TransAlta's Report on Sustainability policies, … Report...TransAlta 2 Contents TransAlta’s...
Transcript of TransAlta's Report on Sustainability policies, … Report...TransAlta 2 Contents TransAlta’s...
TransAlta 1
TransAlta's Report on Sustainability
describes how we manage our
policies, programs and performance
across a wide range of social,
environmental and economic issues.
This report covers the calendar year
ending December 31, 2004.
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Contents TransAlta’s Report on Sustainability describes how we manage our policies, programs
and performance across a wide range of social, environmental and economic issues. This
report covers the calendar year ending December 31, 2004.
Introduction to Report
Management Review
Governance and Management Systems
Environmental Performance
Economic Performance
Corporate Social Responsibility
The Numbers
GRI Indicators
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Introduction to Report
Reclaiming and reseeding distributed land.
When you understand how we operate and how we tackle environmental, economic and
social challenges and opportunities, our approach to business becomes much clearer —
and what drives our success as a sustainability leader becomes more obvious.
TransAlta is well known as a supplier of electricity and related products and services. But
our value to the communities we serve is far greater than our capacity to generate power.
Our success is also determined by the way we use resources, manage our impacts on the
land, invest in communities and protect the safety of our employees and our neighbours.
These measures of sustainability — of balancing environmental, economic and social
needs in everything we do — are core principles of our company.
Through our commitment to sustainability, we are not only improving our performance —
we are gaining an international reputation. TransAlta has been named one of the world’s
100 most sustainable companies, in a new global business ranking launched in early 2005
at the World Economic Forum. We are among six Canadian representatives on the list.
The top 100 companies were selected from a pool of more than 2,000 firms representing
large global indexes. These include the S&P 500, MSCI World, FTSE 350 and Eurostoxx.
Companies were rated on a range of criteria that included strategic governance,
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environmental initiatives and human capital/labour relations practices and selected on
their ability to manage strategic opportunities in new environmental and social markets.
The following pages walk you through some of the achievements that have earned the
company a worldwide reputation as a sustainability leader. We encourage you to use this
report as a tool to understand and measure our performance.
STEPHEN G. SNYDER ROBERT J.D. PAGE
president & chief executive officer vice-president sustainable development
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We operate in four countries: Canada (66 per cent of TransAlta’s total generating capacity), United States (25 per cent), Mexico (six per cent), and Australia (three per cent).
What We Do TransAlta is a power generation and wholesale marketing
company based in Calgary, Alberta.
We generate electricity fuelled by coal, natural gas, hydro,
wind and geothermal resources, and sell it to wholesale
customers in various regions of Canada, the United States,
Mexico and Australia. Our focus is to provide our customers
with a reliable, low-cost source of power. For more than 90
years, we’ve been a responsible operator and a proud
contributor to the communities where we work and live.
In 2004, our net generation capacity in operation, under
construction or development was 8,337 MW, and we
employed more than 2,500 people.
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How We Measure Sustainability at TransAlta A GUIDE TO OUR KEY PERFORM ANCE INDICATORS
Environmental
Improve emission intensity As a company that uses fossil fuels to generate most of our electricity, one of our biggest environmental challenges is greenhouse gases. Gross emission intensity, the primary indicator of our company's greenhouse gas performance, shows how much we emit into the global atmosphere for each unit of electricity we produce. This indicator measures our environmental efficiency and enables us to compare our performance with peer companies in Canada and internationally.
Details
Reclaimed mined land Much of the land disturbed by TransAlta’s activities is associated with surface mining of coal to fuel our power plants. By restoring and reclaiming mined land, we return this land to productive use after the coal has been removed. We track our progress in reclaiming mined land as a percentage of reclaimed land to total disturbed land.
Details
Manage water use Efficiently and responsibly managing our water use is a priority for TransAlta. One of the ways we measure water use is through water consumption intensity. This measure tells us how much water (in cubic metres) is required to produce each megawatt hour of electricity from our coal and gas plants.
Details
Economic
Increase production We are in business to deliver our product — electricity — to our various wholesale customers. We measure our success in growing our business by the electricity production (in gigawatt hours) we deliver each year to our customers.
Details
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Maintain healthy balance sheet A healthy balance sheet remains a cornerstone of our strategic approach to long-term sustainability. We need it to weather the volatile conditions in our industry and to keep our cost of capital low and maintain our credit rating. Our cash flow from operating activities is a critical indicator of our financial strength and our ability to invest in new innovative technologies.
Details
Social
Eliminate injuries TransAlta’s goal is to eliminate injuries to workers. We use the injury frequency rate (IFR) to benchmark our safety performance against industry leaders and to measure our progress to our goal of zero injuries. IFR is based on the number of work-related medical aid and lost-time injuries per 200,000 hours worked (about 100 person years of work).
Details
Strive to be a good corporate citizen We strive to be a good neighbour and good corporate citizen in the communities where we live and work. Our commitment to corporate social responsibility inspires us to invest in community initiatives and broader social objectives. We track and report on our corporate donations and sponsorships to not-for-profit organizations and community initiatives.
Details
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Management Review
D ISCUSSION WITH STEVE SNYDER, PRESIDENT AND CHIEF EXECUTIVE OFFICER
What is TransAlta’s sustainability goal?
We want to continually improve our ability as a power generation company to respond to
different economic, environmental and social needs, while ensuring all our shareholders
and stakeholders benefit from our efforts. How we operate our plants productively and
safely, improve revenues and margins, meet or exceed environmental standards,
strengthen the communities where our employees live and work — all creates long-term
value through a responsible sustainable business model.
In terms of carrying out this sustainability approach at TransAlta, what were some significant events in 2004?
All in all, we had a good year, with continued progress. Our environmental and social
activities continued to be highly recognized among our peers and the investment
community. In early 2005, TransAlta was named one of the world’s most sustainable
companies in a global business ranking launched at the World Economic Forum. And, for
the sixth year in a row, we were selected to the Dow Jones Sustainability World Index, a
prestigious investor index which tracks the performance of top sustainability leaders
worldwide.
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We also continued to make progress in reducing our emissions. For example, we’ve cut
our sulphur dioxide emissions company-wide by over 55 per cent since 2000. In the
United States especially, we’re at the forefront of industry in dealing with this issue. At
Centralia, Washington, we’ve invested about $400 million in scrubber equipment to make
sure we not only meet today’s emission targets but foreseeable targets over the next 20
years.
Our Target Zero safety initiative has been embraced across our fleet and has given us
some tremendous results in safety performance. Hazard and near miss reporting
frequency across the company over the past three years has increased from 3,000 in
2003 to 17,300 in 2004. This increase is positive — the more near misses reported, the
more improvements are made. This, in turn, drives improved safety performance and
reduced costs.
What is the company’s greatest environmental challenge?
Finding cost-effective environmental solutions for the use of coal. This is a great challenge
not only for TransAlta but for our electricity industry and our economy, since coal provides
more than half of the electricity needed by consumers in North America.
At this point, there’s no cost-effective, long-term alternative to the use of coal. So, we
need to find a solution. Finding this solution is not going to happen overnight — it’s going
to take time. As an industry, we’re working hard to deal with this issue. And TransAlta has
been at the forefront of this effort.
In the short-term, TransAlta is investing in advanced generation technology that provides
operating and environmental efficiencies (our new Genesee 3 plant, which we own along
with EPCOR, uses the best available coal generation technology in Canada). Every time
we look at maintenance of our plants, we’re trying to add the best environmental
technology possible. We’re also growing renewables as a percentage of our energy
portfolio, as quickly as we can. As a result, we’re now one of the largest owners of wind
power in Canada. And over the long term, we will continue to work with industry and
government partners to pursue the development of clean coal technology. With incentives,
this revolutionary technology could virtually eliminate all air emissions, including
greenhouse gases, from coal-fired power generation in 20 to 30 years. The environmental
ramifications of this work are vast.
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Another issue that remains challenging for our company and our industry is mercury,
which is present in coal in small amounts. Our challenge as an industry is to find and
remove these very small amounts cost-effectively and reliably. So far, there are no clear
cut technological solutions. It’s a challenge we’re working hard to address by supporting
research into technologies to measure and control these emissions. Our hope is that any
timetable that is set by government will give us enough time to ensure the proper
technology is developed.
As CEO, what’s your role in promoting sustainability?
As CEO, I try to set the right tone, the right emphasis — by reminding people where we
are doing things right, and where we need to improve. It’s my job to make sure there is the
proper awareness of sustainability issues, starting at the Board of Directors and on down
through the organization. And we do that in different ways. Each year our Board has a
major strategic review session, which examines corporate strategy and direction including
sustainability issues. I also prepare a weekly email update to all employees that
summarizes how our company is performing on different issues. In that newsletter, I
frequently discuss our commitments to sustainability.
Outside our company, we’re also getting out our sustainability messages to our
stakeholders and the public. That’s something that I strongly believe in and encourage as
a CEO. As a company, we share information on our sustainability activities and issues,
through a variety of communication vehicles, including our website, our annual
sustainability report, investor tours and regular meetings with government and regulatory
bodies.
How are shareholders responding to TransAlta’s sustainability approach?
From our shareholder meetings and correspondence, we know our shareholders have an
increased interest in the issue of sustainability at TransAlta. Their message to TransAlta is
a simple and challenging one: “We want you to be socially responsible. We want you to
reduce your environmental footprint. But do it as cost-effectively as you can.”
And that’s what we’re working hard to do. A good example is our approach on climate
change. For the last 10 years, TransAlta has been carefully building a climate change
strategy that has allowed us to understand what the least cost options available to us are,
and how to prudently take action. As a result, we believe our company has a balanced,
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comprehensive climate change strategy in place, and is well positioned to address this
issue over the long term, despite the changing policy environment.
Is there more to be done in terms of promoting sustainability at TransAlta?
There’s always more to be done. For us, the big challenge is to find the resources to carry
out our sustainability programs and initiatives in a time of market uncertainty, price
constraints and escalating fuel costs, such as we’re experiencing today in our electricity
industry. We have to carefully consider where we are going to put our resources, how
much we put in, how we execute our plans, to always make sure we get the very best
results for the dollars spent — to the benefit of our company, our stakeholders and the
environment. Because in the end, pursuing long-term sustainability is not just a business
proposition — it’s an effectiveness issue.
Corporate Highlights
2004 2003 2002
Environmental
Gross greenhouse gas emission intensity (kg CO2E/MWh) 895 927 964
Sulphur dioxide emission intensity (kg/MWh) 1.25 1.26 1.71
Mercury emission intensity (g/MWh) 0.0129 0.0147 0.0181
Water consumption intensity in fossil fuel plants (m3 water/MWh) 1.95 2.11 2.41
By-product use (% coal ash sold) 51 30 30
Land reclamation (% mined land reclaimed) 36 38 37
Economic
Net earnings ($ millions) 170.2 234.2 199.6
Net earnings per share ($) 0.88 1.26 1.17
Cash flow from operating activities ($ millions) 613.4 526.9 398.6
Production (GWh) 54,560 53,134 46,877
Social
Recordable injury frequency (employee medical aid and lost-time injuries/200,000 hours worked)
1.69 1.47 1.60
Community investment ($ millions in corporate donations and sponsorships)
3.0 5.0 5.2
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Our Outlook and Focus
Environmental Performance
Profile Industry Outlook Our Focus
Fuel mix of coal (58%), natural gas (29%) and hydro and renewables (13%)
21.9 million tonnes of coal mined
122.1 million gigajoules (GJ) of gas consumed
Significant emitter of carbon dioxide
Large regional emitter of sulphur dioxide, nitrogen oxides and mercury
Environmental pressures continue to drive industry focus toward natural gas, renewables and clean coal technology
With Kyoto implementation deadline in 2008, industry faces carbon-constrained business environment
Mercury emissions from coal-fired generation pose scientific and environmental challenges for industry
Greater demand from stakeholders for corporate accountability for environmental and social performance
Reduce exposure to energy input prices and climate change risks by continuing to diversify our fuel mix
Grow our renewable capacity to 10% of our portfolio by 2010, with a short-term focus on wind power
Partner with other utilities to develop clean coal technology, which has the potential to eliminate all emissions from coal-fired electricity
Partner with other utilities to support development and testing of mercury emission control technologies
Continue to be a leader in the use of market-based approaches such as emissions trading to meet greenhouse gas goals
Economic Performance
Profile Industry Outlook Our Focus
8,337 MW of capacity
54,560 gigawatt hours produced at average plant availability of 89%
$1 per share dividend
Cash flow to debt ratio: 18.5%
Regional economic benefits in Alberta, Ontario, Mexico, Washington state, and Western Australia
Current conditions continue to favour low-cost producers with strong balance sheets
Industry-wide focus on improving financial strength by reducing debt
Prudent fiscal management continues to be critical in medium term and long term
Maximize cash flow from operating activities
Continue to concentrate on achieving operational excellence while integrating new capacity
Upgrade plants to improve economic performance and environmental impacts
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Social Performance
Profile Industry Outlook Our Focus
2,505 employees
Seven unions and 12 bargaining units in Canada, United States and Mexico
Injury frequency rate for employees and workers of 1.69 per 200,000 hours worked
$3 million in corporate donations and sponsorships
A million dollar plus contributor to United Way
Strong competition among corporations for highly qualified workers
Local stakeholders expect to be involved in business plans and activities that affect their communities
Increasingly stakeholders base their impressions of companies on environmental impacts, labour practices, business ethics and social contributions
Create work environment that attracts and retains the best available talent and skills
Set the highest standards (zero injuries) for ourselves on safety
Support our employees’ health and wellness needs
Develop long-term, mutually supportive relationships with key not-for-profit organizations
Encourage employees to be active contributors to their communities
Engage with stakeholders through open and regular two-way communication and consultation
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Governance and Management Systems
EHS training for new employees.
TransAlta sets rigorous standards for EH&S performance. These standards begin with
compliance with operating permits and all EH&S regulations. This section provides an
overview of those structures and systems, and our compliance record.
Policies The following policies set out our commitments to meet the electricity needs of our
customers in a safe, environmentally and socially responsible manner:
Our environment, health and safety policy guides TransAlta in meeting or surpassing industry standards and government regulations for environment, health and safety (EH&S)
Our corporate code of conduct highlights our commitment to the highest standards of professional integrity and ethical business conduct
Our community investment policy provides guidance for corporate donations in communities where we operate
Our privacy policy governs the collection, use and disclosure of personal information by our company
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We continually review our policies to keep them current and to reflect best practices. In
2004, our environment and health and safety policies were updated and merged into one
policy. The new EH&S policy sets out strict accountabilities for managers and employees
for EH&S responsibilities and aligns with our integrated approach to managing EH&S risks
and opportunities.
TransAlta has developed EH&S performance standards that apply to all our sites and
guide the actions of our employees. In 2004, we updated standards to support our Target
Zero safety initiative, adding standards for site orientation (educating new employees and
contractors on job site safety risks and procedures), control of work (safely planning and
managing equipment maintenance work) and workplace inspections (inspecting worksites
for potential hazards).
Corporate Governance We have long been committed to good corporate governance and disclosure practices.
These practices promote independent, ethical and accurate corporate decision-making
and public disclosure. Strong corporate governance is essential to our long-term
sustainability and business success.
We continually evaluate and adapt our governance and disclosure practices to fully
comply with changing legal requirements. Our corporate governance practices are posted
on our website www.transalta.com, along with information on the mandates of our Board
committees.
Board of Directors The Board of Directors’ role is to govern TransAlta to ensure its shareholders and other
stakeholders, including employees, customers and the communities in which we work and
live, benefit from our activities.
TransAlta’s Board has 12 members, with John Ferguson, an independent director, serving
as chair. Our Board members focus on assessing strategy, management performance,
compensation plans, financial results, internal controls, risk profile and environmental
issues. They also ensure the company maintains a culture of the highest ethical and
professional standards. All members of the Board, except president and CEO Steve
Snyder, are independent of management.
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Board Committees Board committees are responsible for review and oversight of the company’s strategies
and practices. These include the Audit and Environment Committee, Human Resources
Committee and Nominating and Corporate Governance Committee. All members of the
Board committees are independent.
The Audit and Environment Committee’s role is to review performance, assess financial
risks and environmental risks and identify emerging regulations affecting our company’s
activities. Committee members receive quarterly reports, covering our EH&S performance,
audit findings and emerging issues and trends. This committee met four times in 2004.
Governance Practices During the past year, we continued to support strong corporate governance practices
through our reporting framework, which ensures our Board has timely and detailed
information on key risks to our business.
At its annual two-day strategic planning session, the Board discusses environmental risks
and opportunities, as part of a detailed review of our assets. In 2004, special attention was
focused on climate change and mercury emissions from our coal plants, two areas where
our company faces significant environmental challenges.
LEADERSHIP FROM TARGET ZERO IM PLEM ENTATION TEAM
Since 2003, an implementation team,
consisting of directors and senior plant
managers from across the company,
has coordinated Target Zero, a long-
term initiative to reduce our safety
incidents to zero. Chaired by the
director of EH&S, the Target Zero
Implementation Team provides further
leadership on EH&S issues. Every
month this team meets to discuss
EH&S risks, share best practices and
make decisions on measures designed
to improve EH&S performance.
In 2004, the team endorsed new
EH&S standards and helped to ensure
Organization Our approach to delivering EH&S services in our
organization is central coordination but local
delivery.
We have restructured EH&S staff responsibilities
to provide a regional focus throughout our
operations. EH&S staff are located at Centralia,
the coal plants in Alberta, and our gas plants at
Sarnia, Ontario, and Fort McMurray, Alberta.
These employees have responsibility for delivering
EH&S services to help operations meet EH&S
performance objectives.
Additional support to our business operations is
provided by our Calgary-based EH&S staff, who
provide expertise on safety and environmental
matters, such as permitting, auditing and
implementation of our management systems. Our
Sustainable Development department, also in
Calgary, works closely with EH&S staff to
contribute to government policy development and
to promote consistent sustainability practices and
strategies company-wide.
cutive vice-president, Legal,
Ken Stickland, exeTransAlta 17
they were implemented in our
operations. They also endorsed an
ambitious campaign to address the
increasing occurrence of
musculoskeletal injuries (sprains and
strains) in our workplace.
oversees the delivery of EH&S services. Reporting
to Mr. Stickland is Dr. Bob Page, vice-president,
Sustainable Development; Mike Kelly, director,
Environment, Health and Safety (EH&S); and Don
Wharton, director, Sustainable Development.
Management Systems TransAlta’s integrated EH&S management systems consist of formal, documented
processes for managing environmental risks, and ensuring high standards for employee
safety at our facilities. They provide the framework for all our sites to meet our EH&S legal
obligations and corporate standards, and to promote continuous improvement.
During the year, we applied our integrated management systems to our Vision Quest wind
power division.
Operating effective management systems in our business requires that our workers
clearly understand their EH&S roles and responsibilities. In 2004, we carried out
awareness training at our Alberta coal plants. More than 600 employees, including
operators, maintenance staff and administrative employees, took part in the two-hour
sessions.
FIND OUT M ORE
Our Framework for Managing EH&S
We use a common framework for managing EH&S and apply two internationally
recognized standards: ISO 14001 (environmental management systems) and OHSAS
18001 (occupational health and safety management systems). Central to these
management systems is a five-stage process for setting policy, planning,
implementing, checking progress and taking corrective action, and undertaking senior
level review.
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FIND OUT M ORE
Our Approach to Internal EH&S Audits
Our audits are carried out primarily by internal teams of EH&S professionals and
employees trained in audit techniques. After completing each audit, the audit team
meets with the facility’s management to discuss the results and any significant areas
of concern. Management then prepares a corrective action plan within one month.
s are entered into a database that tracks progress toward correction.
EH&S Audits Audits of our facilities provide assurance that our EH&S systems, policies and standards
are being carried out company-wide, and that we are meeting applicable EH&S legal
requirements.
We conduct two types of audits: compliance audits carried out at each facility every three years to assess our
performance against EH&S regulations, permits and operating approvals
management system audits that assess our management systems each year against ISO 14001 and OHSAS 18001 standards and other corporate requirements
In 2004, we conducted six compliance and 18 management system audits. These covered
18 sites, including our Australian power plants, our Alberta coal plants, our Vision Quest
wind farms and our Centralia coal plant and mine.
We also developed a database tool to analyze past audit findings. This tool will help us to
better understand recurring issues at specific plants, and strengthen and focus our audit
activities.
The audit finding
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Our target is to correct audit findings within four months. Audit findings that are not
corrected within this period are reported to the Board’s Audit and Environment
Committee on a quarterly basis.
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Regulatory Compliance Our ultimate goal is to have no EH&S regulatory
contraventions or enforcement actions. When regulatory
contraventions do occur, we investigate and take
corrective actions to prevent recurrence.
In 2004, there were 48 environmental contraventions
across the company, 22 more than in the previous year.
These included five spills to land. The most significant
was the release of 900 litres (200 gallons) of oil into a
coal seam from a leaking hydraulic cylinder at our
Highvale mine. The oil was contained in the coal seam
and reclaimed.
We are concerned about the increase in contraventions
and are taking steps to promote preventive measures.
In late 2004, we developed a new database tool to track
investigations of EH&S incidents in terms of
completeness, recommendations and follow-up actions.
This tool will enable us to better capture information
related to EH&S incidents, share learnings among
employees, and track performance trends.
We continued to improve our record for health and safety enforcement actions. In 2004,
we reported six enforcement actions, or 12 fewer actions than in the previous year. We
remain optimistic that our continued emphasis on near miss and hazard reporting and
other fundamental safety practices will further improve our performance, which is already
highly rated for companies in our industry.
Fines and penalties Our goal is to achieve full EH&S compliance with no fines or penalties. We did not achieve
this in 2004 as we received EH&S fines amounting to $60,000, compared with $3,700 in
2003.
