TransAlta Receives EUB Approval On Sale Of Distribution & Retail Business

CALGARY -- - TransAlta has announced it has received approval from the Alberta Energy and Utilities Board (EUB) for the sale of its Alberta distribution and retail business to UtiliCorp Canada Corp. The previously announced transaction, anticipated to close this summer after all conditions have been satisfied, is expected to generate proceeds of about $645 million, for a gain of approximately $140 million ($0.83 per share).

"We are pleased with the result and the timely decision by the EUB," says Steve Snyder, president and CEO. "Completing the sale allows us to focus on our strategic direction and accelerate the growth of our generation, transmission and gas-fired independent power businesses," he added.

The transaction includes 90,000 kilometres of low-voltage distribution power lines, which represents 50 per cent of Alberta's distribution network system, and a 24-hour customer call centre in Calgary. As part of the decision, Utilicorp has agreed to retain the aproximately 650 distribution and retail employees for at least one year after the final closing date. TransAlta and Utilicorp have agreed to work together to ensure a seamless transition for customers and employees.

Since the beginning of this year, TransAlta has delivered on its growth strategy by: completing the $600-million sale of its New Zealand business, acquiring the 1,340-megawatt Centralia power plant and coal mine in Washington state, negotiating to build its first 250-megawatt, gas-fired power plant in Mexico, and announcing plans to expand its gas-fired independent power business into the United States through a 50 per cent ownership in Merchant Energy Group of the Americas.

TransAlta's goal is to deliver earnings growth of more than six per cent per year and increase generation to 10,000 megawatts by 2002.

TransAlta is an international electric energy company with about $6 billion in assets. The company is focused on achieving strong earnings growth and enhancing its competitive edge as a low-cost operator of generation and transmission assets, and a successful developer of gas-fired independent power projects. The company is concentrating its growth in Canada, the United States, Australia and Mexico. TransAlta owns and operates more than 8,000 megawatts of generation plus significant transmission assets in Alberta.