TransAlta and Puget Sound Energy sign power purchase agreement

Wed Jul 25, 2012 7:45am EDT

* Reuters is not responsible for the content in this press release.

TransAlta (TSX:TA) (NYSE:TAC) and Puget Sound Energy (PSE) jointly
announced today they have entered into a power purchase agreement for
coal transition power from the Centralia generating station. If approved
by Washington utility regulators, the contract will benefit PSE customers
by providing them another source of low-cost power, while advancing a
separate TransAlta agreement with state government and the environmental
community to phase out coal-fired power generation in Washington by 2025.

    PSE selected the TransAlta offer through a competitive "Request for
Proposal" (RFP) process, evaluating the Centralia resource against more
than 30 competing power supply alternatives. 

    "I'm delighted that TransAlta and Puget Sound Energy came together to
help advance the state's goal of replacing coal-fired power," said Gov.
Chris Gregoire. "This will help our state move toward more
environmentally sustainable energy." 

    The state Legislature in 2011 passed a bill codifying a collaborative
agreement between TransAlta, lawmakers, environmentalists, and labor
representatives. The timelines agreed to by the parties enable the state
to make the transition to cleaner fuels, while preserving the family-wage
jobs and economic benefits associated with the low-cost, reliable power
provided by the Centralia plant. The legislation allows long-term
contracts, through 2025, for sales of coal transition power associated
with the 1,340-megawatt (MW) Centralia facility, Washington's only
coal-fired plant. 

    "This agreement with Puget Sound Energy provides customers with a
stable-priced, low-cost source of power, while advancing TransAlta's goal
of contracting the output of the facility," said TransAlta USA President
Paul Taylor.  

    "In today's tough economy, we know our customers need us to keep energy
costs reasonable for their homes and businesses," said Dan Doyle, PSE
senior vice president and chief financial officer. "And, over the
long-term, we know our customers are also concerned about the
environment. This agreement balances both needs."  

    Under its power purchase agreement with TransAlta, PSE will buy 180 MW of
firm, base-load coal transition power from TransAlta starting in December
2014. In the following 12 months the contract increases to 280 MW. From
December 2016 to December 2024 the contract is for 380 MW, and in the
last year the contract volume drops to 300 MW.

    PSE expects to need additional power supplies for its customers beyond
what the TransAlta contract provides. The utility continues to review
other short-listed bids from its latest RFP process, and anticipates
issuing another RFP in 2013. 

    The power purchase agreement is supported by environmental groups. 

    "We applaud Puget Sound Energy for working with TransAlta to transition
Washington State off of coal and in the process assist Lewis County and
the workers to make the transition onto clean energy," said Bruce Nilles,
Senior Director of the Sierra Club's Beyond Coal Campaign. 

    The proposed TransAlta-PSE power transaction now awaits review by the
Washington Utilities and Transportation Commission. 

    About TransAlta 

    TransAlta is a power generation and wholesale marketing company focused
on creating long-term shareholder value. TransAlta maintains a
low-to-moderate risk profile by operating a highly contracted portfolio
of assets in Canada, the United States and Australia. TransAlta's focus
is to efficiently operate our geothermal, wind, hydro, natural gas and
coal facilities in order to provide our customers with a reliable,
low-cost source of power. For 100 years, TransAlta has been a responsible
operator and a proud contributor to the communities where we work and
live. TransAlta is recognized for its leadership on sustainability by the
Dow Jones Sustainability North America Index, the FTSE4Good Index and the
Jantzi Social Index. TransAlta is Canada's largest investor-owned
renewable energy provider. For more information, visit

    About Puget Sound Energy 

    Washington state's oldest local energy utility, Puget Sound Energy serves
1.1 million electric customers and more than 750,000 natural gas
customers in 11 counties. A subsidiary of Puget Energy, PSE meets the
energy needs of its customers, in part, through cost-effective energy
efficiency, procurement of sustainable energy resources, and far-sighted
investment in the energy-delivery infrastructure. PSE employees are
dedicated to providing great customer service that is safe, dependable
and efficient. For more information, visit 

TransAlta Corporation - Media inquiries
Richard DeBolt
Director, USA External Relations
360-742-3112 or Cell: 360-304-7900
724 Columbia Street NW, Ste. 320, Olympia, WA 98501

Puget Sound Energy - Media inquiries
Roger Thompson
PSE Communications Group

Copyright 2012, Market Wire, All rights reserved.