During the year, we agreed to pay a $50,000 penalty resulting from a 2002 charge under
the Alberta Occupational Health and Safety Act. The charge was for failing to install an
In 2004, TransAlta’s environment-related capital investments and operating investments totalled $13.1 million, compared with $15.1 million in 2003. These investments included costs for land reclamation, environmental monitoring and pollution abatement activities.
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alarm system to give effective warning of moving machinery in connection with an Aug.
13, 2002 incident at the Keephills plant where a contract worker was injured on a
conveyer. Our company was fined $25,000 and agreed to make a $25,000 donation to the
Parkland Ambulance Authority, a local emergency response agency.
COM PLIANCE SUM M ARY
2000 2001 2002 2003 2004
Environmental contraventions (#) 56 48 37 26 48
Environmental enforcement actions (#) 2 4 7 8 10
Environmental fines ($ thousands) 3.9 0 76.3 2.2 10.0
Health and safety incidents (#) n/a 71 79 57 88
Health and safety enforcement actions (#) 1 1 43 18 6
Health and safety fines ($ thousands) 0 0 0 1.5 50.1
n/a = not available Environmental contraventions include events that contravene our company’s permit conditions or environmental regulations. Environmental enforcement actions are contraventions that result in fines, orders or citations. Health and safety incidents include employee and contractor incidents resulting in medical aid and lost-time injuries. Health and safety enforcement actions include employee and contractor incidents that contravene health and safety regulations and result in fines, orders or citations.
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Environmental Performance
Treated water discharge into Wabamun Lake from the water treatment plant.
We aim to reduce the impact of our activities on the environment, wherever possible, by
reducing emissions and wastes, protecting wildlife habitat and using natural resources
responsibly. This section describes our key successes and challenges in improving our
environmental performance during the year
Greenhouse Gases (GHGs)
Performance Carbon dioxide emissions from the burning of fossil fuels at our power plants are the main
source of TransAlta’s greenhouse gas (GHG) emissions.
The metrics we use are gross emissions measured in tonnes of carbon dioxide (CO2)
equivalent and emission intensity (kilograms of CO2 equivalent per megawatt hour). Gross
emissions measure our total GHG emissions impact on the global atmosphere. Emission
intensity measures TransAlta’s environmental efficiency in terms of the product we
generate, and enables us to compare our performance with peer companies in Canada
and internationally.
Our facilities released 42.6 million tonnes of gross GHG emissions, compared with 41.9
million tonnes. This slight increase shows the impact of additional generation from our gas
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plants in Sarnia, Ontario, and Campeche and Chihuahua, Mexico. During the year, we
also maintained high production levels from our coal plants to meet consumer demand,
contributing to a higher GHG emissions profile.
GHG emission intensity improves 3% In 2004, our GHG emission intensity improved three per cent due to increased power
generation from less carbon-intensive fuel sources such as wind and gas. Since 1990, we
have cut the emission intensity of our worldwide operations by more than 10 per cent
while raising generation capacity by more than 82 per cent.
Strategic approach to climate change World governments have increasingly singled out GHG emissions as a priority. Although
the scientific evidence remains controversial, the concern is that GHG emissions,
particularly carbon dioxide, are contributors to global warming.
The nature of TransAlta’s business means that climate change will have a significant
impact on our business. We burn nearly 21 million tonnes of coal in our operations each
year. We burn coal because it’s abundant and, therefore, an economical way to produce
electricity. We also contribute about four per cent of the total GHG emissions in Canada.
In 2004, TransAlta’s gross emissions were 42.6 million tonnes of CO2 equivalent.
Since 1990, we have cut the emission intensity of our worldwide operations by more than 10 per cent while raising generation capacity by more than 82 per cent.
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Our challenge is to economically and efficiently meet consumer demand for reliable, low
cost energy while continuing to find new and innovative ways to reduce GHG emissions.
TransAlta believes that there is a risk of global climate change, and recognizes, with the
Kyoto Protocol coming into force, that society is moving toward a more carbon-
constrained world. We have established a strategic approach to managing our company’s
GHG risks. This approach includes:
increasing internal efficiencies
diversifying TransAlta’s fuel mix to include renewables such as wind and geothermal energy
promoting sustainable technologies for coal
acquiring GHG offsets (emission reductions produced by projects outside TransAlta and supported by our company through commercial purchase contracts)
contributing input to climate change policy
Increasing internal efficiencies Efficient energy use is a company-wide priority for
TransAlta. By focusing on energy efficiency in our
fossil fuel plants, we identify opportunities to
produce more electricity for each unit of energy
consumed. This activity improves our emission
intensity. One of the ways we measure these
improvements is through production efficiency —
the amount of electricity we produce for each unit
of energy consumed. This rate is influenced by
many factors, such as fuel type, equipment
efficiencies, combustion characteristics of the fuel
mix and the operating patterns of generation units.
We are always on the lookout for new ways to
improve our energy use, but we pay particular
attention to this objective whenever we plan major
maintenance operations and equipment
replacements.
Over the last five years, we improved production efficiency by eight per cent by 104 kilowatt hours per unit of energy consumed to 112 kilowatt hours through greater use of energy efficient cogeneration.
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Diversifying fuel mix A variety of power plants, using coal, natural gas, hydro and wind, means we do not rely
on one source of fuel. This approach, called fuel diversification, improves the reliability
and security of our electricity supply. Also, the more energy that we can put into the grid
that comes from less carbon-intensive sources, the less GHGs we emit per unit of
production.
Our company is committed to achieving long-term fuel diversification — that is, to achieve
one third coal, one third gas and one third hydro and renewables.
The portion of our fuel mix that comes from natural gas and renewable energy sources is
growing steadily. Last year, we had the first full year of operation from our gas plants in
Campeche and Chihuahua, Mexico. We also commissioned the Summerview wind farm, a
68-MW wind project near Pincher Creek, Alberta.
In 2004, the percentage contribution from coal plants to our fuel mix increased only
slightly, from 57 per cent in 2003 to 58 per cent. This contribution is expected to decrease
in the future, with the continued decommissioning of the Wabamun plant, our oldest coal
plant. In late 2004, we shut down Wabamun units 1 and 2, which together produced 119
MW of power. These closures will result in a projected yearly reduction of 1.2 million
tonnes of CO2 equivalent and are part of our long-term plan, prompted by economic and
environmental factors, to phase out all four units of the 537-MW coal plant. A 139-MW
unit was retired in 2002. The remaining unit, which produces 279-MW of power, will
operate until 2010 when its licence expires.
The above graphs show a breakdown of our company’s generating capacity in operation by fuel source from 2002 to 2004. In 2004, coal continued to be the major type of energy fuel consumed, accounting for about 58 per cent of TransAlta’s generation capacity, with natural gas the next highest consumed fuel at 29 per cent. Renewable energy sources such as hydropower and wind provide the rest of our capacity.
TransAlta 26
Promoting sustainable technologies for coal We take the view that coal will continue as an important fuel source for many years, and,
therefore, have invested considerable time and dollars in exploring new technologies that
will use coal in an environmentally sustainable manner.
TransAlta is a founding member of the Canadian Clean Power Coalition, an association of
Canadian utilities and coal producers, the U.S. Electric Power Research Institute and the
International Energy Agency Clean Coal Centre. The Coalition seeks to demonstrate
clean coal-based electricity generation and believes this can be achieved through coal
gasification, which turns coal into natural gas and captures by-products that otherwise
would be released as pollutants.
Since 2001, engineering and feasibility studies have been under way for the construction
of a clean coal demonstration plant in Western Canada by 2012. In 2004, the Coalition
evaluated technology options for the plant, and will select a gasification technology in
early 2005. As a next step, the group plans to complete a detailed business case in late
2005 to determine the appropriate site, fuel choices and end products for the plant.
We continue to evaluate opportunities to store and use CO2, a by-product of coal
combustion. In the future, coal power plants could feasibly pipe CO2 for injection in
oilfields for enhanced oil recovery. With the growing number of maturing oilfields in
Alberta, pumping and storing CO2 underground offers potential opportunities to create
added economic value while providing an innovative solution to GHG emissions.
TransAlta is a funding partner, along with industry and government, of the Weyburn CO2
Monitoring Project, an international research project studying the effectiveness of storing
CO2 in underground geological structures. The four-year, $40-million research project is
being carried out near Weyburn, Saskatchewan, using EnCana’s CO2 enhanced oil
recovery project as a field laboratory. We are monitoring this project to better understand
the science and business opportunities of CO2 capture and storage.
FIND OUT M ORE
Why Coal Gasification?
Coal gasification is the conversion of coal into a
gaseous product which has useable levels of
hydrogen and carbon monoxide. To do the
conversion, coal is combined with oxygen and
water under extreme conditions of pressure (1000 psig or more) and temperature (2600
degrees Fahrenheit). The resulting chemical reaction produces carbon monoxide and
hydrogen that can then be used as a fuel for electricity generation or in various chemical
processes. The benefit for electricity generators is that this process produces less CO2
emissions than if coal is used directly as a fuel. It also provides more efficient and
economic capture of CO2.
This gasification process involves three conversion steps (coal to gas, gas to heat, heat
to electricity), instead of two for conventional coal generation (coal to heat, heat to
electricity). As a result, coal gasification has historically been regarded as a more
expensive generation alternative.
But the business case for coal gasification is rapidly improving. Natural gas prices are up
substantially from historical levels, as supplies dwindle and demand for natural gas
continues to climb. This makes the economics of coal gasification more attractive. And
as greater demands and costs are put on electrical generators to reduce CO2 emissions,
coal gasification increasingly makes sense as part of a long-term strategic approach to
reducing GHG emissions.
TransAlta 27
Acquiring offsets Our portfolio of offset investments covers a variety of projects, including agricultural
emission reductions, energy efficiency, ruminant methane, and landfill and coal mine gas
to electricity.
In developing our offsets portfolio, we actively pursue opportunities for emissions trading,
a market-based approach that allows operators to buy and sell verified emission
reductions to meet GHG goals. We view the development of this innovative tool as
essential to enabling companies, such as ours, to meet their climate change commitments
more cost effectively.
In 2004, we became the first Canadian company to buy certified emission reductions
under the Clean Development Mechanism of the Kyoto Protocol. We signed a deal with
Agrosuper, a Chilean agricultural company, to buy 1.75 million tonnes of GHG reductions
over the next 10 years. This purchase is the environmental equivalent of eliminating the
GHG emissions of 62,000 cars or a 240-MW coal plant for one year.
FIND OUT M ORE
What is Emissions Trading?
A growing number of companies, like TransAlta,
are turning to emissions trading as an essential
strategic tool for managing their climate change
commitments.
Emissions trading typically occurs when a company,
e its emissions, purchases emission reduction credits from a company
Sundance Plant/Highvale Mine
seeking to reduc
TransAlta 28
that has reduced its emissions beyond its requirements to do so. This transaction can
benefit both participants. Purchasers are able to reach reduction goals more cost-
effectively than is possible through their own operational efficiencies. And sellers are
rewarded financially for their investments in reducing emissions.
The field of emissions trading is rapidly taking shape against a background of
international activity. The Kyoto Protocol has approved the Clean Development
Mechanism, which allows companies to acquire reductions in developing countries and
get credit for them. TransAlta’s recent emission reduction deal with Agrosuper was
carried out under the Protocol’s Clean Development Mechanism.
FIND OUT M ORE
Update on Kyoto Protocol
On February 16, 2005, the Kyoto Protocol
officially entered into force, creating renewed
impetus for the various signatories of the
Protocol, such as Canada, to implement
detailed action plans to meet their climate change obligations. Developing these
plans and taking action must be done quickly as the international community
approaches the 2008 to 2012 deadline for implementing Kyoto targets.
To date, the absence of a national GHG plan has created much uncertainty for our
industry. Answers to key questions such as by when and by how much Canadian
companies will have to reduce GHG emissions remain unclear.
Meanwhile, our company continues to take prudent and cost-efficient measures that
will prepare our business for a more carbon-constrained environment. We expect
emission reduction credits to play an essential role in Canada’s future carbon
reduction framework. We are also working on other strategies, including our
increasing use of renewable energy, making our current operations more efficient
and supporting the long-term development of clean coal technology, which promises
to virtually eliminate emissions. Through our long-term strategic approach, our
company continues to be well positioned to meet the climate change challenge.
TransAlta 29
CASE STUDY
TransAlta buys international GHG credits
In August 2004, TransAlta signed a deal to purchase
1.75 million tonnes of certified emission reduction
credits. The supplier of the credits is Chilean food
producer Agricola Super Limitada (Agrosuper), which has installed innovative
technology to reduce the GHG emissions of their industrial pork operations.
TransAlta plans to use the credits in the period from 2008 to 2012, as part of
Canada’s anticipated climate change program. The deal is a first for a Canadian
company under Kyoto’s Clean Development Mechanism program, whereby
companies in nations with emission reduction obligations can buy credits from
companies in the developing world that have created projects to cut their GHG
emissions.
“With emission trades such as the Agrosuper deal,
TransAlta is able to cost-effectively take action now to
reduce GHG emissions,” says Don Wharton, director,
Sustainable Development. “Emissions trading is one
of several tools we’ll need to meet the Kyoto challenge.”
CO2e.com LLC, a subsidiary of the New York financial
house Cantor Fitzgerald, brokered the deal. Independent
ductions will guarantee they meet
Steve Snyder, President and CEO
Signing of the emission trades deal between Agrosuper and
TransAlta
auditing of the reTransAlta 30
standards for accuracy and validity.
TransAlta 31
Contributing to climate change policy Alberta’s Clean Air Strategic Alliance (CASA) brings together government, industry and
non-government organizations to develop cooperative strategies to deal with air emissions
issues in the province. In 2003 and early 2004, TransAlta participated in the CASA
Electricity Project Team’s work on climate change, examining a management framework
to reduce GHG emissions from Alberta’s coal and gas plants. In 2004, the team
developed least-cost options, including emissions trading and reduction methodologies,
for reaching provincial GHG emission targets. These findings were accepted by the CASA
Board of Directors and presented to the Alberta government for review. This information
has been essential to supporting informed policy decisions as the Alberta and Canadian
governments decide on industry targets and actions.
Reporting and tracking emissions We have been estimating and reporting our GHG emissions since 1995, and regularly
review our reporting practices against best practices, global standards and government
requirements. By applying the latest and most rigorous standards, we continually improve
TransAlta’s GHG reporting systems and practices.
In 2004, we reported GHG emissions from our Alberta coal plants to Alberta Environment,
under a reporting program for large emitters (facilities emitting more than 100,000 tonnes
of CO2). We also reviewed our reporting methods against guidelines for a national GHG
reporting program for large industrial emitters, scheduled to start June 2005. Results of
our review show we are well positioned to meet the new national reporting requirements.
In November 2004, we commissioned CH2M HILL Canada to audit emission
methodologies we use to measure the GHG benefits of decommissioning units 1 and 2 of
our Wabamun coal plant. This report will be finished in early 2005. We plan to apply the
report’s findings to further improve GHG reporting practices at our different coal plants.
TransAlta 32
Renewable Energy There are many reasons why we continue to invest
in and grow TransAlta’s renewable energy portfolio.
Renewables offer strong investment opportunities.
They help to diversify our portfolio of energy
sources. And they contribute to the continued
reduction of our emission intensity.
TransAlta’s renewable energy portfolio includes 150
MW of wind energy operated by Vision Quest
Windelectric and 185 MW of geothermal energy in
California through a 50 per cent interest in CE
Generation LLC. Our renewable energy portfolio
represents four per cent of generation capacity
owned and operated by TransAlta, and our long-term
target is to increase this to 10 per cent.
Wind power Wind power is part of our answer to climate change
and represents significant opportunities for economic
growth and fuel diversification. Through Vision Quest, we are a leading developer of wind
power, operating nearly 50 per cent of Canada’s installed wind power capacity.
Vision Quest operates 220 wind turbine power plants in Alberta. Output from our facilities
is enough energy to supply more than 120,000 homes. Our wind facilities are EcoLogo™
certified under Environment Canada’s Environmental Choice Program, a designation
granted to green power sources that demonstrate environmental performance and meet,
or exceed, all government, industrial and performance standards.
New wind farm at Summerview In 2004, we added a fifth wind farm to our wind power business when we launched
commercial operation of the Summerview wind farm, near Pincher Creek in southern
Alberta. It has a capacity of 68 MW and represents the first phase of a 130-MW project.
The $100 million wind farm uses 39 turbines to produce enough power to light up over
28,000 homes.
Fred Gallagher, Vision Quest’s chief executive officer and managing director, was honoured in 2004 by the Canadian Wind Energy Association when he was presented with the association’s prestigious Individual Leadership Award. The award is given each year “in recognition of exceptional achievements in furthering the wind energy industry, and the development of wind energy technology in Canada.”
TransAlta 33
Exploring other wind markets Building on our successful track record in Alberta, we are interested in developing a
stronger foothold for our wind power business in other Canadian markets. In 2004, we
opened a Vision Quest office in Toronto. We are also working on two proposed wind
farms near Kincardine, Ontario. In 2004, land preparation, project evaluation and
equipment selection were completed for the projects, which will be able to produce up to
75 MW, once approved and built.
We have also procured wind resource properties in wind basins in Alberta, Saskatchewan,
Ontario and Nova Scotia. More than 20,000 hectares (50,000 acres) of land are under
lease, option or negotiation, holding the potential for more than 750 MW of future wind
energy development.
Expanding green tag sales Renewable energy facilities produce two distinct products. One is electricity. The other is
the “bundle” of environmental benefits that result from producing renewable energy.
Vision Quest sells the benefits of renewable energy from our wind turbines in the form of
“green tags,” a marketable product that businesses and individuals can use to offset the
environmental impacts of their electricity use. Selling this green energy product enables
Vision Quest to expand its market beyond the borders of the traditional electricity system.
In 2004, we completed several sales of green tags in the U.S. and across Canada. These
included a cross-border deal to supply green tags to Bonneville Environmental
Foundation, a Washington state non-profit organization dedicated to the development and
use of new renewable energy resources. We also signed a three-year agreement with the
Pembina Institute for Appropriate Development, an Alberta-based environmental
organization, to supply wind-generated green tags for sale to consumers across Canada.
TransAlta 34
Summerview Windfarm
Helping to power PCs by wind Vision Quest is working in partnership with
the Pembina Institute to offer the
environmental group’s Wind Power PCs
Program. Launched in late 2004, the PCs
Program aims to power some 20,000
computers by wind by 2005. The program
focuses on computers because the devices
are among the fastest-growing users of
electricity in Canada, with Canadians turning
on about 14 million computers each day.
Under the program, PC users buy green tags that “green” the electricity used by
computers and help grow wind energy. Pembina purchases the certificates from Vision
Quest and in turn sells them directly to the public on its website. Profits from certificate
sales will be used to help offset the costs of producing wind power, eventually enabling
Vision Quest to invest in new wind power projects across Canada.
Studying wind farm impacts on bats Bats occasionally collide with wind turbines, as they do with other tall structures. In 2004,
we completed several bat studies at our Vision Quest wind farm sites in Alberta and our
prospective sites in Ontario. The studies focused on how and when bats migrate, and the
impact of wind power sites on migratory patterns. Our studies will contribute to scientific
knowledge about bats and enable our company to continue to site our wind farms so as to
minimize wildlife impacts.
Geothermal TransAlta has a mix of geothermal assets — 164 MW comprised of 10 facilities — which
our company acquired in 2003 when we purchased a 50 per cent interest in CE
Generation LLC. MidAmerican is our partner and the manager and operator of the
geothermal power plants in the Imperial Valley region of southern California. These assets
are unique in our generation fleet, tapping heat from deep underground hot reservoirs,
between 900 and 2,100 metres (3,000 and 7,000 feet), to create steam that powers
turbines to produce electricity. Geothermal energy is considered renewable because it is
constantly replenished without fuel consumption.
TransAlta 35
Regional Air Quality We manage emissions from our coal and gas plants that can affect local air quality.
These include sulphur dioxide, nitrogen oxides, mercury emissions and particulate matter.
Sulphur dioxide (SO2) emissions The level of sulphur dioxide (SO2) emissions from our operations is largely a function of
coal-fired generation and depends on various factors, including the amount of fuel
consumed, fuel sulphur content and the use of emission control technologies. SO2, along
with nitrogen oxides, can contribute to acidification of the atmosphere and soils.
SO2 emissions up 3% In 2004, our company-wide SO2 emissions increased three per cent to 59,400 tonnes,
from 57,500 tonnes the previous year. Although we shut down one unit at Wabamun, we
continued to produce high levels of production from our coal plants. This resulted in our
company-wide SO2 emissions staying largely the same over the 2003 to 2004 period.
Our SO2 emission intensity, however, continued to improve, due mostly to SO2 scrubbers
(emission control equipment) and lower sulphur coal blends at our Centralia coal plant. At
year-end, we reported 1.26 kilograms of SO2 per megawatt hour, which was consistent
with our 2003 performance.
TransAlta 36
SO2 allowance trading Under the U.S. Acid Rain Program, utilities participate in a market-based allowance
trading system. The system allows utilities to adopt the most cost-effective strategies to
lower SO2 emissions at units in their power systems. Power companies that reduce their
emissions below the number of allowances they hold may sell them to other utilities on the
open market or bank them to cover emissions in future years.
Because of our flue gas desulphurization plant in Centralia, installed in 2002, we continue
to get significant SO2 reductions at the coal plant. This has enabled our company to sell
emission reduction allowances to other power companies under the program. In 2004, we
had our most successful year yet in the allowance market, selling 4,990 tonnes of
emission reduction allowances.
Photo centralia power plant
More than 95 per cent of SO2 emissions from our Centralia coal plant is scrubbed out of the flue gas and used to produce a marketable by-product. At year-end, Centralia’s SO2 emission rate was 81 per cent below the U.S. national average for coal plants.
