Calgary, Alberta — December 9, 2025 — Leads & Copy — TransAlta Corporation has announced a long-term tolling agreement with Puget Sound Energy, Inc. to convert its Centralia Unit 2 facility from coal to natural gas-fired generation. The converted facility will have a contracted capacity of 700 MW.
The agreement provides PSE with the exclusive right to the capacity, energy, and ancillary service attributes of the facility, as well as dispatch rights. The Centralia facility is slated to cease coal-fired generation by the end of 2025, with the conversion to natural gas expected to reduce the facility’s emission intensity profile by approximately 50 per cent.
According to John Kousinioris, President and CEO of TransAlta, the Centralia facility has a history of providing reliable and affordable power to the Pacific Northwest region and that the company is pleased to extend the useful life of this asset and support the ongoing reliability needs of PSE and its customers. Kousinioris also expressed gratitude for the constructive engagement received from the Department of Ecology and other state and local regulatory bodies during the project’s development.
The conversion project is projected to deliver a build multiple of approximately 5.5 times, with TransAlta expecting to earn a full return on and of capital within the contract term. The company plans to make a final investment decision after obtaining all required approvals in early 2027.
The agreement is subject to customary regulatory approvals, including PSE receiving satisfactory approval from the Washington Utilities and Transportation Commission.
Approximately US$600 million in capital expenditures will be required to extend the facility’s useful life and convert it to natural gas-fired generation. The target commercial operation date is late-2028, and the facility will operate until the end of 2044 under the terms of the agreement, which provides a fixed-price capacity payment that provides PSE the exclusive right to the capacity, energy and ancillary service attributes of, as well as the dispatch rights to, the 700 MW facility.
TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 70 per cent reduction in GHG emissions or 22.7 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.
Investor Inquiries:
Phone: 1-800-387-3598 in Canada and US
Email: investor_relations@transalta.com
Media Inquiries:
Phone: 1-855-255-9184
Email: ta_media_relations@transalta.com
Source: TransAlta Corporation
