And that is what runs through the P&L?

Yes, when you burn it, it runs through the P&L. Is that what you --

No, what I'm saying is you're incurring the costs ahead of the burn. So it sounds like you've increased the numerator and denominator stayed the same.

So let's say it's capital. So we'll book that capital. So additional trucks and so on. If there is an OM&A cost, we include that in our expenses.

Got it, okay, the capital thing.

Robert, we're happy, if you want to call Brent afterwards and spend some more time on this, happy to do so.

(Operator Instructions)

Charles Fishman, Morningstar.

I want to make sure I understand this. On the Energy trading, in your answers to the previous questions, you're having a good year. But really on a normalized basis, you are still thinking CAD40 million to CAD60 million is where this business is at, is that correct?

Yes, and I don't think we've shown it in this deck, but we have in other decks where we go back quarter by quarter for numerous years. And you'll see that if you take the average, that is the range.

I think you did that on your Analyst day. You had that slide, I recall.

Yes and we may have produced it since then. So that is, when we talk about the range that we said, that is where we're tracking against.

Okay and then the other question was on the Bow River flooding. You mentioned it last quarter. You're talking about it again. Is that at a point now where it's having a little bit of an impact on earnings that's material?

No, we have BI for production after a certain period of time, which we are into, so that is fine. These particular units, again, we can move the water from one to another and benefit from that water. Remember this is -- there is a series of 11, essentially, units down coming out of the Rockies, down the Bow and then a couple in the North [Sasko] and into [Eberton]. So it's a series of units versus all independent.

Okay, thank you.

Jeremy Rosenfield, Desjardins Capital Markets.

On the two recent new PPAs, I guess Southern Cross and the Ottawa one, you're probably not going to provide a lot of detail. But in terms of commodity price exposure, are you looking at contracts right now that have fuel cost pass-throughs so there is no commodity price exposure?

Yes, essentially, we are completely protected in both those.

Okay. Great. Thanks.

This concludes the analyst's Q&A portion of today's call. We will now take questions from members of the media.

(Operator Instructions) Tanya Foubert, Rocky Mountain Outlook.

You were talking about the operations on the Bow River affected by the flood. I was wondering if you could provide a bit more detail of whether or not there's been an impact for terms of costs of repairing those? As well as more detail about the Cascade facility, and what is needed for that one to be back in operation?

So there are, obviously, costs for repair. And our insurance, we are confident we will be well covered from an insurance perspective. We don't get into details on the individual plants per se. But there are things that the team is fully focused on, a separate teams is very focused on restoring those. It is those three facilities. So I wasn't sure if that helped.

Yes, that's good. Thanks.

Okay.

(Operator Instructions) There are no more questions at this time. I will now turn the call back over to management for concluding comments.

It's Brent here. Thank you, everyone, for dialing in. And just a reminder that we are available after the call for any further questions throughout the day and tomorrow. So that wraps up TransAlta's third-quarter call.

Ladies and gentlemen, this concludes today's conference call. You may disconnect your lines now. Thank you for participating and have a pleasant day.