Nitrogen oxide (NOx) emissions Our NOx emissions are mainly a function of the ratio of coal to gas-fired generation and
different operating factors (for example, the temperature at which fuel is burned, how
much time is required to burn the fuel and the amount of oxygen in the combustion flame).
Because natural gas is burned in a pressurized chamber, with minimal air and lower
temperatures than what is needed for coal, less NOx emissions are formed. The result: the
more gas-fuelled electricity we generate, the less NOx emissions we produce per unit of
electricity.
NOx emissions down slightly In 2004, we reported a slight decrease in NOx emissions, from 68,000 tonnes in 2003 to
66,400 tonnes. Similarly, our NOx emission intensity improved eight per cent to 1.42
kilograms per megawatt hour, from 1.50 kilograms the previous year. The main contributor
to this improvement was our growing use of low emission, gas-fired electricity generation.
TransAlta 37
Genesee 3 plant
Genesee 3 plant advances emission controls In March 2005, TransAlta and EPCOR began commercial operation of the Genesee 3
generation plant, west of Edmonton. The 450-MW facility is the most advanced coal
power plant ever built in Canada.
A joint venture between the two companies,
Genesee 3 is Canada’s first generation
facility to use a supercritical pressure
boiler. In a supercritical boiler higher
temperatures and steam pressures,
together with a high efficiency steam
turbine, create a more efficient process for
converting thermal energy into electricity.
The process uses less coal per megawatt
hour of electrical energy than conventional
processes, thereby reducing emissions.
The plant will produce half the NOx emissions of existing coal-fired generation, and will
prevent 99.8 per cent of fine particulate matter from reaching the atmosphere. It will also
cut SO2 emissions to 70 per cent below existing emissions.
TransAlta 38
The plant’s supercritical combustion and clean air technologies will reduce total CO2
emissions to 18 per cent below the average Alberta coal plant. GHG emissions will be
further offset down to the level of a natural gas combined cycle plant — a 52 per cent
reduction in emissions.
Monitoring impacts of coal plants In 2004, TransAlta and EPCOR launched regional ambient air quality monitoring
programs and regional bio-monitoring programs. These programs are designed to
determine if there are any long-term impacts on the environment from coal plants in the
Wabamun-Genesee area.
The air emission programs will gather information about power plant impacts related to
acid and mercury deposition and typical air pollutants such as SO2, NOx, ozone and
particulate matter. The monitoring is being carried out by the West Central Air Shed
Society, an environmental non-profit organization which is led by a multi-stakeholder
Board and ensures third-party validation of data. At year-end, four new state-of-the-art
ambient air monitoring stations were up and running and collecting valuable air quality
data in the region.
Particulate matter The burning of coal produces two types of particulate matter: fly ash (fine ash) and bottom
ash (coarse material that drops to the bottom of the boilers during combustion).
Particulate emissions up TransAlta controls these emissions through emission control equipment and operating
practices. Our electrostatic precipitators safely remove more than 99 per cent of the fly
ash from power plant stacks before it can be released into the atmosphere. In 2004, this
equipment enabled TransAlta to collect about 1.5 million tonnes of particulate matter.
About 5,660 tonnes, or 0.4 per cent of our particulate matter, were emitted from our plant
stacks in Alberta and Washington. This amount was about nine per cent above 2003
levels.
Starting in 2005, Wabamun unit 4 must meet new operating limits, required by the
regulator, that will reduce approval limits of particulate emissions by 50 per cent. For
several years, plant employees, working with an outside consultant, have reviewed new
technology and enhanced maintenance and operating practices to reduce particulate
TransAlta 39
emissions. Their recommendations, together with improvements in precipitator equipment,
have allowed the Wabamun unit to meet the new operating limits.
Mercury emissions Mercury occurs naturally in coal and a portion of it is released into the air when coal is
burned to fuel power plants. Mercury emissions are a concern because biological
processes convert some of the mercury into a toxic form that can enter soil, lakes, rivers
and streams and accumulate in fish tissue. Mercury can present a health risk to wildlife
and humans when there is exposure to high enough levels.
Mercury emissions down 13% In 2004, our company-wide mercury emissions were 610 kilograms, a 13 per cent
decrease from 2003 levels. This decrease was largely the result of the Wabamun unit 3
shutdown in 2002.
As a large point source emitter of mercury, we recognize the need to manage these
emissions and to contribute to science-based solutions. Addressing this issue, however,
presents significant scientific and environmental challenges for our company and our
industry. There remain uncertainties related to the transportation of mercury into the
environment. Also, there are no proven, commercially available mercury control
technologies for utility boilers.
TransAlta 40
In 2004, we continued to partner with other utilities and organizations to support the
development and testing of mercury control technology. Through the Canadian Electricity
Association (CEA) and U.S. Electric Power Research Institute (EPRI), we monitored
research from government and university laboratories. We also collaborated with other
power companies in the Canadian Clean Power Coalition to research new technologies to
control mercury and other emissions from coal-fired boilers.
Since 2002, we have been an active participant in the CEA’s mercury monitoring program,
a national initiative involving the sampling, analysis and reporting of coal and ash for
mercury content and testing for mercury in flue gas. In 2004, we tested and measured
mercury emissions levels from Sundance units 5 and 6. We are now reviewing the results
of our tests and evaluating methodologies to better estimate TransAlta’s mercury
emissions. These and other studies will provide critical information to help TransAlta find
cost-effective and efficient options for managing mercury emissions over the long term.
TransAlta 41
Land Use and Protection TransAlta affects land and wildlife through surface
mining of coal and the presence of our hydro
developments and wind farms.
Surface mining involves removing earth and rock
layers to extract coal. TransAlta owns the
Whitewood and Highvale surface coal mines near
Wabamun, Alberta, and a surface coal mine at
Centralia, Washington. These mines cover about
9,112 hectares (22,516 acres).
Our 13 hydro developments, which include plants,
reservoirs and canal systems, are in the foothills and
mountain areas of central and southern Alberta. Of
these, nine developments are in or close to
protected areas or national and provincial parks,
where we work closely with parks officials to
manage the environmental impacts of our
operations.
Our five wind farms consist of 220 turbines and directly occupy less than eight hectares
(20 acres), sharing the use of the land with agriculture and ranching in southwest Alberta.
Mine reclamation We fully incorporate land reclamation into our long-term plans for all our mines. Mine
activities are designed to prevent erosion, conserve topsoil, where possible, and restore
the area in a way that allows the previous land use to be continued. The reclamation
process is closely monitored and reported against regulations and our own standards.
Our programs to reclaim and improve mined land are adapted to local ecosystems and
stakeholders needs. At our mines around Wabamun Lake much of the reclaimed land is
used for agriculture and recreation, while at Centralia reclaimed land is used for
timberland and wetlands development.
The total footprint of land owned, leased or managed by TransAlta’s operations, including mining operations and building and plant buildings, is 20,190 hectares (49,870 acres).
TransAlta 42
Opening of Whitewood Conservation Properties
36% of land reclaimed There are 9,112 hectares (22,516 acres) of land at the Whitewood, Highvale and Centralia
mine sites. At the end of 2004, 36 per cent, or 3,256 hectares (8,046 acres), of this land
was reclaimed.
Creating wetlands at Centralia At Centralia, we finished the first phase of converting a former mining pit to a permanent
wetland. The shoreline surrounding the 33-hectare (81-acre) pit was contoured and topsoil
applied. We plan to replant the area with native vegetation in 2005. In converting the area
to a natural wetland ecosystem, we consulted with a leading environmental consultant to
determine the appropriate characteristics of the landscape.
During the year, we also submitted a revised mining and land reclamation plan for our
Centralia mine to the U.S. Office of Surface Mining. The new plan is designed to improve
operating efficiencies while reducing environmental risks. The plan’s recommendations
include improved storage of mine tailings and designing the post-mine landscape to
closely emulate natural conditions so as to reduce erosion and other environmental risks.
Parts of the plan, including tailings storage, have been approved by the regulator for
construction in 2005.
Whitewood Conservation Properties opened We partner with local conservation groups to
create lasting environmental legacies.
In 2004, we participated, along with the
Alberta Fish and Game Association, in the
official opening of the Wabamun Whitewood
Conservation Properties, at Wabamun,
Alberta.
The properties have been established for
wildlife and habitat conservation, education
and recreation, and include over 170
hectares (420 acres) of reclaimed land from
our Whitewood coal mine, and nearly 200
hectares (490 acres) of untouched native parkland. The area is home to white-tail deer,
TransAlta 43
mule deer, moose, elk, ruffed grouse, ducks, geese, woodpeckers and songbirds, as well
as a variety of fish in East Pit Lake.
Protecting habitat at Centralia In 2004, TransAlta purchased the Skookumchuck Dam. This dam and reservoir complex
supplies water to our power plant and mine operation at Centralia, Washington state. As
part of this purchase, we acquired a 380-hectare (960-acre) wildlife area downstream from
the dam. Working in cooperation with the state Department of Fish and Wildlife, we
manage this area, a mix of forests, meadows and wetlands, which provides protective
cover and nesting habitat for many species of wildlife, including deer, elk, waterfowl and
upland game birds.
TransAlta 44
CASE STUDY
Grazing management project at Highvale
In 2004, at our Highvale mine near Wabamun, our land reclamation team worked
closely with the Prairie Farm Rehabilitation Administration (PFRA) and a local
leaseholder beef producer to develop a rotational grazing project on an area of
mined land. Half of the 40-hectare (100-acre) site was left for cattle to continuously
graze. Another 20 hectares (50 acres) were divided into paddocks, and the cattle
rotated through the paddocks.
The four-year project will evaluate the impacts of conventional grazing versus
rotational grazing or managed grazing on reclaimed land. Through the project, the
participants expect to see higher levels of forage and beef production, greater grass
species diversity and an increase in levels of organic matter and soil moisture
retention on the managed grazing pastures.
Gavin Miller, supervisor, TransAlta’s Reclamation Centre at Keephills, says
TransAlta is participating in the project to help demonstrate the potential for high
yields on reclaimed land and to promote improved land use management techniques
throughout the agricultural industry.
First-year results are encouraging: a 10 per cent increase
in available forage in the managed grazing area has
led to a 15 per cent overall weight gain in yearling calves.
“Projects of this kind not only contribute to agricultural
knowledge, they also demonstrate successful land
reclamation in action,” says Miller.
Gavin Miller (far left) with leaseholder Kim Bamber (centre)
and Curtis Sneil of the Prairie Farm Rehabilitation
Administration
TransAlta 45
Waste We focus on waste reduction as a way to improve our processes, cut costs and manage
our environmental and safety risks.
Our non-hazardous waste includes:
fly ash, a fine dust-like substance produced from burning coal and collected by electrostatic precipitators
bottom ash, sand-like ash produced from burning coal and collected from the base of plant boilers
water treatment chemicals used at our Wabamun Lake water treatment plant
coal refuse from our coal washing facility at Centralia, Washington state
scrubber sludge, predominantly gypsum, from our flue gas desulphurization plant at Centralia
paper, tires, cardboard and building and construction material
In 2004, our operations generated 2.3 million tonnes of non-hazardous waste, of which 34
per cent was recycled or reused, and 66 per cent was sent to landfills or disposal facilities.
Typical hazardous waste in our operations consists of used hydrocarbon liquids and
vehicle antifreeze and waste oil. During the year, our operations generated 204 tonnes of
hazardous waste.
Marketing Waste By-Products
CASE STUDY
TransAlta and wallboard manufacturer develop win-win situation
At our coal plant in Centralia, Washington state, our
company has installed two flue gas desulphurization
(FGD) units that filter out more than 94 per cent of the sulphur dioxide (SO2), a
contributor to acid deposition. This equates to about 110,000 tons each year.
The FGD units mix flue gas with a water slurry containing limestone. The mixture
absorbs the sulphur and other trace amounts of impurities like mercury. The
emissions coming out of chamber are nearly sulphur-free and the FGD units, along
with other improvements, make the Centralia plant one of the cleanest coal plants in
the United States.
As a bonus, the scrubbing process results in tons of excess commercial grade
synthetic gypsum, which is highly desired by wallboard (drywall) manufacturers.
Normally, manufacturers have to sort, test and crush the gypsum to a uniform sand
size. However, with synthetic gypsum, the power plant does all this, producing a
consistently high quality substance. The gypsum is so highly sought after that
regional wallboard manufacturers compete for the TransAlta contract.
In 1999, GP Gypsum of Tacoma, Washington state was awarded a 20-year contract.
FGD unit at Centralia
TransAlta 46
With its primary source for natural gypsum in Mexico starting to run out, the company
needed a more reliable source. Securing the contract, the company invested $7.5
million to handle the synthetic gypsum. Now the plant uses 35 truckloads of the
synthetic product a day.
In 2004, the Association of Washington Business awarded TransAlta and GP
Gypsum its Environmental Excellence Award for their combined projects.
TransAlta 47
At TransAlta, we seek innovative market opportunities where we can conserve the
resources we use and benefit the company’s financial bottom line by creating new
revenues and avoiding the costs of disposal in our mines.
In 2004, we continued to develop commercial markets for the major by-products of our
fossil fuel generation: coal fly ash, coal bottom ash and gypsum. Fly ash is used in
manufacturing cement and concrete. Bottom ash is used as granular fill in roadbeds, and
gypsum from our flue gas desulphurization plant at Centralia is used for the manufacture
of wallboard. At the Whitewood mine, we also mine through gravel deposits, which we
collect and sell for use in road construction.
In 2004, we sold almost 1.3 million tonnes, or 51 per cent, of our by-products. Sales of fly
ash and bottom ash from our coal plants to cement and concrete manufacturers in Alberta
and the western United States reached 768,000 tonnes, slightly lower than our 2003 sales
of 783,000 tonnes. We also achieved our most successful year yet for the sale of gypsum
from our Centralia power plant. By year-end, gypsum sales totalled 416,000 tonnes, about
156,000 more tonnes, or 60 per cent, than the previous year.
In 2004, we sold 51 per cent of waste by-products, or 1.3 million tonnes, that would otherwise have been sent to landfills or stored at our mines. The percentage of waste by-products sold has increased from 27 per cent in 2000.
TransAlta 48
CASE STUDY
New team expands by-product business
TransAlta is achieving record revenues from the sale of
waste by-products from coal plant operations. And working
behind the scenes to deliver this success is a cross-
functional team of employees from Alberta and Centralia,
Washington state, dedicated to exploring by-product
markets and sales.
“Our team’s goal is to improve overall profitability by bringing increased focus to by-
product sales in our business,” says Tony Smith, manager, Mine Operations. “It’s an
exciting area of growth — and one that is becoming more significant to our business.”
In 2004, the team created a new reporting and management process to more clearly
identify the costs, revenues and opportunities of by-product sales. The team also found
new markets and developed new sales agreements for waste by-products like bottom
ash.
In 2004, the team oversaw the sale of 200,000 tonnes of bottom ash from our Alberta
power plants for use in construction of a large road project in Edmonton. Smith says the
unique thermal qualities of bottom ash, which helps road beds withstand tough freezing
and thawing cycles, makes this commodity a valuable material for road construction,
especially in northern areas. “We’re anticipating a continued increase in the consumption
of bottom ash,” says Smith.
The team also developed a business case to expand the sale of fly ash, another by-
product of coal combustion, used to replace cement in concrete manufacturing. Based on
this work, the company plans to invest $4 million in 2005 in a new classifier machine,
used to process ash before it is shipped to market. Smith predicts the new equipment, to
be installed at the Sundance coal plant near Wabamun, Alberta, will help TransAlta to
double its fly ash sales in five years.
A key to this investment and the associated growth opportunities is the quality control
associated with processing and shipping Sundance fly ash. "Sundance fly ash is
recognized for its excellent properties, and the consistent, high quality control
associated with processing the fly ash. It is considered a premium fly ash within
Luong Du (left), Ron Lehay, Tony Smith and others helped
to expand TransAlta’s by-product business
TransAlta 49
CASE STUDY …continued
North America and is in great demand by the concrete industry," says Ron Lehay, Production
Area Coordinator at Sundance. "Luong Du and his team at the ash farm have made the
Sundance fly ash a valuable commodity."
Looking forward, the team is anticipating the first sales of another by-product — cenospheres,
which are found in large quantities in fly ash at TransAlta’s Keephills coal plant. The small
hollow spherical particles can be used to improve the manufacture of drilling muds and down
hole cement used in the oil and gas business. In 2004, the company signed a one-year
agreement to supply the product for marketing, primarily to Alberta’s oil patch.
TransAlta 50
Water Resources
Water management in our fossil fuel plants Our coal-fired and gas-fired plants draw water directly from lakes and rivers, such as the
St. Clair River in Ontario, the Skookumchuck River in Washington, and Wabamun Lake
and the North Saskatchewan River in Alberta. As well, some gas-fired plants draw water
from deep wells and municipal water systems.
Our plants process water in different ways. In our coal-fired plants, purified water is either
returned to its source under regulated temperatures (Wabamun) or recirculated through
cooling ponds (Keephills and Sundance). In our gas-fired plants, most of the water is
recirculated in operations, keeping discharge volumes low. Wherever possible, we look for
opportunities to minimize our water consumption through advanced plant design.
Our statistics for water consumption show the difference between our water intake and discharge. In 2004, our coal and gas plants used about 92.4 million cubic metres (3,263 million cubic feet) of water, compared with 99.2 million cubic metres (3,503 million cubic feet) in 2003. This decrease was due mainly to the shutdown of our Wabamun unit 3 at the end of 2002. Similarly, our water consumption intensity (cubic metres of water consumed per megawatt hour) improved nearly 11 per cent over the previous year.
TransAlta 51
Managing water discharge In our coal and gas plants, we discharge primarily cooling water. At our Wabamun coal
plant, we also use some water to transport ash through a series of settling ponds as part
of an ash treatment system. Once the ash settles out, the water is returned to the lake.
Before discharge, the water is monitored to ensure it meets environmental standards.
Water treatment plant exceeds requirements TransAlta’s operations are one of many factors that affect the water level of Wabamun
Lake. Warm water from the Wabamun plant causes some evaporation, the Highvale mine
diverts surface water as part of its operations and the Sundance plant uses water for
boiler makeup and domestic purposes. Our company’s average impact on the lake level is
about 11.5 million cubic metres or 11.4 centimetres (4.5 inches) each year. Other impacts
to the lake include precipitation, surface run-off, ground water flows and natural
evaporation.
In 1997, we built the Wabamun Lake water treatment plant to mitigate our operations’ past
and ongoing impacts on lake levels. In response to requests from our neighbours, we
expanded our output of water with the construction of an additional plant, which began
operating in May 2002. The facility treats water from the Sundance plant’s cooling pond
and pumps high purity water to the lake. Water taken from the cooling pond is replaced by
water from the North Saskatchewan River. Water released into the lake is designed to
meet stringent government guidelines to protect the ecology of the lake.
TransAlta plans to repay 20 million cubic metres per year from 2004 to 2006 and another
8 million in 2007. In 2004, we continued to make progress against our annual commitment
to repay our historic debt to the lake. At year-end, the water treatment plant returned over
21 million cubic metres of water to the lake, exceeding our commitment for the second
year in a row.
TransAlta 52
At the end of 2004, the Wabamun Lake water treatment plant’s cumulative water production was 44.3 million cubic metres, about 10 per cent better than the license requirement.
CASE STUDY
Long-term plan for water treatment plant
Our company plans to continue to operate the Wabamun
water treatment plant after we have repaid our historic
debt requirements at Wabumun Lake, Alberta. We have
developed an operational plan detailing how the facility
will operate after that milestone is reached.
“We’re making good progress against the water debt and are on target to repay it by
July 2007,” says Ken Omotani, senior environmental engineer at TransAlta. “With
this in mind, we’ve now begun to look closely at what makes the most sense in terms
of offsetting our annual operating impact on the lake.”
In 2004, Omotani worked with a TransAlta team and an engineering consultant to
develop four different operating scenarios, which will enable our company to offset its
annual impacts and meet regulatory requirements. These were discussed with
Alberta Environment, Wabamun Watch and other community groups.
Omotani says, based on the consultation, TransAlta is now focusing on a proposed
option that will result in an annual pumping rate, calculated each year based on the
previous five years’ operational impacts.
“Our stakeholders thought this particular option was reasonable and made the most
it puts the most water back into the lake, and the constant pumping
Ken Omotani, senior environmental engineer at
TransAlta
sense, because
TransAlta 53
rate tends to mimic the natural ebb and flow of the lake more closely than the other
options. Plus, it’s the easiest one to manage, because we know exactly how much
water we need to pump back into the lake each year and can plan maintenance in
advance.”
After further consultation with stakeholders on the proposed option, TransAlta will
submit the final long-term operational plan for the water treatment plant to Alberta
Environment for approval later in 2005. Omotani says the company will recommend
that the operational plan be reviewed every five years.
TransAlta 54
Scientific review of Wabamun Lake released TransAlta continued to work with government and local stakeholders to evaluate potential
environmental and health impacts from our Wabamun power plant and other local
activities on the watershed. These studies have been under way since 2001 when
complaints were first raised about murky water in Wabamun Lake near our Wabamun
plant’s ash lagoon.
In early 2004, we completed a detailed risk assessment report to determine the
contributions of the power plant to trace metal concentrations and the risk to people and
the lake’s ecosystem. Our findings show no additional health risks to people, wildlife or
aquatic life.
In 2004, a task force of Alberta scientists, under the direction of Dr. David Schindler, a
University of Alberta ecology professor, reviewed all available information on water quality
in Wabamun Lake, including TransAlta’s report, to find out if further studies were needed.
Their review covered various impacts to the health of the lake, including TransAlta’s
operations.
