* Aim is to cut U.S. plant's emissions by half in 15 yrs
* Also looking at future of Alberta coal plants
* Q1 EPS C$0.31 vs analyst estimate C$0.30 (Recasts with fuel-switching, adds CEO comments)
By Jeffrey Jones
CALGARY, Alberta, April 27 (Reuters) - TransAlta Corp (TA.TO) is preparing for regulations forcing drastic emission cuts from coal-fired power by studying switching away from the fuel at some plants and using technology to deal with the carbon at others, its chief executive said on Tuesday.
TransAlta, Canada's largest publicly traded electricity generator, is plotting its strategy as Canadian and U.S. governments lay the groundwork for tighter regulations on greenhouse gas emissions, CEO Steve Snyder said after the company reported a 60 percent jump in first-quarter profit.
The company runs 70 power stations, and its five coal-fired ones are among its largest. It has two more under development.
"We have sites that would be excellent to permit for potential gas plants. We have plants at various ages, some of which are excellent candidates for life extension with new technologies," Snyder told analysts. "So I think we'll keep all those options open and pursue all of them as we go forward."
A day earlier, TransAlta signed a memorandum of understanding with Washington state to examine ways to cut carbon emissions from the Centralia coal-fired power plant in half by 2025. TransAlta will look at switching to other fuels, such as natural gas or renewables, at the facility, which provides 10 percent of Washington's electricity.
It is also mindful of remarks by Canadian Environment Minister Jim Prentice, who said on Monday that Ottawa may make natural gas the new standard as coal plants reach the end of their usefulness.
A year ago, when Prentice first made comments targeting coal-fired plants, Snyder said federal rules phasing them out would hurt Alberta and not necessarily cut emissions sharply. The company is now looking for solutions to reduce carbon while making sure the lights stay on, he said.
Plans for Centralia reflect the lack of viable nearby coal supplies or opportunities in the region for carbon capture and storage, he said.
In Alberta, where TransAlta is currently planning a carbon-capture project, there appear to be more options. However, the company is not rushing to any one alternative.
Snyder said he doesn't want to make too big a commitment to any one option right away. "That could come back to haunt availability, supply and reliability 10, 15 years out. So I think everyone is on a measured, steady pace right now. I think that's constructive."
Despite weak power prices in the first quarter -- and a lack of wind, which hampered TransAlta's wind farms -- the company earned C$67 million ($66 million), or 31 Canadian cents a share, up from a year-earlier C$42 million, or 21 Canadian cents a share.
Earnings had been forecast at 30 Canadian cents a share, the average of analysts' estimates compiled by Thomson Reuters I/B/E/S.
The jump was due to better reliability and production, it said. Fleet availability rose to 91.4 percent, up from 86.4 percent, because of fewer outages at the Keephills, Sundance and Wabamun plants in Alberta.
Revenue in the quarter was C$723 million, down 4 percent from C$756 million in the first quarter of 2009.
Shares in TransAlta were down 50 Canadian cents, or 2 percent, at C$21.50 on the Toronto Stock Exchange on Tuesday afternoon. They have gained 11 percent in the past year.
$1=$1.01 Canadian Additional reporting by Bhaswati Mukhopadhyay; editing by Peter Galloway