TransAlta shares rose more than 5 per cent on Friday after the data-centre announcement and release of financial results for the last quarter of 2025.CHRIS WATTIE/Reuters
TransAlta Corp. TA-T said on Friday it is nearing a deal with Canada Pension Plan Investment Board and Brookfield Asset Management to supply power to a new data centre in Alberta as the province looks to such arrangements as the start of a boom in investments.
Under a memorandum of understanding, the companies have set terms for the phased development of TransAlta’s Keephills site in central Alberta. CPPIB and Brookfield would build and own the data centre, and TransAlta would provide electricity under a long-term power-purchase agreement for 230 megawatts from the company’s generating station there.
The MOU also calls for a potential expansion to 1,000 MW of power supply.
The Alberta Electric System Operator (AESO) last year selected Calgary-based TransAlta as one of two providers of electricity for the first phase of the government’s data-centre push. Premier Danielle Smith’s United Conservative Party government reiterated its strategy to be a top destination for such investments in its provincial budget tabled on Thursday.
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The minister in charge, Nathan Neudorf, has said the province established a bring-your-own-power policy to prevent the computing hubs from burdening consumers by sucking up large amounts of juice from the grid.
TransAlta chief executive officer John Kousinioris said the Keephills site, located 70 kilometres west of Edmonton, is ideal for a facility used to power artificial intelligence and other data-heavy activities. It has available zoned land, transmission lines, as well as gas and water infrastructure to support future expansion, he said.
Mr. Kousinioris said he was unable to provide many of the details of the MOU, including cost estimates and precise timelines, as negotiations are still under way. The parties still need to finalize a number of items before giving the project the green light, such as a definitive power-supply agreement and land lease arrangements, he said during a conference call. The arrangement will also require regulatory approvals.
CPPIB and Brookfield, meanwhile, must also strike agreements with would-be customers for the facility. However, he said he is sure a deal would be finalized “in a very orderly way.”
Transalta envisions future data-centre projects powered by two of its generating plants that are currently mothballed - Sundance 6, near the Keephills site, and Sheerness 1, northeast of Calgary.
“Just those two units alone provide a pretty clear path where we could certainly be able to ramp up and meet the up to one gigawatt that we’re contemplating under the terms of the MOU that we’ve done with our two partners,” said Mr. Kousinioris, who is set to retire this year. He is being replaced at the helm by current chief financial officer Joel Hunter.
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Mr. Kousinioris said he expects the AESO to announce its next tranche of data-centre power providers by midyear.
TransAlta shares rose more than 5 per cent to $18.75 on Friday following the data-centre announcement and release of financial results for the last quarter of 2025.
Bank of Nova Scotia analyst Robert Hope said the stock market took a positive view of the long-awaited MOU.
“TransAlta’s partners, Brookfield and CPP Investments, are well known, large-scale data centre investors, which gives us incremental confidence that the project will proceed and be expanded beyond its initial 230 MW phase,” Mr. Hope wrote in a note to clients.
Brookfield has plans to invest US$200-billion in what it calls “AI factories” in North America, Europe and Britain over several years.
The asset manager has an 11.2-per-cent interest in TransAlta, according to S&P Capital IQ.
Meanwhile, TransAlta reported a net loss of $62-million or 21 cents a share in the fourth quarter, compared with a year-earlier loss of $65-million or 22 cents a share.
The company generated adjusted earnings before taxes, depreciation and amortization of $247-million, down $35-million from the fourth quarter of 2024. It blamed the drop on lower power prices in Alberta and the U.S. Pacific Northwest and a drop in market volatility, which hurt its energy-marketing results.