In early 2005, the scientific team concluded that the lake is in “moderately good condition,”
despite recreational activity and industrial use. Their study also confirmed that TransAlta
employees have applied good environmental management practices for many years.
Alberta Environment will study their report before deciding on the recommendations.
Fish management system at Wabamun During spawning seasons, fish sometimes come into contact and are injured by our intake
screens at the Wabamun coal plant. Fish species at greatest risk are pike during the
spring and whitefish during the fall.
We have put in place a comprehensive fish management system to minimize the risk of
fish injuries at the site. Our program consists of specially designed screens, fish return
systems, acoustical and strobe lighting deterrents and staffing the plant screen house 24
hours a day, seven days a week, during high risk periods, with employees trained by
fisheries biologists. Wherever possible, we plan plant outages to coincide with spawning
times, thereby reducing water flow near the screens and lowering risks to fish.
Since installing the system in 2002, we have significantly lowered the number of fish
entering our intake screens and now report very few fish mortalities.
TransAlta 55
Essential fish habitat evaluations Whenever we develop growth plans for our plant and mine operations, we conduct
extensive assessments to understand the potential effects of our proposed activities to
water bodies and sensitive environmental areas. Essential fish habitat evaluations are
required of many projects that affect streams and wetlands.
In 2004, as part of our revised mining and land reclamation plan for our Centralia mine,
we carried out essential fish habitat evaluations. These identified the temporary loss of
some streams and wetlands as a result of our proposed plans to expand the mine. To
offset these impacts, we developed plans for fish alcoves (backwater areas) along a creek
on our property to create new fish rearing areas for coho salmon. We also are developing
plans to restore a section of the Big Hanaford Creek, long ago drained by agricultural
activities, to its natural stream channels, thereby enhancing wetlands and habitat for coho
salmon.
Water use in our hydro system Our hydro operations are part of Alberta’s North Saskatchewan and Bow River systems
and are “non-consumptive” users of water resources. In other words, they divert or store
water to generate electricity, later discharging it back to its natural source, with little loss of
water to downstream users. Plus, by managing reservoirs to meet the needs of our hydro
developments, we maintain consistent water flow through the spring and winter seasons
for downstream users in Edmonton, Calgary and southern Alberta.
TransAlta appointed to water council We believe that an ecosystem approach, combined with a collaborative process, is the
best way to find a balance between human activities and watershed integrity. We support
this approach by participating on various watershed planning and advisory councils in
Alberta.
In 2004, TransAlta was appointed to Alberta’s Water Advisory Council, a multi-stakeholder
group with representatives from government, industry and non-government organizations.
The council will report on the implementation of Alberta’s water strategy, released in late
2003, and make recommendations to the government, stakeholders and the public on
water issues affecting the province. Mike Kelly, TransAlta’s director, EH&S, represents our
company on the 24-member committee.
TransAlta 56
During the year, we also contributed to a government-led process to develop a water
management plan for the South Saskatchewan River Basin, of which the Bow River is a
part. Using a phased approach, the process collects input from several advisory
committees and the public to find the best balance between water use and environmental
protection in the basin. In 2004, our primary focus was to recommend water conservation
objectives for major rivers in the system.
We are also a member of the North Saskatchewan Watershed Alliance, a grassroots
umbrella organization comprising communities, industry, governments and other interest
groups. The Alliance is in the early stages of creating an integrated watershed
management plan for the river system. In early 2005, we joined the Alliance’s steering
committee, which will provide oversight for the plan’s development.
Aquatic environments The Bow River, the North Saskatchewan and the Skookumchuck rivers support diverse
fish populations. We look for opportunities to collaborate with our neighbours on projects
near our hydro plants to protect these aquatic environments.
Protecting fish on Skookumchuck River In 2004, TransAlta purchased the Skookumchuck dam from PacifiCorp. This dam, on the
Skookumchuck River in southwest Washington state, stores water to provide an
uninterrupted supply of water to TransAlta’s coal plant and mine at Centralia. The water is
used for many purposes, including process water, drinking water and cooling water.
TransAlta carries out fisheries and wildlife programs and manages impacts that result
from operation of the dam and reservoir. Working closely with the state Department of
Fish and Wildlife, we operate a fish trap that collects adult steelhead and coho salmon.
We transport and release steelhead and coho salmon upstream of the dam, spawn some
of the fish collected in the fish trap and raise the young — between 90,000 and 100,000
each year — and then release the young into the river each spring. We also supply water
to the state-owned salmon fish hatchery downstream of the dam.
TransAlta 57
Restoring fish habitats in Alberta We work with conservation groups, such as Trout Unlimited, to promote environmental
and fish habitat conservation in Alberta. We sponsor the organization’s Coldwater
Conservation Fund, which is dedicated to fish habitat restoration projects. In 2004, we
funded projects carried out by biologists and Trout Unlimited members in river areas
where we have operations.
TransAlta 58
Economic Performance Electricity contributes to a better quality of life in our homes, schools, institutions and
businesses. In generating this product, TransAlta fuels economic growth, creates jobs and
supports communities and governments through taxes, investments and donations. Many
aspects of our modern society, like lighting, heating, air conditioning, water treatment and
the use of computers, depend on electricity for their existence.
This section gives key figures and examples from 2004 of the economic impact
TransAlta’s business has on our stakeholders and surrounding society. Full details on our
financial information are found in TransAlta’s Annual Report and at www.transalta.com.
FINANCIAL H IGHLIGHTS
($Cdn millions except common share data)
2004 2003 2002
Revenues 2,838.3 2,520.9 1,814.9
Earnings from continuing operations1 160.6 234.2 66.8
Net earnings1 170.2 234.2 199.6
Cash flow from operating activities 613.4 526.9 398.6
Ratios
– Return on common shareholders’ equity (%) 6.5 10.3 3.9
– Debt to invested capital (%) 47.4 47.7 50.4
– Cash flow to interest coverage 4.1 3.3 3.8
Per common share data
– Earnings from continuing operations ($) 0.83 1.26 0.39
– Net earnings ($) 0.88 1.26 1.17
– Dividends ($) 1.00 1.00 1.00
1 Applicable to common shareholders
TransAlta 59
In 2004, our plant availability was 89 per cent. This is top quartile in our industry.
Creating Shareholder Value We create shareholder value by growing our business and efficiently operating our assets
to provide our customers with a reliable, competitive source of power. To do that, we
must:
operate our assets productively and safely
deliver excellent cash generation and selectively invest in new profitable capacity
maintain our business risk profile at the low end of the risk scale
Financial Performance In 2004, we delivered $0.70 in comparable
earnings per share, roughly the same as we
earned in 2003. Our reported earnings were
$0.88 per share, compared with $1.26 in 2003.
The main reasons were higher than normal
ongoing cycle maintenance expenses for our
plants, lower than anticipated sales from two of
our gas plants (our Sarnia plant in Ontario and
our Centralia plant in Washington state) and the
impact of increased interest expenses as new
generating plants have been placed into service.
We maintained a $1.00 per share dividend for
the sixth consecutive year.
Improving Cash Flow In 2004, our cash flow from operations continued
to improve, increasing 16 per cent from $527
million in 2003 to $613 million. This allowed us to
meet all our requirements for ongoing
reinvestments in our assets, dividends and debt
repayments.
TransAlta 60
Healthy Balance Sheet A strong balance sheet is important to us. We have set medium-term targets for key
financial ratios to improve our investment-grade credit rating. For our debt to capital ratio,
our goal is to reach 45 per cent. In 2004, TransAlta was at 47.4 per cent — a slight
improvement over 2003 but still short of our goal. Our cash flow to interest ratio target is
4.5 times. We are on track, coming in at 4.1 times in 2004, a marked improvement over
the 3.3 times we posted in 2003.
Focus on Productivity and Safety Our plants performed well in 2004. Overall, they
were available to dispatch power 89 per cent of
the time. High plant availability directly impacts our
bottom line. In fact, 81 per cent of our expected
power production is tied to long-term contracts
where revenues are based on meeting availability
targets and on the actual power dispatched.
This availability was driven by a series of
productivity improvements in 2004. Here are some
highlights:
A special task force carried out detailed benchmarking analysis of each of our plants. Our plant operating teams then used these studies to drive productivity improvements, ranging from streamlining parts management to fuelling our trucks more quickly to improving the efficiency of our equipment.
Our engineering and technology teams performed major outage work on 12 plants, finishing these with fewer outage days, less expense and less capital than budgeted.
Each of our plants have been assigned a multi-functional asset team whose sole purpose is to get the most production they can out of our facilities — safely, reliably and profitably. They deal with daily issues, determine when it is best to ramp up or ramp down our generators, help decide
Overall, it cost $40 for TransAlta to produce a megawatt hour of electricity in 2004, versus $37 in 2003. These amounts include all the costs of fuel, people and depreciation. Our mix of plants and the rising prices of natural gas and coal were the biggest cost drivers. Reducing this cost per megawatt hour remains a key priority for both business and social reasons. By managing the costs of electricity — an essential product, we benefit all consumers, especially low income Canadians who spend a higher percentage of their disposable income for energy purchases.
TransAlta 61
what major maintenance work needs to be done and the best time to do it, and develop the business case for future investments for their facility.
Our Target Zero initiative has been embraced across our fleet. Hazard and near miss reporting, an important feature of Target Zero, has grown from 3,000 in 2003 to 17,300. This change is positive — the more hazards and near misses reported, the more improvements are made, driving improved safety performance and reduced costs.
Risk Management As a responsible corporation, TransAlta has well established structures and processes in
place to identify and manage risks which may materially affect our business and, in turn,
the interests of our shareholders and other stakeholders. Each year we carry out a life of
asset review which produces an asset business plan. These plans consider the broad
range of environmental, economic and social risks and opportunities facing our company
— everything that affects our ability to sustain our business and create long-term
shareholder value.
We follow a two-stage approach to creating this strategic document:
First, each of our asset teams develops a business plan that identifies commercial and operational risks and opportunities for their plant. These plans consider different issues, including — but not limited to — maintenance, fuel pricing, emerging regulations, the costs of environmental improvements and changes in regional electricity pricing and infrastructure.
Second, we combine this information with a review of our financial activities, including financing and debt and equity transactions, to develop TransAlta’s five-year financial plan.
In preparing the business plan in early 2005, we put greater emphasis on better
understanding the impact of interest groups and potential emission reduction obligations
on our long-term profitability.
TransAlta 62
Direct Benefits TransAlta’s direct economic impacts can be measured
with traditional financial indicators, such as dividends,
employee costs, taxes paid and what we spend in
supplier goods and services. These measures show
how different stakeholder groups benefit economically
from our operations and activities.
Customers The bulk of our power is sold to three large customer
groups — utilities (60 per cent), government entities
(25 per cent) and industrial customers (10 per cent) —
with the balance going to various other companies. By
providing these customers with a reliable, cost-
effective supply of electricity and heat, we contribute to
their ongoing business success. In 2004, we produced
54,560 gigawatt hours, three per cent more power than
in 2003.
Investors and founders Through pension funds, mutual funds and direct
investments, Canadians invest in companies like
TransAlta. Our shareholders include many thousands
of senior citizens, who are attracted to our rate of
dividend per dollar invested. Our economic
performance affects their retirement income and social
well being.
In 2004, we provided investors and founders with a
secure place for their investment dollars, paying more
than $135.4 million in dividends to investors and
providing shareowners with an excellent yield on their
investment.
In 2004, our electricity production increased three per cent to 54,560 gigawatt hours — the equivalent of supplying power to 7.6 million homes.
TransAlta 63
Employees The dollars we pay our employees in wages and
incentive pay is a measure of our capacity to directly
benefit their quality of life. In 2004, we paid $142
million in wages and salaries to employees. Our staff
also earned over $352 million in employee benefits.
Governments In addition to our investments in communities, we
benefit local infrastructure by making tax payments
to governments in all the countries in which we
operate. These dollars are used by government to
fund public services ranging from schools to law
enforcement to roads and sewers. In 2004, we paid
over $20.8 million in property taxes to governments
in Canada, the U.S., Mexico and Australia. We paid
$4.6 million in income tax, payable to federal,
provincial and state authorities.
Suppliers Suppliers and contractors are a key part of our
business, which requires a diverse supply of
materials and services for construction, operation
and maintenance of our plants and facilities.
In 2004, we spent about $108 million for goods,
materials and services with suppliers on capital
projects and about $370 million for goods, materials
and services with suppliers in support of operations.
Local communities We benefit local communities in several ways. We inject roughly $1.6 billion each year
into local economies through capital and operating spending. We also provide corporate
donations and sponsorships to local community initiatives. In 2004, we invested more than
$3 million in these initiatives.
TransAlta 64
Investor Ratings A number of corporate social responsibility ratings agencies provide indexes that rate a
company’s social, ethical and environmental policies and practices. These indexes
provide socially responsible investors with the opportunity to gain exposure to companies
like TransAlta that meet globally recognized social responsibility standards.
Our main ratings are:
Dow Jones Sustainability World Index (DJSI World) TransAlta has been listed on the DJSI World for six years in a row. TransAlta is one of 13 Canadian companies on the index, which tracks the performance of sustainability leaders worldwide, selecting the top 10 per cent of companies leading each industry on economic, environmental and social performance.
World FTSE4Good Index TransAlta is a member of the World FTSE4Good Index, an international corporate social responsibility index, which identifies companies working toward environmental sustainability, developing positive relationships with stakeholders and upholding and supporting human rights.
Jantzi Social Index (JSI) TransAlta is included on the JSI, a socially screened common stock index. The JSI consists of 60 Canadian companies that pass a set of broadly based social and environmental screens.
Benefits To Regional Economies
Alberta For more than 90 years, our company has contributed to Alberta’s economy through jobs,
taxes and electricity production. We provide full-time jobs to about 1,500 people in the
province. Nearly $12 million in taxes were paid to regional and provincial governments in
2004. Besides our contribution to the provincial economy, we have the potential to
stimulate economic activity in different areas of the province.
TransAlta 65
Northern Alberta There is a direct link between the availability of electricity and steam and the province’s
capabilities to develop its abundant oil sands deposits. We own and operate the Poplar
Creek gas plant near Fort McMurray, supplying electricity to the region’s rapidly growing
oil sands development.
Central Alberta Since the 1950s, we have been a major part of the economic life of the Wabamun Lake
region west of Edmonton. In 2004, we provided more than 480 full-time equivalent jobs at
three coal plants in the region. Luscar, which operates our Highvale and Whitewood
mines, provides another 502 full-time equivalent jobs.
We are also a 50 per cent owner of the Genesee 3 generating facility, in partnership with
EPCOR. In 2004, the plant’s construction site was one of the largest and busiest in
Alberta. At peak construction, 2,100 tradespeople and contractors worked to complete the
450-MW plant. In March 2005, the plant began commercial operation. The addition of the
plant further increases the reliability of Alberta’s power supply.
Southern Alberta We employ over 500 people at our Calgary head office. We also contribute to the quality
of life in Calgary through the volunteer efforts of our employees and our community
investments. In 2004, our employees, retirees and company raised $546,000 for the
Calgary and Area’s United Way campaign, about 45 per cent of our total contribution to
the United Way worldwide.
In southern Alberta, our investments in wind farms benefit the regional economy,
contributing to jobs, municipal tax revenues and local purchases and services. In 2004,
we commissioned a wind farm at Summerview near Pincher Creek. This project, our fifth
wind farm in the region, is expected to inject about $20 million into the local economy over
its 30-year life.
Our power facilities benefit the regional economy in other ways. Our hydro dams are now
an essential part of Alberta’s water management, providing irrigation for agriculture in
southern regions.
TransAlta 66
Ontario We have operated in Ontario since the 1990s when we built our first gas plants at Ottawa
and Mississauga. These were followed by our Windsor plant and, most recently, by our
gas plant at Sarnia. To date, we have invested over $750 million to build and operate
these plants. The Ottawa, Windsor and Mississauga plants are owned 50 per cent by
TransAlta Power L.P.
We employ 160 people at the plants and
each year contribute to the Ontario
economy about $15 million in wages and
benefits, about $25 million through the
purchase of supplies and services, and
about $2 million in provincial taxes.
Our plants in Ottawa, Windsor and
Mississauga have long-term contracts at
prices that allow reasonable returns. Our
575-MW Sarnia plant, despite being one of
the most efficient gas plants in the province,
is operating below capacity, because of
market conditions and recent government
policy changes. We are discussing
opportunities with the Ontario government to
allow Sarnia to operate as intended and to sell more power into the province’s wholesale
electricity market.
Washington State We are the largest regional industrial employer in Centralia, Washington. We directly
employ 800 people at two power plants and one mine, and spend US$56 million each
year on payroll at Centralia.
Our power plant and mine generate about 10 per cent of the total property tax collected in
Lewis County and 30 per cent of the Centralia school district property tax. Each year our
facilities contribute nearly US$7 million in municipal and state government taxes. We are
also an important donor in the community. In 2004, our employees and company donated
US$330,000 to help fund local charitable initiatives.
In 2004, we invited 50 investor analysts to tour our facility in Sarnia, Ontario, and learn about our cogeneration plant. Employees manned displays throughout the plant to give analysts a hands-on demonstration
about how we deal with safety, environment,power dispatch and other aspects of our
business.
TransAlta 67
Goldfields Region, Western Australia Operating our two natural gas/diesel simple cycle plants in the Goldfields region of
Western Australia benefits the local economy. The plants provide low cost electricity for
mining operations and reinforce electricity supply in the region. We spend more than $5
million each year on employee pay and about $8 million in contractor services and
material purchases. We employ more than 50 staff at our plants and head office in Perth.
Mexico TransAlta operates two gas plants in Mexico,
one in Campeche and the other in the state of
Chihuahua. Together these plants supply 511
MW of reliable, affordable generation to the
Mexican electricity market, which, at projected
growth rates of between five and six per cent
over the next decade, is one of the fastest
growing in the Americas. TransAlta has a
long-term sales contract for both plants to
provide power to the Comisión Federal de
Electricidad, Mexico’s state-owned electricity
company, over the next 25 years.
Our investments in Mexico of approximately
US$450 million help to sustain infrastructure
for industry and services and introduce high
technology jobs into traditional agricultural regions, helping to diversify the local job
market and contributing to local well-being. Overall, we employ 78 people at the plants
and our TransAlta Mexico head office in Mexico City, and only two are expatriates.
Yearly operating expenses for our Mexican operations include about US$2 million for
employee pay and more than US$3 million for contractor supplies and services.
Mexican President Vincente Fox Quesada (second from left) and TransAlta CEO Steve Snyder (far left) inaugurated new plants in Mexico from TransAlta’s Campeche gas
plant on August 12, 2004. The plants were dedicated as part of 67th anniversary
celebrations for the Comisión Federal de Electricidad, Mexico’s state-owned
electricity company.
TransAlta 68
Corporate Social Responsibility
Corporate social responsibility is a growing focus for TransAlta. We aim to create and
maintain a safe, satisfying and fair working environment for our employees. We strive to
be a good neighbour, improving the quality of life in the communities where we operate.
We are also sensitive to the cultural environment in the areas in which we work. In
working toward these objectives, we are guided by policies, including but not limited to our
health and safety policy, our community investment policy and our corporate code of
conduct.
Workplace Health and Safety The business of producing electricity, by nature of our product and the work required to
produce it, presents safety risks and hazards. We take very seriously the job of managing
risks and eliminating hazards.
That is why we established our Target Zero initiative, with a vision to have a workplace
where people do not get injured doing their work. Key values that guide the actions on our
journey to achieve this vision are: All incidents are preventable. No job is so urgent that
we cannot do it safely. Good safety is good business. Each employee and contractor can
make a difference to our overall safety performance.
TransAlta 69
Performance
IFR for employees and contractors up Our employee safety performance has improved substantially since first implementing our
Target Zero initiative two years ago. In 2004, however, our employee injury frequency rate
(IFR) worsened. At year-end, it was 1.69 injuries per 200,000 hours worked, compared
with 1.47 in 2003. A major contributor to this increase was the higher number of
musculoskeletal (soft tissue) injuries in our plants and head office.
We also recorded a higher IFR for our contractors, from 0.93 in 2003 to 4.50. This
increase was mainly due to increased eye injuries during the year. The higher number of
contractor injuries in 2004 was a reminder that we must continually maintain our focus on
safety, especially during intense periods of plant maintenance activities, as was the case
last year. A new standard for contractor safety management has been developed, and will
be introduced throughout our organization in 2005.
In 2004, more than half the lost-time and medical aid injuries reported by our workers were musculoskeletal conditions. These were typically muscle strains or pain caused by repetitive motion, heavy lifting or general work practices. We are developing a major awareness campaign, to be launched in 2005, that will help our employees to identify musculoskeletal injury hazards and take early preventive action.
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17,000 near misses reported Much of our success can be attributed to the active participation of all our facilities, which
has led to increased hazard identification and near miss reporting. At year-end, all of our
locations had identified these conditions, in total reporting 17,300 hazardous conditions
and near miss incidents. This is almost six times the number reported in 2003. This
increase is positive. Once a hazardous condition or near miss situation is identified,
actions are taken to eliminate the hazard or the causes of the near miss to prevent future
occurrences. The more near misses and hazards are reported and acted on, the safer the
workplace.
Report card against leading indicators To keep improving our safety performance, it is essential we monitor the execution of key
elements of our safety management systems. Our company tracks a set of leading
indicators that tell us how we are doing in carrying out these activities to prevent EH&S
incidents. These consist of:
mandatory training
planned inspections
near miss and hazard reporting
incident investigation quality
All the indicators are focused on prevention. For example, conducting effective incident
investigations and promptly correcting the causes will help to prevent recurrence of
incidents in our worksites.
LEADING INDICATORS OF SAFETY PERFORM ANCE
03 04
Mandatory EHS training % complete 60 80
Planned EHS inspections % complete n/r 60
Near miss/hazardous conditions reporting number of reports 2,900 17,300
Incident investigation quality % 35 45
* n/r = not reported
TransAlta 71
TransAlta received the Canadian Electricity Association’s (CEA) gold award for safety in 2004. Derek Goodmanson, director, Eastern
Canada Operations (right), received the award from CEA President and CEO Hans
Konow at a ceremony in Ottawa.
Top rated by CEA for safety progress Each year the Canadian Electricity Association
honors Canada’s best performing member
companies in employee safety with an award of
excellence. In 2004, TransAlta’s Canadian
operations qualified as one of eight member
companies from across Canada to receive the
President’s Award of Excellence for employee
safety, with a gold award recognizing three or
more consecutive years of industry-leading
safety performance. This was the fifth year in a
row that TransAlta has been ranked in the top
quartile for low injury frequency and severity
rates.
Safety training and education
Strong focus on office safety Our near miss, hazard and injury reports show that safety issues exist everywhere we
work. One of the top causes of lost-time injuries across TransAlta in 2004 — slips, trips
and falls — applied to our offices as well as our plant and mine locations. Late in the year,
we took steps to raise more safety awareness in our offices, starting with our corporate
office in Calgary, where we held a series of two-hour safety training sessions. More than
350 head office employees took part in the sessions. In 2005, we plan to extend this
training to office employees outside of Calgary.
Expanding online education We continued to develop our e-learning system to provide flexible learning opportunities
for all our workers globally. Using the integrated computer-based system, employees can
select course content that applies to their roles, participate in online learning and monitor
their progress and record completions.
In 2004, we upgraded the system to improve ease of use and to better track course
completions. Tracking course completions is extremely important to TransAlta in
monitoring conformance to training requirements set out in our management systems.
Also, following employee skill development and career progress supports human
resources initiatives across the company.
During the year, about 1,200 employees completed EH&S training courses through our e-
learning system. In 2005, we plan to expand the system to incorporate new courses
promoting the use of our new EH&S incident management system, as well as assist with
our internal operating training progression systems for our Alberta coal plants and our
Sarnia gas plant. These will serve as pilots for the rest of the fleet.
CASE STUDY
Centralia mine improves safety, lowers costs
Identifying a hazard before it leads to an injury is a
focus of our Target Zero safety initiative. Following
this proactive approach, a group of millwrights at our
Centralia mine in Washington state identified a serious hazard and developed a
solution to address it.
Periodically, the plates and lifters on the mine’s rotary breaker, a large piece of
equipment which breaks up and processes raw coal, need to be replaced.
Previously, the heavy steel plates required extensive manual handling to move them
in and out of the machine. This method of changing plates can put workers at risk for
pinched hands and back injuries.
In 2004, the group proposed installing a three-ton winch to replace the old plates with
several manual steps in the process. After the winch was installed
Vehicle maintenance at Centralia mine
new, cutting out
TransAlta 72
and put into operation, employees were able to do their work more safely and
quickly. The result: reduced man-hours while increasing production, leading to
operating savings of $100,000 each year.
“This team works in a very demanding environment and always takes safety
seriously,” says Jeff Tornow, processing plant superintendent, Centralia. “It’s very
rewarding when employees recognize potential hazards and develop plans that not
only keep everyone safe but improve efficiencies as well.”
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Health and wellness programs TransAlta is committed to the protection of employee health. We coordinate the delivery
of diverse occupational health and hygiene programs aimed at developing and sustaining
a healthy workplace. Such programs include:
health/wellness promotion initiatives We promote preventive health care through different programs: ergonomics, health hazards, pre-employment medicals, occupational hygiene services and international travel health services.
hazard identification, evaluation and control Through occupational hygiene assessments, including air monitoring for contaminants and noise monitoring, we assess and evaluate these types of workplace hazards. Engineering, administrative or personal protective equipment controls are applied, as needed, to manage risk to employees.
health surveillance Medical monitoring of employees for symptoms of potential exposure to hazards is carried out to confirm that workplace controls are effective and employees will not experience any adverse health effects.
disability case management and fitness for work Through disability case management, we manage the return to work of ill or injured workers in a manner designed to prevent adverse health impacts from their injury or condition. Fitness for work assessments are completed to ensure employees are fit to do the job they have been employed to do.
employee and family assistance program This confidential counselling and information service helps employees and their families in dealing with work and non-work related issues.
Emergency Preparedness Well-developed emergency response plans are in place at all our facilities worldwide.
Describing the roles and responsibilities of our employees, these plans help our plant
managers to respond quickly to natural and man-made emergencies. We also carry out
regular emergency response exercises that test our procedures, and provide opportunities
to continually strengthen the emergency readiness of our people and facilities.
In 2004, we carried out two table top emergency exercises. One of these exercises,
simulating a bomb threat, was conducted at our Calgary head office. Focusing on
notification and search procedures, the exercise validated the emergency preparedness
and knowledge of our frontline employees.
The Alberta government, through Emergency Management Alberta, has developed an
emergency plan to deal with terrorist threats for critical infrastructure in the province,
including power plants. In consultation with this agency, we wrote an emergency response
plan, using the threat levels defined by the U.S. Department of Homeland Security, to deal
with the potential of terrorist threats at our Alberta facilities.
We also conducted internal security vulnerability assessments at our Calgary head office,
our gas plants in Ottawa and Mexico, and our coal plant in Centralia, Washington. As part
of these reviews, we provided security training, covering security risks and procedures, to
employees responsible for local plant security.
CASE STUDY
Rapid response to Sundance fire
At TransAlta, we have employees, backed by strong
procedures and constant training, that believe a safe
working environment is a top priority and can react
quickly and effectively in the unfortunate case when
emergency incidents do occur.
On July 8, 2004, our Operations team evacuated the Sundance plant as a result of a fire
detected in a boiler house wall. The team immediately realized that additional firefighting
help would be required and contacted local fire departments, who responded quickly to
the situation, sending fire trucks and personnel to the site. The team also switched the
generating units to minimum production levels until the extent of the damage could be
determined.
Sundance team
TransAlta 74
Once the fire was completely extinguished, Operations staff carefully assessed damage
to electrical cables and our options for bringing the generating units back to full load
production. Our repair crews then worked around the clock to restore power supplies and
electrical cabling. Throughout, the Operations team stayed calm, stuck to their training
and drills to quickly resolve the situation.
“The Sundance team’s first priority was to keep employees safe,” says Martin van
Huyssteen, director, Alberta Thermal Operations. “I’m proud to say there were no injuries.
They responded in a very professional manner, following all procedures and drills.”
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Employees Our more than 2,500 employees are a highly qualified, dedicated
group of people who can respond to complex challenges in a
dynamic energy business. At TransAlta, we expect a lot from our
workers, and they deliver, with hard work and dedication that
creates real results. Their efforts improve our productivity, maintain
our environmental and safety excellence, build our reputation in the
community and make it possible to deliver our product reliably
every day. Simply, they are our most important asset.
Work environment
Policies and initiatives Building on the strong foundation of our employees and making
TransAlta a great place to work can only happen when a work
environment is created in which everyone is encouraged to reach
their full potential and is treated with dignity and respect. TransAlta
has policies and initiatives to help foster this environment and to
ensure we create a workplace that attracts and retains the best
available talent and skills. Some of these policies and initiatives
include:
equal opportunity TransAlta is an Equal Opportunity Employer, supporting the fair and equitable treatment of all employees. All qualified employees seeking job opportunities in the company will receive consideration for employment without regard to race, religion, national origin, gender, age, physical disability or political affiliation.
flexible work arrangements As our business permits, we strive to be flexible in our work arrangements to address work-life balance issues. We offer policies for different flexible work arrangements for salaried employees and union staff who work shifts in mines and plants. We also have various leave programs, paid and unpaid, to address family and personal needs.
TransAlta 76
fairness and anti-harassment policies Our policies promote equality in the workplace and commit TransAlta to provide a workplace that is free of harassment, including racism, sexism, intimidation or sexual harassment. We have documented harassment investigation procedures that provide guidance to managers and employees in identifying harassment and providing employees with the means to report harassment and seek solutions. There are also clear policies to prevent violence in the workplace.
Pay and benefits At TransAlta, we recognize employee performance through many
types of rewards. Our strategy is to provide a mix of base pay,
annual incentives, benefits and retirement programs that reflect the
value of our jobs in the marketplace and the performance of our
employees and our business. To do this, we regularly participate in
many surveys to gather and analyze compensation data submitted
by comparable employers in each of our markets.
As well as a market-tested base salary for employees, we offer a
range of incentives and benefits to our employees. We provide
annual incentive bonus payments to non-unionized employees and
some bargaining units, based on the achievement of corporate and
departmental goals. Our incentive compensation recognizes
performance at the corporate, business unit, team and, for some
people, at the individual level. Our medium-term incentive program,
introduced in 2003, rewards managers and other selected
individuals for successfully carrying out corporate strategies that
contribute to longer-term shareholder value.
Providing opportunities for employee ownership in the company is a
priority for us. All regular and part-time employees, except senior
management, have the opportunity to purchase common shares
through the employee share purchase plan. This plan offers
employees an interest-free loan for up to 30 per cent of their base
TransAlta 77
salary. Senior managers and executives are eligible to receive shares under the
performance share ownership plan. Awards under this plan reflect the value we create for
shareholders, with shareholder return being the key measure.
We offer benefits programs to all employees. These programs vary from country to
country and reflect the availability and level of government-sponsored medical programs,
employment legislation and competitive market practices. In most locations, they include
life insurance, retirement programs and short-term and long-term disability coverage.
Employee recognition The Above & Beyond Program allows managers the opportunity to recognize employees
for their on-the-job accomplishments. Established in 2003, the program pays tribute to the
outstanding contributions of individuals and groups with cash rewards, merchandise and
other forms of recognition. Contributions can vary widely from identifying a safety hazard
to creating process improvements to showing leadership on the job.
Employee development We provide employees opportunities for personal and professional growth, focusing on
the development of core competencies such as business knowledge, decision-making,
technical skills, teamwork and leadership. We do this through a comprehensive
performance management process and our training and education programs.
We have redesigned our company’s performance management process for our out-of-
scope (non-union) employees. The new process improves how we assess and recognize
performance, as well as coach and develop employees to improve their performance. As
part of this process, employees are asked to complete self-reviews. Based on these
reviews, employees and leaders discuss competencies and development plans. These
discussions help to guide salary planning, internal recruitment and succession planning.
Special development programs identify employees with high potential and assist them in
expanding their leadership skills. In 2004, nearly 80 employees participated in our
leadership training programs. We also use job rotation as further means of professional
development. Employees being considered for broader managerial responsibilities are
rotated through different roles to broaden their experience.
Our online education program provides a one-stop shop for training and development and
enables employees to review and register for online courses. In 2004, nearly 300
TransAlta 78
employees took online courses covering technical skills, personal development and
understanding desktop software. Late in the year, we also launched Books 24X7, an
online reference tool that allows employees to have access to thousands of business-
related books.
Corporate Code of Conduct TransAlta’s Corporate Code of Conduct outlines our core commitment to the highest
standards of professional integrity. This document, which is available to all employees on
our website, highlights key principles dealing with respect in the workplace, conflicts of
interest, competition, insider trading, ethical business conduct, compliance with laws,
accounting issues, protecting TransAlta’s assets, health and safety, social responsibility,
and environment and sustainable development.
Employees are required to comply with the Code of Conduct and its underlying policies
and procedures. Employee with questions or concerns about the Code and potential
violations are expected to contact their supervisors or the Corporate Secretary, Internal
Audit or Legal Services. Each year, through a letter or email reminder from the CEO,
employees are asked to acknowledge the letter and spirit of the Code and its associated
corporate policies and to sign a paper or electronic acknowledgement indicating
compliance with the Code. Newly recruited employees sign the acknowledgement when
they start work at TransAlta.
Labour Relations TransAlta has seven unions and 12 different bargaining units in Canada, the U.S and
Mexico, and maintains positive working relations with these organizations. About 1,480, or
59 per cent, of TransAlta’s employees are covered by collective bargaining units. These
include many of our frontline people who operate our power plants and coal mines.
In 2004, our company reached collective bargaining agreements with seven bargaining
units, affecting 1,300 employees. These units included:
Communications, Energy and Paperworkers Union of Canada (CEP), Local 672 in Sarnia, Ontario, and Local 707 at Poplar Creek near Fort McMurray, Alberta
Sole Union of Electrical Workers of the Mexican Republic (SUTERM) in Campeche, Mexico
Canadian Auto Workers (CAW), Local 1967 in Mississauga, Ontario
TransAlta 79
International Brotherhood of Electrical Workers (IBEW), Local 125 in Centralia, Washington state, and Local 254 for our Alberta thermal and hydro facilities
International Union of Operating Engineers (IUOE), Local 612 in Centralia, Washington state
Under their agreements, union employees may use a set grievance procedure to raise job
issues. In 2004, there were about 80 formal grievances filed, involving issues about hours
of work, overtime, contracting out, terminations and disciplinary action taken by the
company. Only three of these disputes went to grievance arbitration.
Our union agreements also provide for occupational health and safety committees, which
provide a forum where management and union representatives can discuss potential
EH&S incidents and share ideas for promoting safe work practices as part of our daily
business activities. Through these committees, we are working together to advance our
Target Zero vision of no injuries in the workplace.
COLLECTIVE BARGAINING AGREEMENTS IN 2004
Union Jurisdictional area % of TransAlta’s workforce
Canadian Auto Workers (CAW) Mississauga and Windsor, Ontario
1%
Communications, Energy and Paperworkers (CEP) Union of Canada
Fort McMurray, Alberta, and Sarnia, Ontario
7%
International Brotherhood of Electrical Workers (IBEW)
Alberta and Centralia, Washington
23%
International Union of Operating Engineers (IUOE)
Centralia, Washington 19%
Power Workers’ Union (PWU) Ottawa 0.4%
United Utility Workers’ Association (UUWA) Alberta 4%
Sole Union of Electrical Workers of the Mexican Republic (SUTERM)
Campeche and Chihuahua, Mexico
2%
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Corporate Citizenship
Community investment TransAlta seeks to develop long-term and mutually supportive relationships with not-for-
profit organizations that serve the needs of the communities where our employees live
and work. We provide financial, in-kind and volunteer support to these organizations in our
different geographies.
In 2004, our company provided more than $3 million in corporate donations and
sponsorships in our communities. We continued to leverage key partnerships with not-for-
profit organizations, including:
Calgary Exhibition and Stampede, Hull Child and Family Services, and SAIT Polytechnic in Calgary
Fringe Theatre Adventures and TransAlta Tri-Leisure Centre in the Edmonton region
interPLAY Festival in Fort McMurray, Alberta
Lambton College in Sarnia, Ontario
Centralia College in Centralia, Washington state
As we grow our presence in new areas of operation, we are increasing our involvement in
community activities. In Mexico, in conjunction with the Canadian Chamber of Commerce
and the Terry Fox Foundation, we support the Hospital Infantil de México Dr. Frederico
Gómez, a children’s cancer hospital in Mexico City. In partnership with the Canadian
Embassy, our Mexico City employees also support the Terry Fox Foundation through the
annual Terry Fox Run to raise money for cancer research.
Partnering with Hull Child and Family Services Our multi-dimensional partnership with Hull Child and Family Services grew with the 2004
opening of the Hull TransAlta Community Connections facility. This building provides
much-needed services for children and families in Calgary. Whether it was assembling
office furniture for Hull’s new building or knitting sweaters for children or providing
assistance at the grand opening, our employees and retirees got involved in a big way.
They contributed more than 500 hours in volunteer time.
TransAlta 81
We also partnered with the agency on a number of
community-related initiatives. In 2004, we hosted
an arts show and sale at our Calgary head office,
raising $2,200 for Hull’s mentorship programs. We
supported Hull’s HOPE program by providing work
experience opportunities for their young adult
clients. And we drew on the expertise of Hull’s
aboriginal relations consultants to pilot a new
aboriginal awareness training session for our
employees.
Our commitment to children and youth qualified us
as a Promise Builder program, an initiative of the
Government of Alberta.
Tara Reum was one of 48 members of TransAlta’s Corporate Finance group who demonstrated their caring spirit, painting
hallways, bedrooms and a training room at Hull Child and Family Services in Calgary.
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TransAlta rated leading corporate citizen TransAlta was listed as one of 2004’s Best
50 Corporate Citizens in Canada, according
to a survey of large Canadian corporations
ranking the best corporate citizens in the
country. TransAlta was ranked eighth
overall, with a score of 75.2, in the third
annual survey published by Corporate
Knights, a quarterly Canadian business
magazine that reports on the role of
business in society. We also ranked number
one in the utility sector category.
To make the best 50 corporate citizens list, a
company must score better than its peers
across seven categories, including
community relations, employee
relations/diversity, environment, international stakeholder relations/human rights, business
practices/product safety, and corporate governance and share performance. Innovest
Strategic Value Advisors, known for sustainability evaluation, provided the source data.
Each year our company helps to fund environmental initiatives such as the
G.R.O.W. (Greening and Renewing Our World) program at the Keephills Elementary
School near Wabamun Lake, Alberta. In 2004, this outdoor education program
received a financial boost from TransAlta through Project Planet, our grassroots
environmental granting program for youth.
TransAlta 83
Volunteerism In addition to providing financial and in-kind
contributions, we encourage employees to
be active members of the communities
where they work and live, by providing them
avenues to volunteer. Four TACT
(TransAlta Community Transformers) teams
are active in different regions, reviewing
applications and allocating funds to local
community initiatives, and POWER
(Projects Organized With Energetic
Retirees), a group of retirees, volunteers
time and energy on community projects in
Alberta.
In 2004, volunteer employees in our TACT programs contributed more than 1,500 hours
to a wide range of projects. Here are examples from the various TACT teams:
Our Wabamun team near Wabamun Lake donated funding to Duffield School for upgrading the school’s playground to create a safer and wheelchair accessible environment for children. Funds were also distributed to Camp HeHoHa to adapt canoes to serve clients with disabilities.
Our Centralia team in Washington state donated funding to the America Red Cross in Chehalis to purchase first aid and CPR training for local Boy Scouts. As well, funds were designated to Kids Kloset to help purchase school clothes for youth in need.
Our Poplar Creek team in Fort McMurray, Alberta donated funding to the city’s Children’s Centre for the purchase of games, toys and books for its Literacy Library and Resource Centre. Employees were also active volunteers and helped serve at a fund-raising dinner for the Children’s Centre.
Our Sarnia team, in its first year of operation, organized a food drive for the city’s Inn of the Good Shepherd, donating funds and food from employees. The team also designated funds to Rebound, an organization that supports high-risk youth, and to Pathways, an organization that supports children with high-risk medical needs.
Our employees get directly involved in local community initiatives through our TACT
(TransAlta Community Transformers) teams. Here members of our Centralia TACT team
present a cheque to the Hands On Children’s Museum in Olympia, Washington.
Several years ago the POWER retirees developed an idea to convert available land into a
one-acre garden to grow vegetable produce and donate the harvest to the Calgary Inter-
Faith Food Bank. In 2004, they planted, tended and harvested a record crop of more than
14,400 kilograms of vegetables.
TransAlta employees are actively involved on non-profit boards and committees. Their
participation benefits community organizations by providing expertise and business
perspective. In return, our company benefits by learning new perspectives and better
ways to relate to external stakeholders. Our employees gain valuable experience and
build external relationships which, in turn, benefit the company many times over.
CASE STUDY
TransAlta employees energize Alberta high school through Project Planet
In 2004, our Hydro Operations employees volunteered
their time and technical expertise to staff and students
at Cochrane High School in making the school’s solar
and wind energy project a reality.
The project, driven by students and teachers, was
aimed at helping the Cochrane, Alberta school, west of
Calgary, become one of the first in Canada to run part of its building using
sustainable energy.
ed in-kind and financial support through our Project Planet granting
Hydro Operations Volunteers At High School in Cochrane,
Alberta, Bryan Aiton, supervisor, Hydro Operations(second from left), presents a
cheque to students at the Cochrane High School, who developed an idea to power their school with renewable
sources of energy.
TransAlta provid
TransAlta 84
program to purchase a wind turbine and 30 solar panels, which will generate 330
kilowatts for the school. TransAlta employees also helped to install the equipment
and gave a safety orientation to teachers, students and other workers involved in the
project.
“Our employees live and work in this community, so we felt it was important to lend a
hand,” says Bryan Aiton, supervisor, Hydro Operations, and one of six Hydro
employees who participated in the project. “It was great to see the energy of
everyone involved in the project.”
TransAlta 85
United Way Our company’s largest employee-driven community partnership is with the United Way.
We believe supporting this broad community agency is one of the most effective ways to
strengthen communities where our employees and retirees live and work.
Our 2004 United Way campaign theme, “Open Your Eyes, Open Your Heart,” captured
the minds of our employees and retirees. Our company exceeded our million dollar goal,
with employees and retirees raising $600,000 for the United Way. This was matched
dollar by dollar by the company, bringing our total contribution to the United Way to $1.2
miillion.
During a United Way Day of Caring, 13 employees from our Hydro operations paintedand spruced up buildings at Camp Adventure,
an outdoor recreation facility in Kananaskis Country operated by the Boys and Girls Club
of Calgary.
Employees from our Sarnia, Ontario gas plant cleaned eavestroughs and built a new fence
during a United Way Day of Caring at a home for adults with severe disabilities.
CASE STUDY
TransAlta employees embrace United Way
Organizing a United Way campaign takes time, dedication and energy of many
employees working together toward one goal — to raise donations for a worthy cause.
Coordinating successful campaigns year after year across TransAlta’s global
environment demands strong leadership from our employee volunteers.
Our 2004 campaign was no different.
Last year, we officially launched our 2004 campaign with the theme “Open Your Eyes,
Open Your Heart.” Linda Chambers, executive vice-president, Technology, and Tom
Rainwater, executive vice-president, Corporate Development and Marketing, co-chaired
the company-wide campaign. Supporting them were two employee co-chairs — Pam
Cook, coordinator, Community Investment, and Edith Shaw, executive assistant,
Operations, who headed up a team of 15 area campaign coordinators representing the
different plants and operating regions.
To map out the campaign strategy, Cook and Shaw met with the executive co-chairs and
set aggressive goals for the campaign. This year’s target was to be a “million dollar plus”
contributor to our communities. The campaign’s success was measured by actual
employee donations rather than participation.
Next, the two employee co-chairs organized a one-day training session in Calgary for
area campaign coordinators, where they shared their vision for the campaign.
“Our focus was for employees to have fun and at the same time open their eyes and
hearts to the different charitable causes in our communities,” says Shaw. “Each area
TransAlta 86
campaign was separate yet connected to the overall campaign. To bring a common focus
to this campaign, the executive co-chairs participated in as many area kick-off events as
possible. We also raised employee awareness about the different United Way events
through the TransAlta intranet website.”
What followed were various events over the fall, with each TransAlta location celebrating
United Way in its own unique way.
…continued
CASE STUDY …continued
In Mexico, local employee volunteers handed out pins with the United Way slogan in
Spanish and hosted “doughnut days” to explain the United Way (Fondo Unido) to plant
staff. Employees at our Australia plants created United Way T-shirts to raise awareness,
while our Western Canada plant employees sold cookbooks specially created for the
campaign. At Centralia, Washington and Sarnia, Ontario, volunteers organized
barbecues, with representatives from non-profit agencies on hand to talk with employees.
One of the many highlights at the Calgary head office included a three-day street hockey
tournament, dubbed the UWHL (United Way Hockey League), where eight teams of
executives and employees battled for hockey supremacy.
Thanks to these and other events, TransAlta reached its campaign goal of “one million
plus.” Employee donations at Calgary head office rose to 80 per cent from 76 per cent the
previous year, while company-wide donations increased to 54 percent from 52 per cent.
Once again, donations from employees at the Ottawa cogeneration plant reached 100
per cent.
Cook says the success of the 2004 campaign exceeded even her expectations. “The
2004 campaign was such a positive experience for our employees. They really enjoyed
themselves and, at the same time, became more aware of charitable causes close to
home.”
Adds Shaw: “With most regions exceeding their goals, it is clear they see the value of
supporting the United Way and there is a direct link between their efforts and the benefit
to their community.”
TransAlta 87
TransAlta 88
Stakeholder Relations TransAlta’s stakeholders are drawn from all sectors of society affected by our operations.
They include employees, regulators, government agencies, investors, local communities
and environmental non-government organizations. The quality of our relationships with
these diverse stakeholders is critical to the long-term success of our business. By
engaging with stakeholders through open and regular communication and consultation,
we deepen our understanding of what they expect from us and how we can meet their
expectations.
Public consultation We carry out public consultation practices that
are designed to address areas of shared
concern, and build strong relationships between
TransAlta and our stakeholders. These practices
cover a wide range: open houses, face-to-face
meetings, plant and mine tours and
presentations to citizen groups are but a few
examples. Not only are these events an
opportunity for us to share information about
TransAlta’s activities and impacts, they also help
us to demonstrate our commitment as a caring
corporate citizen.
Here are some examples of how we engaged with stakeholders in 2004:
We met monthly with Wabamun Watch, a stakeholder group consisting of mostly property owners around Wabamun Lake. The group’s role is to disseminate accurate and unbiased information about TransAlta’s operations and to ensure local citizens can provide input into decisions about TransAlta’s activities and proposed developments in the Wabamun Lake area. In 2004, the group provided feedback on various options in our long-term operational plan for the Wabamum Lake water treatment plant. During discussions of our license renewal application for the Highvale Mine, the group raised questions about the mine’s impact on local groundwater. We carried out detailed studies to address these questions.
More than 200 people attended TransAlta’s August open house at Wabamun Lake,
Alberta.
TransAlta 89
We surveyed readers of Kilowatt Connection, our quarterly newsletter to residents in the Wabamun Lake area, to find out whether our efforts to communicate with them were “hitting the mark.” Comments regarding the publication were largely positive, with 93 per cent of survey respondents saying that Kilowatt Connection is their preferred method for receiving information from TransAlta. Based on their feedback, we included updates on stakeholder committees and articles from external sources to bring more balance to the news and information we report.
We held an open house near Seba Beach, Alberta. This meeting with residents, cottagers and other members of the public encouraged dialogue about our operations in the area, including our long-term plans for the Wabamun Lake water treatment facility and decommissioning of the Wabamun plant.
We met with residents near our Alberta coal mines and used stakeholder input to improve our license renewable application for the Highvale mine. Measures for managing groundwater, dust and noise were incorporated in the application.
We held open houses and consulted with individual landowners to discuss different aspects of our Summerview wind farm, which began operation in 2004. We followed up questions about potential noise levels from the wind farm by providing information on our various sound modeling tests.
CASE STUDY
Wabamun Watch
When TransAlta looks for feedback on how it communicates to the local community at
Wabamun Lake on environmental issues, it regularly turns to Wabamun Watch, an
environmental group consisting mostly of stakeholders from around the lake.
“We act as a sounding board for what people around the lake are looking for in terms of
accurate information on TransAlta’s activities and the environmental health of the lake,”
says Rob Dickie, an environmental consultant who chairs the eight-person group, formed
in 2002 to disseminate accurate information from TransAlta as it relates to the lake.
To carry out its role, Wabamun Watch reviews reports by TransAlta, Alberta Environment
and other groups, and shares information through public meetings, displays at the local
farmer’s market and its website www.wabamun.watch. In 2004, Wabamun Watch met 10
times to discuss studies on water and sediment quality, water levels, local mercury
emissions and updates on decommissioning of TransAlta’s Wabamun coal plant.
“The meetings provide an important forum for TransAlta to update us on their operating
plans and environmental impacts,” says Dickie.
In 2004, when discussing TransAlta’s license renewal application for the Highvale mine,
the group raised questions about the mine’s impact on local groundwater. TransAlta in
turn provided detailed studies to address these questions.
“If we see data that is missing, we ask for it,” explains Dickie. “In the case of the mine
application, our members wanted to better understand if deeper excavations can affect
TransAlta 90
the groundwater in an adjacent community. So we asked for additional information and
we got it. TransAlta has been very responsive for any information that we’ve asked for.”
After three years of chairing the organization, Dickie reports that he’s noticed a significant
shift in local environmental concerns in the community.
“We’re starting to see decreased concerns from local stakeholders about the lake’s
environment,” says Dickie. “Four years ago water levels in the lake were a hot issue. But
today this is much less so. In fact, water levels are starting to come up significantly
because of TransAlta’s water treatment plant.”
…continued
Aboriginal relations Our operations are close to aboriginal
communities in Alberta and Ontario. In
Alberta, 380 kilometres (235 miles) of
transmission facilities cross 11 First Nations
lands, four hydro facilities border on lands
belonging to the Stoney (Nakoda) First
Nation and our coal plants and mines at
Wabamun are located near the Paul and
CASE STUDY …continued
“Also, concerns about water quality are gradually being put to rest because of recent
studies,” adds Dickie, referring to the work of an independent committee of scientists
which spent much of 2004 reviewing scientific studies of Wabamun Lake. In early 2005,
the committee, headed by Dr. David Schindler, reported its findings at a public meeting in
Stony Plain, Alberta. Wabamun Watch members attended the meeting as an
environmental “spokesperson” for area residents.
“Their findings concluded that with a few exceptions that the lake environment is in
relatively good shape. This is positive and supports what TransAlta and Alberta
Environment had said in the past. Today people are much happier with the condition of
the lake.”
TransAlta 91
Alexis First Nations. In Ontario, our Sarnia
gas plant is close to the Aamjiwnaang First
Nation.
We are committed to building positive
relationships based on mutual
understanding and respect with our aboriginal neighbours.
In late 2004, we initiated a review of our aboriginal relations policy, with the intention of
clarifying how we deal with aboriginal people and ensuring we remain consistent with
industry best practices. This will be completed in 2005.
Hull Child & Family Services hosted an Aboriginal Awareness Training session in
November, 2004 for TransAlta employees whowork closely with First Nations.
TransAlta 92
We also formed a cross-functional team to assess our areas of contact with aboriginal
communities, our current aboriginal relations practices and develop recommendations for
future interactions. And we renewed our aboriginal cultural awareness program for
employees. Hull Child and Family Services, one of our community investment partners,
offered this one-day training program on a pilot basis to select Calgary-based employees.
We plan to offer this course to other employees across our organization in 2005.
Supporting traditional land use study TransAlta participated in the Paul Band’s traditional land use study, along with
government and industry partners. The Paul Band is interested in documenting traditional
land use to preserve its cultural history and to assist in local economic and resource
development. The band’s oral history, passed down by elders, is being documented
through tape-recorded interviews. Global positioning systems and other information
technology will also be used to capture data.
The multi-phased project is expected to take about two years, resulting in education and
employment opportunities for band members. TransAlta has lent financial and in-kind
support to the project, and is participating in community advisory meetings.
TransAlta 93
Supplier Relationships We purchase a variety of materials and services from suppliers in our different
geographies. Materials range from basic items, such as gloves and safety supplies, to
specialized chemicals for water treatment. Services range from craft labour, such as pipe
fitters and welders, to highly specialized services.
In 2004, we continued to develop strategic relationships with suppliers. Developing these
relationships is a critical element of our major maintenance plan to reduce our long-term
costs, increase the efficiency and reliability of our equipment, and ensure that TransAlta
maintains technological leadership in all our assets.
For example, we entered into a new strategic contractor alliance in 2004 for outage work
on our boilers. In selecting our contractor partner, cross-functional teams examined
companies for a variety of performance indicators, including financial capability, risk
exposure, pricing, safety performance and their alignment with TransAlta’s culture and
values. Companies were required to complete detailed surveys on their safety
management and performance.
We use our strategic relationships to identify collaborative opportunities that help to
improve our operating and EH&S performance. In 2004, TransAlta and our boiler
contractor partner developed a joint safety plan for plant turnarounds, focusing on near
miss reporting to prevent safety incidents. Our strategic relationship with our
transportation supplier also helped us to improve how we track and manage the
movement of dangerous goods.
TransAlta 94
Leadership for Sustainable Development Our company has been actively involved in various industry associations and multi-
stakeholder organizations in Canada and worldwide for decades. The energy and ideas
we bring to these organizations help to advance industry leadership on sustainability and
contribute to positive economic, environmental and social impacts at local, provincial,
national and global levels.
In 2004, we continued to take important roles with many organizations:
Alberta Water Advisory Council Multi-stakeholder group with representatives from government, industry and non-government organizations. The council will report on the implementation of Alberta’s water strategy, released in late 2003, and make recommendations to the government, stakeholders and the public on water issues affecting the province. Mike Kelly, TransAlta’s director, EH&S, represents the electric power generation sector on the council.
BIOCAP Canada Foundation Canadian research and information partnership of organizations, universities and the private sector, funds and communicates national research efforts to explore how biological systems can help address climate change. Our membership provides learning and expertise that supports our search for least-cost, credible offset options. Dr. Bob Page, TransAlta’s vice-president, Sustainable Development, chairs the BIOCAP Board of Directors.
Canadian Electricity Association (CEA) Association of Canada’s major electricity producers. TransAlta provides leadership to diverse CEA working groups, including climate change and the Generation Council.
Canadian Chamber of Commerce in Mexico Network of Canadian companies doing business in Mexico. JoAnne Butler, Country Manager, Mexico, is First Vice-President of the Canadian Chamber of Commerce in Mexico. In 2004, TransAlta and other Chamber members organized a one-day conference to recognize the 10th anniversary of NAFTA (North American Free Trade Agreement). The event was attended by key Mexican leaders from government and industry, including Mexican president Vicente Fox Quesada.
Canadian Clean Power Coalition (CCPC) Industry-government consortium that plans to build and operate a full-scale clean coal demonstration plant by 2012.
TransAlta 95
Canadian Wind Energy Association (CanWEA) Association of wind energy developers and manfacturers across Canada. Starting in 2005, Theresa Howland, Vision Quest’s manager, Green Energy Marketing, will chair CanWEA, becoming the fourth Vision Quest employee to chair this prestigious national organization.
Clean Air Strategic Alliance (CASA) Partnership of Alberta industry, government and non-government organizations that develops strategies and action plants to manage the province’s air quality. Dr. Page represents the Alberta utilities and Theresa Howland, Vision Quest’s manager, Green Energy Marketing, represents alternate energy producers on CASA’s Board of Directors. Mike Kelly, director, EH&S, co-chairs CASA’s Electricity Project Team, and Theresa Howland is a member of CASA’s Renewable and Alternative Energy Working Group.
Environmental Law Centre Organization providing Albertans with an objective source of information about environmental and natural resources law. Ken Stickland, executive vice-president, Legal, serves on the Centre’s Board of Directors.
Industry Steering Committee on Climate Change Coalition of industry associations and individual companies working together to influence Canadian government policy on climate change.
International Emissions Trading Association (IETA) Geneva-based organization working with governments and industry to set up an international framework for trading GHG emission reductions. IETA is a principal advisor to the Canadian government on the establishment of a future Canadian emission reduction trading system. Dr. Page is past chair and a member of IETA’s executive committee.
International Institute for Sustainable Development (IISD) Non-profit organization that works with global partners to advance policy recommendations and share information on different economic and environmental issues. Dr. Page is a member of the IISD’s Board executive.
Pew Center on Global Climate Change U.S.-based non-profit organization that educates the public and policy-makers on challenges and opportunities to address climate change. TransAlta is a member of the centre’s Business Environmental Leadership Council, which consists of the leading North American companies on environmental and climate management.
TransAlta 96
West Central Air Shed Society Environmental non-profit organization that carries out monitoring and public reporting of air emissions in the west central region of Alberta near Wabamun Lake. Jim Bolton, TransAlta manager, EH&S Services, Alberta Thermal, is a member of the society’s multi-stakeholder Board.
West Coast Regional Carbon Sequestration Partnership U.S. consortium of industry sources and local, state and federal government agencies that plans to identify CO2 sources in the western U.S. states and determine cost-effective methods to capture and store emissions over the long term. Richard DeBolt, Communications and Community Relations Manager, TransAlta Centralia, represents our company in this partnership.
World Business Council for Sustainable Development (WBCSD) Organization of some 170 companies committed to mobilizing industry change toward sustainable development. Through the WBCSD, TransAlta provides leadership on energy and climate change issues and exchanges best practices with the world’s leading sustainability companies.
Policy Development We can contribute to our long-term sustainability by being able to influence public policy
that will affect our economic, environmental and social performance. To do that, we
monitor government thinking about our industry and look for opportunities to participate in
public dialogue where we can make a relevant and meaningful contribution. We regularly
make submissions to government on proposed legislation, and participate in numerous
industry forums on climate change, economic development and energy industry policy.
Some highlights from our activities in 2004 include:
Our company was appointed to the Stakeholder Advisory Committee on Reporting for the mandatory Canadian national GHG reporting process, which becomes effective June 2005. TransAlta is representing the Canadian Electricity Association.
We met with officials in the Ontario Minister of Energy’s office to resolve issues around our Sarnia gas plant, which is currently operating under capacity due to market conditions and recent government policy changes. We discussed opportunities that would allow the plant to operate as intended and sell more power into the province’s wholesale electricity market.
Vision Quest met with policy-makers in Ottawa to encourage expansion of the Canadian government’s Wind Power Production Incentive.
TransAlta 97
Along with other members of the Canadian Clean Power Coalition, we met with senior federal government policy-makers to create awareness of clean coal technology as an important climate change solution.
TransAlta, in conjunction with other companies in the Industry Steering Committee on Climate Change, delivered several presentations on climate change to government agencies, including the Canadian Prime Minister’s Office. Our presentations recommended taking a long-term technology-based approach to this major environmental issue.
We continued to take an active leadership role in Alberta’s Clean Air Strategic Alliance. In 2004, we advised the Alberta government on the development of regulations to meet air emission targets for the electricity industry.
Through the Asociación Mexicana de Energía Eléctrica, a group of leaders from Mexico’s major independent electricity producers, TransAlta provided input to a proposed federal law designed to promote renewable energy in Mexico. During the year, members of Vision Quest Windelectric also met with Mexican government leaders, including the Subsecretary of Electricity and the Undersecretary of Environmental Regulation, to discuss opportunities for wind power.
TransAlta 98
The Numbers Throughout this report we have quantified our sustainable development performance with
statistics collected over the last year. This section is a summary of those statistics.
TransAlta's economic performance is outlined in detail in our 2004 Annual Report.
Reporting Principles We have used the following criteria to prepare and compile data in this report:
Inclusion principles This report covers the calendar year ending Dec. 31, 2004. In some cases in our text, we
have also reported on significant items in early 2005.
We report EH&S data for generating facilities for which TransAlta holds the operating
permit, regardless of financial ownership. We do not report data from facilities or
operations discontinued during the calendar year. For facilities or operations purchased
during the calendar year, we report the entire year’s performance.
The following facilities will not be reported in this statistical summary but may be reported
in TransAlta’s 2004 Annual Report:
Genesee 3 expansion, Alberta (under construction in 2004; permit to be held by EPCOR and TransAlta)
Imperial Valley geothermal assets, California (operating permit not held by TransAlta)
Poplar Creek plant, Alberta (operating permit not held by TransAlta)
Power Resources Inc., Texas (operating permit not held by TransAlta)
Saranac plant, New York (operating permit not held by TransAlta)
Sheerness plant, Alberta (operating permit not held by TransAlta)
Yuma plant, Arizona (operating permit not held by TransAlta)
TransAlta 99
Reporting of financial performance is based on the proportion of financial ownership.
Megawatt hours used to calculate EH&S data in this report differ slightly from electricity
production reported in our 2004 Annual Report.
Reporting entity We report our activities corporately and by country. We cover direct operational impacts
and do not include supply chain impacts such as emissions from product suppliers.
Reporting scope We discuss achievements that result directly from our actions. We report performance
frequently through totals and ratios. We use total emissions to show environmental
impacts. We use emission intensity rates (for example, emissions per megawatt hour) to
measure our operations’ efficiency in controlling emissions.
TransAlta 100
Statistics
Corporate
2000 2001 2002 2003 2004
MANAGEMENT SYSTEMS
Facilities with ISO 14001 and/or OHSAS 18001-based management systems
20 26 27 30 31
Generation capacity with ISO 14001 and OHSAS 18001-based management systems (%)
69 92 92 94 95
Management system audits1 20 26 26 26 30
Compliance audits 8 10 11 14 16 ENVIRONMENTAL PERFORMANCE
Air emissions2
Sulphur dioxide (tonnes) 128,000 110,600 72,800 57,500 59,500
Sulphur dioxide emission intensity (kg/MWh) 3.12 2.78 1.71 1.26 1.26
Nitrogen oxide (tonnes) 66,800 65,500 67,400 68,000 66,400
Nitrogen oxide emission intensity (kg/MWh) 1.64 1.64 1.59 1.50 1.40
Particulate matter (tonnes) 5,600 7,000 7,400 6,200 6,300
Particulate matter emission intensity (kg/MWh) 0.14 0.18 0.17 0.14 0.13
Mercury (kilograms) 520 550 770 670 610
Mercury emission intensity (mg/MWh) 12.66 13.81 18.10 14.73 12.87
Greenhouse gas emissions3
Carbon dioxide (CO2E tonnes) 37,710,100 37,393,700 40,230,700 41,476,200 42,173,200
Methane (CO2E tonnes)4 174,800 168,200 197,000 192,700 191,000
Nitrous oxide (CO2E tonnes) 212,100 219,100 264,400 253,200 249,000
CFC-11 (CO2E tonnes) 0 1,040 0 0 0
Sulphur hexafluoride (CO2E tonnes) 0 0 194 0 0
Gross emissions (CO2E tonnes) 38,096,800 37,782,000 40,692,300 41,922,100 42,613,200
Emission reductions (CO2E tonnes)5 6,865,400 6,650,600 6,945,800 0 0
Net emissions (CO2E tonnes)5 31,231,700 31,138,300 33,753,900 41,922,100 42,613,200
TransAlta 101
2000 2001 2002 2003 2004
Gross emission intensity (kg CO2E/MWh) 928 949 957 922 899
Net emission intensity (kg CO2E/MWh)5 760 782 793 922 899
Land and materials management
Land used in mining activities (hectares) 18,170 17,880 18,610 16,920 17,100
Land used by plants, offices and equipment (hectares)6 4,140 4,150 2,490 3,040 3,090
Non-hazardous waste disposed (tonnes)7 1,610 2,570 4,050 2,700 1,440
Hazardous waste disposed (tonnes)8 0 20 286 7,927 638
Paper used (tonnes) 116 90 47 38 88
Paper recycled (tonnes)9 148 146 92 67 65
Water10
Total water intake (million m3) 574 595 732 603 571
Total water discharge (million m3) 484 509 630 504 478
Water consumption (million m3)11 90 86 102 99 92
Water consumption intensity (m3/MWh) 2.19 2.16 2.41 2.18 1.95
Regulatory performance31
Stack regulatory contraventions 13 11 8 0 0
General air regulatory contraventions 15 5 3 4 14
Spills to land regulatory contraventions 5 5 6 7 13
Spills to water regulatory contraventions 6 15 12 6 11
Other regulatory contraventions12 17 12 8 9 8
Administrative regulatory contraventions 0 0 0 3 4
Environmental enforcement actions13 5 5 7 8 10
PRODUCTION
Coal generation net capacity (MW) 4,629 4,674 4,674 4,589 4,488
TransAlta 102
2000 2001 2002 2003 2004
Natural gas generation net capacity (MW) 898 1,054 1,836 2,307 2,307
Hydro generation net capacity (MW) 801 801 801 801 801
Wind generation net capacity (MW) 0 0 44 82 150
Total net capacity (MW) 6,328 6,529 7,311 7,697 7,596
Coal net generation (MWh) 33,481,000 32,627,000 34,207,000 34,691,000 34,467,000
Natural gas net generation (MWh) 6,098,000 5,933,000 6,753,000 9,128,000 11,018,000
Hydro net generation (MWh) 1,492,000 1,267,000 1,464,000 1,471,000 1,614,000
Wind net generation (MWh) 0 0 117,000 190,000 305,000
Total net generation (MWh) 41,071,000 39,827,000 42,541,000 45,480,000 47,404,000
FINANCIAL PERFORMANCE
Earnings before regulatory decisions, income tax and non-controlling interest ($ millions)
279.80 214.60 189.90 234.2 160.6
Cash flow from operating activities ($ millions)14 188.70 715.60 437.70 756.5 613.4
Net earnings per share ($/share) 1.66 1.27 1.12 1.26 0.88
Income tax expense ($ millions) 128.50 89.90 9.40 64.60 50.10
Performance stock option shares (share options)15 600,000 400,000 200,000 200,000 200,000
Performance stock option shares (weighted average exercise price) 21.87 22.31 22.44 22.44 22.44
Employee future benefits ($ millions)16 423.5 403.4 353.3 351.9 352
Investment in wind generation ($ millions)17 68.50 10.00 82.00 0 0
Investment in distributed generation ($ millions) - 7.90 10.30 0.5 0.3
Investment in research and technology ($ millions) 3.50 1.20 0.50 0.68 0.20
Capital expenditures on environmental monitoring and pollution abatement ($ millions)18
n/r 74.1 69.2 3.4 1.3
Operations and maintenance expenditures on environmental monitoring and pollution abatement ($ millions)19
n/r 7.2 18.2 38.9 44.1
TransAlta 103
2000 2001 2002 2003 2004
SOCIAL PERFORMANCE
Health and safety
Health and safety enforcement actions20 1 1 43 18 5
Full-time equivalent employees21 2,343 2,550 2,373 2,546 2,517
EH&S full-time equivalent employees22 61 54 34 44 38
Injuries to employees 55 49 42 39 43
Employee injuries requiring absence from work 16 14 11 12 11
Employee recordable injury frequency rate (injuries/200,000 hours)23
2.30 1.84 1.60 1.47 1.69
Employee disabling injury frequency rate (injuries/200,000 hours)24 0.67 0.53 0.42 0.45 0.43
Injuries to contractors25 n/r n/r 37 18 45
Contractor injuries requiring absence from work25 n/r n/r 12 1 9
Contractor recordable injury frequency rate (injuries/200,000 hours)25
n/r n/r 2.00 0.93 4.50
Contractor disabling injury frequency rate (injuries/200,000 hours)25
n/r n/r 0.65 0.05 0.90
Short-term disability rate (days/1,000 employees)26 729 936 478 895 1,144
Long-term disability rate (cases/1,000 employees)27 1.28 2.35 2.72 1.03 2.07
Reportable vehicle incidents28 24 17 13 15 1
Health and safety training per employee (hours/employee) 7 10 6 6 8
Environmental training per employee (hours/employee) 1 1 <1 <1 <1
Community relations
Community investments ($ millions)29 5.3 5.0 5.2 5.0 3.4
Community investments per employee ($/employee) 2,280 1,960 1,910 1,720 1,160
Company-initiated volunteer hours per employee30 4.6 4.1 2.8 2.2 2.9
Please see discussion and notes section for explanation.
* n/r= not reported
TransAlta 104
Canadian Operations
2000 2001 2002 2003 2004
MANAGEMENT SYSTEMS
Facilities with ISO 14001 and/or OHSAS 18001-based management systems
20 19 19 20 21
Generation capacity with ISO 14001 and OHSAS 18001-based management systems (%)
92 93 92 92 94
Management system audits1 20 19 19 20 20
Compliance audits 6 5 9 13 7 ENVIRONMENTAL PERFORMANCE
Air emissions2
Sulphur dioxide (tonnes) 52,200 50,900 55,600 50,300 53,200
Sulphur dioxide emission intensity (kg/MWh) 1.73 1.74 1.77 1.63 1.48
Nitrogen oxide (tonnes) 44,900 43,900 48,398 46,306 46,247
Nitrogen oxide emission intensity (kg/MWh) 1.49 1.50 1.54 1.50 1.29
Particulate matter (tonnes) 4,380 5,960 6,222 4,827 4,958
Particulate matter emission intensity (kg/MWh) 0.15 0.21 0.21 0.16 0.14
Mercury (kilograms) 440 490 710 620 560
Mercury emission intensity (mg/MWh) 14.62 16.78 22.63 20.11 15.58
Greenhouse gas emissions3
Carbon dioxide (CO2E tonnes) 27,386,800 27,116,600 29,540,500 28,467,100 29,007,800
Methane (CO2E tonnes)4 134,200 124,400 137,200 133,500 136,000
Nitrous oxide (CO2E tonnes) 164,400 163,600 177,000 173,200 174,800
CFC-11 (CO2E tonnes) 0 1,040 0 0 0
Sulphur hexafluoride (CO2E tonnes) 0 0 194 0 0
Gross emissions (CO2E tonnes) 27,685,400 27,405,600 29,854,900 28,773,800 29,318,600
Emission reductions (CO2E tonnes)5 6,450,500 6,549,600 6,748,300 0 0
Net emissions (CO2E tonnes)5 21,234,900 20,856,000 23,106,600 28,773,800 29,318,600
Gross emission intensity (kg CO2E/MWh) 920 939 951 933 816
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2000 2001 2002 2003 2004
Net emission intensity (kg CO2E/MWh)5 706 714 736 933 816
Land and materials management
Land used in mining activities (hectares) 12,810 12,460 13,290 11,590 11,770
Land used by plants, offices and equipment (hectares)6 4,000 4,020 2,350 2,900 2,930
Non-hazardous waste disposed (tonnes)7 1,320 1,040 1,140 900 670
Hazardous waste disposed (tonnes)8 80 1,190 100 10 200
Paper used (tonnes) 108 80 36 25 71
Paper recycled (tonnes)9 120 114 61 61 57
Water10
Total water intake (million m3) 555 577 709 568 535
Total water discharge (million m3) 483 508 628 502 477
Water consumption (million m3)11 72 69 81 66 58
Water consumption intensity (m3/MWh) 2.41 2.37 2.59 2.14 1.62
Regulatory performance31
Stack regulatory contraventions 11 10 5 0 0
General air regulatory contraventions 13 5 3 4 7
Spills to land regulatory contraventions 5 2 3 6 7
Spills to water regulatory contraventions 5 11 9 3 17
Other regulatory contraventions12 16 12 5 8 6
Administrative regulatory contraventions 0 0 0 0 0
Environmental enforcement actions13 2 4 0 1 0
PRODUCTION
Coal generation net capacity (MW) 3,289 3,334 3,334 3,184 3,184
Natural gas generation net capacity (MW) 628 583 1,164 1,124 1,124
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2000 2001 2002 2003 2004
Hydro generation net capacity (MW) 795 795 795 795 802
Wind generation net capacity (MW) 0 0 44 82 150
Total net capacity (MW) 4,712 4,712 5,337 5,185 5,260
Coal net generation (MWh) 23,927,000 23,577,000 24,932,000 23,654,000 24,071,000
Natural gas net generation (MWh) 4,667,000 4,357,000 4,864,000 5,513,000 9,946,000
Hydro net generation (MWh) 1,492,000 1,267,000 1,464,000 1,471,000 1,614,000
Wind net generation (MWh) 0 0 117,000 190,000 305,000
Total net generation (MWh) 30,086,000 29,201,000 31,377,000 30,828,000 35,936,000
Capital expenditures on environmental monitoring and pollution abatement ($ millions)18
n/r 6.10 14.30 3.10 1.10
Operations and maintenance expenditures on environmental monitoring and pollution abatement ($ millions)19
n/r 4.30 7.80 11.60 11.50
SOCIAL PERFORMANCE
Health and safety
Health and safety enforcement actions20 1 1 39 10 1
Full-time equivalent employees21 1,535 1,700 1,600 1,847 1,561
EH&S full-time equivalent employees22 43 37 22 24 20
Injuries to employees 33 19 19 20 56
Employee injuries requiring absence from work 14 7 6 9 7
Employee recordable injury frequency rate (injuries/200,000 hours)23
2.13 1.07 1.45 0.58 1.06
Employee disabling injury frequency rate (injuries/200,000 hours)24 0.90 0.39 0.21 0.26 0.13
Injuries to contractors n/r n/r 14 16 16
Contractor injuries requiring absence from work n/r n/r 5 1 1
Contractor recordable injury frequency rate (injuries/200,000 hours)23
n/r n/r 3.29 2.10 2.10
Contractor disabling injury frequency rate (injuries/200,000 hours)24
n/r n/r 1.17 0.13 0.13
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2000 2001 2002 2003 2004
Short-term disability rate (days/1,000 employees)26 1,107 1,202 769 1,081 1,787
Long-term disability rate (cases/1,000 employees)27 1.94 3.53 3.75 1.08 1.92
Reportable vehicle incidents28 15 17 12 12 1
Health and safety training per employee (hours/employee) 5 11 5 <1 <1
Environmental training per employee (hours/employee) 1 1 <1 <1 <1
Community relations
Community investments ($ millions)29 5.28 4.94 4.91 4.44 3.30
Community investments per employee ($/employee) 3,440 2,910 3,070 2,410 2,110
Company-initiated volunteer hours per employee30 6.4 5.6 3.7 2.5 4.6
Please see discussion and notes section for explanation.
* n/r= not reported
TransAlta 108
U.S. Operations
2000 2001 2002 2003 2004
MANAGEMENT SYSTEMS
Facilities with ISO 14001 and/or OHSAS 18001-based management systems
0 2 3 3 3
Generation capacity with ISO 14001 and OHSAS 18001-based management systems (%)
0 87 89 97 97
Management system audits1 2 2 2 0 3
Compliance audits 2 0 2 0 3 ENVIRONMENTAL PERFORMANCE
Air emissions2
Sulphur dioxide (tonnes) 75,800 59,700 17,300 7,200 6,200
Sulphur dioxide emission intensity (kg/MWh) 7.93 6.56 1.81 0.63 0.58
Nitrogen oxide (tonnes) 18,100 16,500 13,420 16,320 13,940
Nitrogen oxide emission intensity (kg/MWh) 1.89 1.81 1.41 1.43 1.31
Particulate matter (tonnes) 1,230 1,030 1,140 1,310 1,290
Particulate matter emission intensity (kg/MWh) 0.13 0.11 0.12 0.11 0.12
Mercury (kilograms) 77 55 55 51 50
Mercury emission intensity (mg/MWh) 8.05 6.01 5.74 4.48 4.70
Greenhouse gas emissions3
Carbon dioxide (CO2E tonnes) 9,474,000 9,395,000 9,740,000 11,468,000 11,179,000
Methane (CO2E tonnes)4 38,000 41,000 57,000 55,000 50,000
Nitrous oxide (CO2E tonnes) 41,000 49,000 81,000 68,000 64,000
CFC-11 (CO2E tonnes) 0 0 0 0 0
Sulphur hexafluoride (CO2E tonnes) 0 0 0 0 0
Gross emissions (CO2E tonnes) 9,553,000 9,485,000 9,878,000 11,591,000 11,293,000
Emission reductions (CO2E tonnes)5 48,800 73,300 189,100 241,000 192,000
Net emissions (CO2E tonnes)5 9,504,000 9,412,000 9,688,900 11,350,000 11,101,000
Gross emission intensity (kg CO2E/MWh) 1,000 1,043 1,036 1,012 1,062
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2000 2001 2002 2003 2004
Net emission intensity (kg CO2E/MWh)5 995 1,035 1,016 991 1,044
Land and materials management
Land used in mining activities (hectares) 5,370 5,420 5,330 5,330 5,330
Land used by plants, offices and equipment (hectares)6 130 130 130 130 130
Non-hazardous waste disposed (tonnes)7 270 1,510 2,890 1,810 740
Hazardous waste disposed (tonnes)8 10 10 20 20 0
Paper used (tonnes) 4 8 8 10 10
Paper recycled (tonnes)9 28 32 32 6 8
Water10
Total water intake (million m3) 19 18 23 34 18
Total water discharge (million m3) 1 1 2 1 1
Water consumption (million m3)11 17 17 21 33 18
Water consumption intensity (m3/MWh) 1.82 1.86 2.22 2.89 1.68
Regulatory performance31
Stack regulatory contraventions 2 1 3 0 0
General air regulatory contraventions 2 0 0 0 7
Spills to land regulatory contraventions 0 1 3 1 6
Spills to water regulatory contraventions 1 4 3 3 0
Other regulatory contraventions12 1 0 3 1 2
Administrative regulatory contraventions 0 0 0 0 0
Environmental enforcement actions13 3 1 7 7 10
PRODUCTION
Coal generation net capacity (MW) 1,340 1,340 1,340 1,405 1,304
Natural gas generation net capacity (MW) 0 201 457 303 303
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2000 2001 2002 2003 2004
Hydro generation net capacity (MW) 0 0 0 0 0
Wind generation net capacity (MW) 0 0 0 0 0
Total net capacity (MW) 1,340 1,541 1,797 1,708 1,607
Coal net generation (MWh) 9,554,000 9,050,000 9,274,000 11,037,000 10,396,000
Natural gas net generation (MWh) 0 47,000 258,000 415,000 239,000
Hydro net generation (MWh) 0 0 0 0 0
Wind net generation (MWh) 0 0 0 0 0
Total net generation (MWh) 9,554,000 9,097,000 9,532,000 11,452,000 10,635,000
Capital expenditures on environmental monitoring and pollution abatement ($ millions)18
n/r 68.00 54.90 0.30 0.00
Operations and maintenance expenditures on environmental monitoring and pollution abatement ($ millions)19
n/r 2.80 5.70 22.40 26.90
SOCIAL PERFORMANCE
Health and safety
Health and safety enforcement actions20 0 0 4 8 4
Full-time equivalent employees21 739 783 824 882 819
EH&S full-time equivalent employees22 18 17 12 20 18
Injuries to employees 20 30 23 18 15
Employee injuries requiring absence from work 2 7 5 3 3
Employee recordable injury frequency rate (injuries/200,000 hours)23
2.79 3.56 2.61 2.05 1.86
Employee disabling injury frequency rate (injuries/200,000 hours)24 0.28 0.83 0.57 0.34 0.37
Injuries to contractors25 n/r n/r 7 0 0
Contractor injuries requiring absence from work25 n/r n/r 0 0 0
Contractor recordable injury frequency rate (injuries/200,000 hours)23, 25
n/r n/r 4.30 0.00 0.00
Contractor disabling injury frequency rate (injuries/200,000 hours)24, 25
n/r n/r 0.00 0.00 0.00
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2000 2001 2002 2003 2004
Short-term disability rate (days/1,000 employees)26 9 438 n/r 621 648
Long-term disability rate (cases/1,000 employees)27 0 0 1.21 1.13 3.66
Reportable vehicle incidents28 3 0 1 3 0
Health and safety training per employee (hours/employee) 10 10 9 7 9
Environmental training per employee (hours/employee) 1 2 1 1 1
Community relations
Community investments ($ millions)29 0.06 0.06 0.05 0.55 0.40
Community investments per employee ($/employee) 77 72 57 626 484
Company-initiated volunteer hours per employee30 1.3 1.2 1.6 2.0 1.6
Please see discussion and notes section for explanation.
* n/r= not reported
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Mexican Operations
2000 2001 2002 2003 2004
MANAGEMENT SYSTEMS
Facilities with ISO 14001 and/or OHSAS 18001-based management systems
- - - 2 2
Generation capacity with ISO 14001 and OHSAS 18001-based management systems (%)
- - - 100 100
Management system audits1 - - - 1 2
Compliance audits - - - 1 1 ENVIRONMENTAL PERFORMANCE
Air emissions2
Sulphur dioxide (tonnes) - - - 20 40
Sulphur dioxide emission intensity (kg/MWh) - - - 0.01 0.01
Nitrogen oxide (tonnes) - - - 500 1,000
Nitrogen oxide emission intensity (kg/MWh) - - - 0.31 0.31
Particulate matter (tonnes) - - - 500 1,000
Particulate matter emission intensity (kg/MWh) - - - 0.31 0.31
Mercury (kilograms) - - - 10 20
Mercury emission intensity (mg/MWh) - - - 0.01 0.01
Greenhouse gas emissions3
Carbon dioxide (CO2E tonnes) - - - 608,120 1,225,850
Methane (CO2E tonnes)4 - - - 1,000 2,010
Nitrous oxide (CO2E tonnes) - - - 5,250 10,610
CFC-11 (CO2E tonnes) - - - 0 0
Sulphur hexafluoride (CO2E tonnes) - - - 0 0
Gross emissions (CO2E tonnes) - - - 614,400 1,238,500
Emission reductions (CO2E tonnes)5 - - - 166,270 241,140
Net emissions (CO2E tonnes)5 - - - 448,130 997,360
Gross emission intensity (kg CO2E/MWh) - - - 380 390
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2000 2001 2002 2003 2004
Net emission intensity (kg CO2E/MWh)5 277 314
Land and materials management
Land used in mining activities (hectares) - - - - -
Land used by plants, offices and equipment (hectares)6 - - - - -
Non-hazardous waste disposed (tonnes)7 - - - - -
Hazardous waste disposed (tonnes)8 - - - - -
Paper used (tonnes) - - - - -
Paper recycled (tonnes)9 - - - - -
Water10
Total water intake (million m3) - - - 0.55 1.82
Total water discharge (million m3) - - - 0.44 0.39
Water consumption (million m3)11 - - - 0.11 1.43
Water consumption intensity (m3/MWh) - - - 0.07 0.45
Regulatory performance31
Stack regulatory contraventions - - - 0 0
General air regulatory contraventions - - - 0 0
Spills to land regulatory contraventions - - - 0 0
Spills to water regulatory contraventions - - - 0 0
Other regulatory contraventions12 - - - 0 0
Administrative regulatory contraventions - - - 0 0
Environmental enforcement actions13 - - - 0 0
PRODUCTION
Coal generation net capacity (MW) - - - 0 0
Natural gas generation net capacity (MW) - - - 511 761
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2000 2001 2002 2003 2004
Hydro generation net capacity (MW) - - - 0 0
Wind generation net capacity (MW) - - - 0 0
Total net capacity (MW) - - - 0 0
Coal net generation (MWh) - - - 0 0
Natural gas net generation (MWh) - - - 1,615,000 3,179,000
Hydro net generation (MWh) - - - 0 0
Wind net generation (MWh) - - - 0 0
Total net generation (MWh) - - - 1,615,000 3,179,000
Capital expenditures on environmental monitoring and pollution abatement ($ millions)18
- - - 0.000 0.244
Operations and maintenance expenditures on environmental monitoring and pollution abatement ($ millions)19
- - - 0.129 1.068
SOCIAL PERFORMANCE
Health and safety
Health and safety enforcement actions20 - - - 0 0
Full-time equivalent employees21 6 15 97 117 75
EH&S full-time equivalent employees22 - - - 0 0
Injuries to employees - - - 0 0
Employee injuries requiring absence from work - - - 0 0
Employee recordable injury frequency rate (injuries/200,000 hours)23
- - - 0.00 0.00
Employee disabling injury frequency rate (injuries/200,000 hours)24 - - - 0.00 0.00
Injuries to contractors25 - - 16 2 0
Contractor injuries requiring absence from work25 - - 7 0 0
Contractor recordable injury frequency rate (injuries/200,000 hours)25
- - 1.28 0.17 0.00
Contractor disabling injury frequency rate (injuries/200,000 hours)25
- - 0.56 0.00 0.00
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2000 2001 2002 2003 2004
Short-term disability rate (days/1,000 employees)26 - - - - -
Long-term disability rate (cases/1,000 employees)27 - - - - -
Reportable vehicle incidents28 - - - - -
Health and safety training per employee (hours/employee) - - - - -
Environmental training per employee (hours/employee) - - - - -
Community relations
Community investments ($ millions)29 - - - 0 3,000
Community investments per employee ($/employee) - - - 0 40
Company-initiated volunteer hours per employee30 - - 0.3 0.0 0.6
Please see discussion and notes section for explanation.
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Australian Operations
2000 2001 2002 2003 2004
MANAGEMENT SYSTEMS
Facilities with ISO 14001 and/or OHSAS 18001-based management systems
0 5 5 5 5
Generation capacity with ISO 14001 and OHSAS 18001-based management systems (%)
0 100 100 100 100
Management system audits1 0 5 5 5 5
Compliance audits 0 5 0 0 5 ENVIRONMENTAL PERFORMANCE
Air emissions2
Sulphur dioxide (tonnes) 0 0 0 0 0
Sulphur dioxide emission intensity (kg/MWh) 0.00 0.00 0.00 0.00 0.00
Nitrogen oxide (tonnes) 3,800 5,100 5,600 4,900 5,300
Nitrogen oxide emission intensity (kg/MWh) 2.66 3.34 3.43 3.09 3.15
Particulate matter (tonnes) 3,800 5,100 5,600 4,900 5,300
Particulate matter emission intensity (kg/MWh) 0.00 0.00 0.00 0.00 0.00
Mercury (kilograms) 0 0 0 0 0
Mercury emission intensity (mg/MWh) 0.00 0.00 0.00 0.00 0.00
Greenhouse gas emissions3
Carbon dioxide (CO2E tonnes) 852,000 882,000 932,000 933,000 760,000
Methane (CO2E tonnes)4 3,000 3,000 3,000 3,000 3,000
Nitrous oxide (CO2E tonnes) 6,000 7,000 7,000 7,000 7,000
CFC-11 (CO2E tonnes) 0 0 0 0 0
Sulphur hexafluoride (CO2E tonnes) 0 0 0 0 0
Gross emissions (CO2E tonnes) 861,000 892,000 942,000 943,000 770,000
Emission reductions (CO2E tonnes)5 0 0 0 0 0
Net emissions (CO2E tonnes)5 861,000 892,000 942,000 943,000 770,000
Gross emission intensity (kg CO2E/MWh) 602 584 578 595 458
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2000 2001 2002 2003 2004
Net emission intensity (kg CO2E/MWh)5 602 584 578 595 458
Land and materials management
Land used in mining activities (hectares) 0 0 0 0 0
Land used by plants, offices and equipment (hectares)6 10 10 10 10 10
Non-hazardous waste disposed (tonnes)7 20 20 20 20 30
Hazardous waste disposed (tonnes)8 0 0 0 0 0
Paper used (tonnes) 4 2 2 2 3
Paper recycled (tonnes)9 0 0 0 0 0
Water10
Total water intake (million m3) 0.12 0.17 0.10 0.10 0.04
Total water discharge (million m3) 0.00 0.00 0.00 0.00 0.01
Water consumption (million m3)11 0.12 0.17 0.10 0.10 0.03
Water consumption intensity (m3/MWh) 0.08 0.11 0.06 0.06 0.02
Regulatory performance 31
Stack regulatory contraventions 0 0 0 0 0
General air regulatory contraventions 1 0 0 0 0
Spills to land regulatory contraventions 0 2 0 0 0
Spills to water regulatory contraventions 0 0 0 0 0
Other regulatory contraventions12 0 0 0 0 0
Administrative regulatory contraventions 0 0 0 0 0
Environmental enforcement actions13 0 0 0 0 0
PRODUCTION
Coal generation net capacity (MW) 0 0 0 0 0
Natural gas generation net capacity (MW) 270 270 369 369 369
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2000 2001 2002 2003 2004
Hydro generation net capacity (MW) 0 0 0 0 0
Wind generation net capacity (MW) 0 0 0 0 0
Total net capacity (MW) 270 270 369 369 369
Coal net generation (MWh) 0 0 0 0 0
Natural gas net generation (MWh) 1,430,000 1,528,000 1,631,000 1,585,000 1,683,000
Hydro net generation (MWh) 0 0 0 0 0
Wind net generation (MWh) 0 0 0 0 0
Total net generation (MWh) 1,430,000 1,528,000 1,631,000 1,585,000 1,683,000
Capital expenditures on environmental monitoring and pollution abatement ($ millions)18
n/r 0.000 0.000 0.000 0.000
Operations and maintenance expenditures on environmental monitoring and pollution abatement ($ millions)19
n/r 0.090 0.107 0.089 0.042
SOCIAL PERFORMANCE
Health and safety
Health and safety enforcement actions20 0 0 0 0 0
Full-time equivalent employees21 63 52 52 55 51
EH&S full-time equivalent employees22 0 0 0 0 0
Injuries to employees 2 0 0 1 0
Employee injuries requiring absence from work 0 0 0 0 0
Employee recordable injury frequency rate (injuries/200,000 hours)23
1.56 0.00 0.00 1.80 0.00
Employee disabling injury frequency rate (injuries/200,000 hours)24 0.00 0.00 0.00 0.00 0.00
Injuries to contractors n/r n/r 0 0 1
Contractor injuries requiring absence from work n/r n/r 0 0 0
Contractor recordable injury frequency rate (injuries/200,000 hours)23
n/r n/r 0.00 0.00 10.01
Contractor disabling injury frequency rate (injuries/200,000 hours)24
n/r n/r 0.00 0.00 0.00
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2000 2001 2002 2003 2004
Short-term disability rate (days/1,000 employees)26 0 0 0 927 0
Long-term disability rate (cases/1,000 employees)27 0 0 0 0 0
Reportable vehicle incidents28 6 0 0 0 0
Health and safety training per employee (hours/employee) 4 0 0 3 1
Environmental training per employee (hours/employee) n/r n/r 0 1 <1
Community relations
Community investments ($ millions)29 0.005 n/r 0.005 0.000 0.005
Community investments per employee ($/employee) 79 n/r 100 0 98
Company-initiated volunteer hours per employee30 0.0 0.0 0.2 0.3 0.5
Please see discussion and notes section for explanation.
* n/r= not reported
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Discussion and notes on statistical summary 1. Represents the number of facilities that were audited during the year. In past
reports, we reported the number of audits conducted in the year. Several of our facilities in similar regions have one integrated EH&S management system due to their jurisdiction. As such, these facilities are audited simultaneously. The figures do not include audits that were conducted but were outside of the scope of this statistical summary.
The Mexican facilities were audited against ISO 14001 standards while under construction in 2002 and 2003, as required by the company's agreement with the Federal de Electricidad (CFE). During construction, internal management system audits were conducted but these audits are not reflected in these statistics as these facilities were not operational. Campeche was commissioned in May 2003 and Chihuahua was commissioned in September 2003.
2. Net generation and emissions statistics for 2001 from TransAlta's Canadian coal plants differ from the 2001 Sustainable Development Report and have been restated to reflect updated data.
Net generation and emissions statistics for 2003 from TransAlta’s Mexican gas plants have been updated from the 2003 Report on Sustainability due to a calculation error resulting in double counting. Nitrogen oxide emissions are expressed in tonnes of nitrogen dioxide (NO2). We have revised the 2003 total particulate matter estimates from the 2003 Report on Sustainability to reflect improved data. In 2004, the methodology used to estimate mercury emissions was reviewed and revised. As a result historic emissions have been updated.
3. In keeping with the reporting format recommended by the GHG Protocol, we have reported the impact of each GHG separately. GHGs have been converted into tonnes of carbon dioxide equivalent (CO2E), using global warming potential factors developed by the Intergovernmental Panel on Climate Change. We have also revised historical corporate emission intensities and emission totals. We have revised historical corporate emission intensities and emission totals as better emission factors have been applied to some sources. This improvement is the reason for discrepancies between the data in this report and previously reported data.
4. We have calculated methane emissions from coal mining, using the methodology described in the Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2001. All historical values have been recalculated. It has been assumed that the
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methodology used to calculate methane emissions from coal mines and coal combustion is discrete.
5. The corporate net emission rate is a result of TransAlta's emission reduction initiatives in Canada and purchased offsets from international projects. The U.S. net emission rate is only a result of reductions from the Centralia plant's fly ash sales. Gas-fired generation at Binghamton and Pierce Power do not have a lower emission rate than the grid average and, therefore, TransAlta claims no offsets from the operation of those facilities as they did not displace more CO2E-intensive power from the grid.
As there is no recognized Australian methodology for calculating potential offsets from independent power plants and due to the isolated location of TransAlta's Australian plants, we claim no offsets from the operation of these facilities.
With the implementation of mandatory GHG reporting in Canada and an anticipated Canadian climate change regulatory regime, as of 2003 TransAlta will no longer report offsets, credits, net GHG emissions or net GHG emission intensities. The concept of net emissions (direct emissions reduced by offsets and credits) has been subjective, and, while satisfactory in a voluntary reporting world, can be confusing in a regulatory one. Therefore, we will report our GHG gross emissions consistent with the requirements of federal and provincial reporting policies. We will continue to undertake emission reduction actions through such things as international and domestic offset purchases and internal projects that have GHG benefits. In a compliance regime, these will ultimately take the form of compliance instruments or credits used to meet reduction obligations and are, therefore, treated as proprietary information.
6. Decreased land use by plants, offices and equipment in 2002 was the result of the sale of the former transmission business unit in April 2002. 2003 does not include Sarnia, Campeche and Chihuahua land use.
7. Increased non-hazardous waste disposal in 2001 and 2002 reflected improved tracking and reporting of wastes. The 2001 U.S. non-hazardous waste totals have been restated to reflect improved tracking and reporting of waste at the Centralia mine.
8. Increased hazardous waste disposal in 2001 was the result of the removal of 1,162 tonnes of contaminated soil from a former transmission yard.
9. Due to the tracking process at our head office in Calgary, Alberta, the quantity of paper recycled by TransAlta cannot be determined separately from other building tenants. This results in a quantity of recycled paper that is greater than that used.
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10. In recent years, we have made changes in reporting methodologies to enhance reporting of TransAlta's impact on surrounding watersheds. In 2000, for example, mine water drainage was included in total water released. In 2001, the methodology to calculate water usage at the Wabamun plant was revised. In the 2002 report, we reviewed water statistics to ensure that consistent methodologies have been used and, based on our review, have restated statistics for historic water intake, release, consumption and intensity. In any year TransAlta's water use largely reflects the operation of our Wabamun plant at Wabamun, Alberta. In 2001, the decrease in water consumption and water consumption intensity was mainly because of limited plant operation. In 2002, the increase in water use reflected near-capacity power production at the plant.
11. This is the total water consumed by TransAlta's operations as measured by total water removed from the environment and total water returned to the environment. As such, the consumption intensity tends to be overstated as these figures do not account for evaporation losses from our cooling ponds, which is also water returned to the environment.
12. These are incidents that may impact the environment, but are out of the scope of air, land and water contraventions that require reporting to an external regulatory agency. Examples could include equipment failures and permit non-compliance.
13. These are contraventions reported to an external regulatory agency and resulting in a fine, penalty or corrective action.
14. This is cash flow from operating activities only and does not include cash flow from investing or financing activities.
15. This is one of three stock-based compensation programs offered to TransAlta employees. The company grants stock options to employees based on the market price of the shares as determined on the date of the grant.
16. This includes TransAlta's registered pension plan with defined benefits and defined contribution options and a supplemental defined benefits plan. All employees have a future benefits plan, although the defined benefit of the pension plan ceased for new employees on June 30, 1998.
17. This includes TransAlta's purchase of Vision Quest Windelectric in 2002. Investment in distributed generation companies is not included in 2002 totals as it has been in previous annual totals.
18. This includes capital expenditures for environmental protection, such as environmental monitoring, pollution abatement and administrative costs. The increase in capital expenditures in 2001 and 2002 is due to the installation of air
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emission control equipment at our Centralia plant and the construction of a water treatment facility at our Sundance plant.
19. This includes operating and maintenance expenditures for environmental protection, such as environmental monitoring, pollution abatement and administrative costs. The 2001 figures are not based on comprehensive accounting and do not include the costs associated with mine land reclamation, waste management and administrative costs. The 2002 and 2003 figures account for these expenditures. The increase in operating and maintenance expenditures in 2003 is a result of better accounting of these expenses at our plants and mines and an increase in mine reclamation work.
20. These are health and safety incidents resulting in a regulatory enforcement action. Enforcement actions could take the form of a warning letter, fine or non-financial reprimand or restriction on operations. This definition differs from previous TransAlta sustainable development reports. We have adjusted historic data to account for this change in methodology.
21. All TransAlta employees on December 31. Each non-full-time employee (part-time, contract or hourly) is the calculated equivalent of 0.70 full-time.
22. In 2002, TransAlta's corporate EH&S department was reorganized. Staffing resources were reallocated and relocated as part of a corporate-wide initiative to promote consistent practices.
23. The recordable injury frequency rate (IFR) measures work-related medical aid and lost-time injuries per 200,000 hours worked. During the course of the year, all work-related safety incidents are investigated. These investigations sometimes provide new information that results in an incident being reclassified. In this report, we have restated our 2002 injury frequency rate from that reported in our 2002 Fourth Quarter Sustainable Development Report due to a change in an incident classification.
24. The disabling injury frequency rate is based on the number of injuries requiring absence from work or lost-time incidents only.
25. The data presented for 2000 to 2003 does not include injuries from our Centralia plant and mine.
26. This reflects the number of days lost due to absenteeism from work, up to six months in duration. Absence may be due to work-related incidents or injuries incurred outside of work. In 2000, the number of days lost to short-term disability was not tracked at the Centralia mine and, therefore, is not included in aggregated totals. In 2001 and 2003, the number of days lost at the Centralia mine due to short-term disability was tracked and included in the indicator and is one reason for the
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resulting rate increase. In 2002, the number of days lost to short-term disability was not tracked at the Centralia plant and mine. This is one reason for the resulting rate decrease.
27. This reflects the number of employees absent from work for more than six months. Absence may be due to work-related incidents or injuries incurred outside of work.
28. In 2003, one vehicle accident resulted in a medical aid injury to an employee. All other accidents resulted in minor equipment or property damage.
29. Community investments include all community donations and community sponsorships and are aggregated based on budget allocation, not location of recipient.
30. This includes volunteer activities organized by TransAlta such as volunteering during work hours as part of United Way campaigns. This does not include volunteer activities that employees engage in outside of their employment at TransAlta.
31. In 2004, the classification of environmental incidents was reviewed and revised. The stack environmental contravention was eliminated and an administrative category was added. The stack incidents from 2003 and 2004 have been classified according to these new categories for comparison purposes between the two years.
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Systemic indicators Environmental performance Regional National
CO2 11.9 % of Alberta’s emissions
4.0 % of Canada’s emissions
1.1 % of Ontario’s emissions
SO2 10.7 % of Alberta’s emissions
2.3 % of Canada’s emissions
1.0 % of Ontario’s emissions
NOx 6.1 % of Alberta’s emissions
1.8 % of Canada’s emissions
2.8 % of Ontario’s emissions
Particulate matter 0.1 % of Alberta’s emissions
<0.1 % of Canada’s emissions
<0.1 % of Ontario’s emissions
Mercury 38.1 % of Alberta’s emissions
1.8 % of Canada’s emissions
14.5 % of Washington’s emissions
Economic performance Regional National
Electricity production 41.7 % of Alberta’s production
6.8 % of Canada’s production
2.3 % of Ontario’s production
0.3 % of U.S. production
4.7 % of Washington’s production
0.8 % of Australia’s production
1.5 % of Mexico’s production
Electricity workers 9.4 % of Alberta’s electricity workers
1.2 % of Canada’s utility workers
0.3 % of Ontario’s electricity workers
0.6 % of U.S. utility workers
Social performance Regional National
Alberta: 1.61 Mexico: 6.04 Ratio of TransAlta lowest wage to legal minimum wage Ontario: 2.69 Australia: 2.45 Washington: 1.38
* n/a = not available
The regional and national mercury indicator represent total on-site mercury releases.
Sources: Environment Canada, United States Environmental Protection Agency, United Nations Framework Convention on Climate Change Greenhouse Gas Database, Comisión Federal de Electricidad, North American Electric Reliability Council, Alberta Energy and Utilities Board, Statistics Canada, Canadian Electricity Association, United States Bureau of Labor Statistics, Ontario Ministry of Labour, Mexican National Commission for Minimum Wages, Australian Council of Trade Unions, Energy Supply Association of Australia Limited, Alberta Human Resources and Employment, Washington State Department of Labor and Industries
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GRI Content Index
Reclaimed land at Whitewood Mine
We recognize that some readers use the Global Reporting Initiative (GRI) in reviewing a
company’s economic, environmental and social performance. The following table provides
an index to the 2004 TransAlta Report on Sustainability based on the GRI reporting
elements and indicators, as defined in the GRI Sustainability Reporting Guidelines 2002.
fully covered
partially covered
not covered
Coverage in
this report Links/comments
TransAlta’s vision and strategy Management review, Our outlook and focus
Profile
Organizational profile What we do
Report scope and profile How we measure sustainability at TransAlta, Reporting principles
Structure and governance Organization
Governance structure Corporate governance
Organizational structure Organization
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Coverage in this report
Links/comments
Stakeholder engagement Stakeholder relations
Policies and management systems Policies, Management systems
Economic performance indicators
Customers Customers
Suppliers Suppliers
Employees Employees
Providers of capital Investors and founders
Public sector Governments
Indirect economic impacts Benefits to regional economies
Environmental performance indicators
Materials Most of the energy-related to materials is covered under energy. Marketing waste by-products
Energy Diversifying fuel mix, Renewable energy
Water Water resources
Biodiversity Land use and protection, Aquatic environments
Emissions, effluents and waste Greenhouse gases (GHGs), Air quality, Waste
Suppliers Supplier relationships
Products and services Primary energy and resource direct impacts are described in the environmental performance section. TransAlta's product is electricity and, as such, has minimal post-generation impacts in its use.
Compliance Regulatory compliance
Transport Greenhouse gas emissions from mining and fleet vehicles are included in our greenhouse gas inventory and represent 0.4% of total tonnes of CO2E.
Overall Environmental spending
Social performance indicators
Labour practices and decent work Work environment
Employment
Labour/management relations Labour relations
Health and safety Workplace health and safety, Health and wellness programs
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Coverage in this report
Links/comments
Training and education Safety training and education, Employee development
Diversity and opportunity Policies and initiatives
Human rights Policies and initiatives, Corporate Code of Conduct
Society
Community Community investment, Volunteerism, United Way
Bribery and corruption Corporate Code of Conduct TransAlta has a policy that requires all employees to adhere to the company's "Corruption of Foreign Officials" policy which states: “Employees are strictly prohibited from directly, or indirectly, offering officials of foreign government bribes for the company.” The policy recognizes the requirement of OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
Political contributions TransAlta has a policy that governs contact with and contributions to political communities. The policy ensures that interactions with the political, regulatory and public sector are conducted to the highest standard of business ethics and in compliance with all applicable laws.
Competition and pricing Corporate Code of Conduct
Products and services
Customer health and safety TransAlta has only a few industrial customers and, therefore, has little opportunity to affect customer health.
Advertising We do not advertise our product.
Respect for privacy TransAlta has a policy that requires that “employees not disclose confidential information or conduct themselves in a way that would jeopardize the safety or security of information proprietary to the company, including information about customers.”
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Glossary Bottom ash
Heavier ash that collects in the bottom of the boiler after the coal is burned. This ash is
collected and stockpiled in approved disposal areas.
Carbon dioxide equivalent (CO2E)
Measure used to compare the emissions of various GHGs based on their global warming
potential. Expressed in CO2.
Climate change
Term used to describe the view that the Earth's temperature and climate will change, in
part, due to GHG emissions associated with human activities.
Chlorofluorocarbons (CFCs)
Various compounds consisting of carbon, hydrogen, chlorine and fluorine found in aerosol
spray products and refrigerants. CFCs contribute to the depletion of the Earth's ozone
layer and to the buildup of GHGs.
Cogeneration
Technology that simultaneously produces power and thermal energy (heat and steam)
from a single fuel source such as natural gas.
Combined cycle
Technology that captures waste heat from gas-fired turbines to produce more electricity.
Decommissioning
Safe and orderly permanent shutdown of a utility plant.
Emission intensity
Amount of emissions per megawatt hour produced. Emission intensity rates measure an
operation's efficiency in controlling emissions.
Emissions reduction trading
Innovative market-based approach that allows organizations to buy and sell emission
reductions. In an emissions trade, one company earns credits for emissions removed or
not released into the atmosphere. Companies that emit can purchase these credits to
reduce their emissions impact on the atmosphere.
Environmental contraventions
Include events that contravene our company's permit conditions or environmental
regulations. Examples may include releases (such as spills of engine oil), submitting late
reports and exceeding emission limits for operating permits.
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Fines
Amount payable as a result of an enforcement action.
Environmental enforcement actions
Include events that contravene our company's permit conditions or environmental
regulations and result in fines, penalties or citations.
Fly ash
Particulate matter from coal ash that exits boilers along with hot gases. Pollution control
equipment such as electrostatic precipitators remove more than 99 per cent of the fly ash
before it can be released into the atmosphere.
Geothermal energy
Electricity generated by using steam from below the Earth's surface.
Global Reporting Initiative (GRI)
Guidelines setting global standards for sustainability reporting by companies.
Greenhouse gases (GHGs)
Gases that trap heat near the Earth's surface, thereby potentially moderating our global
climate. They include CO2, methane and water vapour. These gases occur through
natural and human-influenced processes.
Health and safety enforcement actions
Include employee and contractor events that contravene our company's permit conditions
or health and safety regulations and result in fines, penalties, orders or citations.
Health and safety incidents
Include employee and contractor incidents resulting in medical aid and lost-time injuries.
Kyoto Protocol
International agreement created in December 1997 to address worldwide GHG emissions.
Under Kyoto, individual countries are obligated to reduce their GHGs by a specified
amount.
Megawatt (MW)
Measure of electric energy equal to one million watts.
Mercury
Trace heavy metal found in coal and emitted from oceans and land masses. Mercury
emissions from human activities are about a quarter of worldwide mercury emissions.
Nitrogen oxides (NOx)
Gas released in the burning of fossil fuels and a contributor to smog.
Offset
TransAlta 131
Emission reductions produced by projects outside TransAlta and supported by our
company through commercial purchase contracts. In most cases, these projects are less
expensive than internal reductions, thereby permitting TransAlta to achieve more GHG
reductions for the same investment. Also, these offsets often provide additional benefits in
terms of local development, employment and general environmental improvement.
Opacity
Amount of light obscured by particulate levels in the air. A measure of environmental
performance resulting from particulate emission control systems.
Particulate matter
Fine solid or liquid material released into the air from the burning of coal or other plant
processes.
Renewable energy
Naturally occurring energy resources that are continually replenished. Examples of
renewable energy sources are wind, solar and water.
Stakeholders
People that affect or are affected by company operations, including customers,
employees, media, regulators, community leaders, governments, and investors and
shareholders.
Sulphur dioxide (SO2)
Emission that results mainly from the burning of sulphur in fossil fuels and contributes to
acid deposition.
Watershed
Area of land that catches precipitation and drains it to water bodies such as lakes,
streams or rivers.