Document Number: 205



205: Policy for the Provision of Non-Audit
Services by the Corporation’s Auditors



Applies to TransAlta Corporation and all
Subsidiaries



|Approved by: Executive Vice President & CFO TransAlta
      Corporation
      Effective Date: 2004/05/14
      Content
      & Interpretation: Vice President & Comptroller, TransAlta
      Corporation
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



INTRODUCTION



The intent of this policy is to outline the services TransAlta
will and will not seek to be provided from its auditors to ensure compliance
with statutory and regulatory requirements.  The underlying principle shall
be that the auditors will not be engaged to perform services on which they will
ultimately be required to provide an audit opinion on.



RESPONSIBILITY



Vice President and Comptroller is responsible for ensuring the
policy is in compliance with statutory and regulatory requirements.



Directors of Financial Operations and Country Financial
Controllers are responsible for ensuring their respective business units /
countries comply with the policy.



All staff should be aware of the policy and be in
compliance.



POLICY



In general, audit, audit-related and tax compliance services may
be provided by the corporation’s auditors.  Consulting engagements will not
be provided by the corporation’s auditors, nor will engagements where fees are
contingent on success.  Specific examples are set out below.





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|May Be Provided by the Corporation's
      Auditors (subject to approval process) | Will Not Be Provided by the
      Corporation's Auditors                    
|--------------------------------------------------------------------------------- | ----------------------------------------------------------------------------
|Audit                                                                             | Audit-related                                                               
|                                                                                  |                                                                             
|Consolidated financial statements                                                 | Local statutory financial statement audits                                  
|                                                                                  |                                                                             
|Quarterly reviews                                                                 | Pension plan audits                                                         
|                                                                                  | Regulatory audits                                                           
|                                                                                  |                                                                             
|                                                                                  | Prospectuses and registration documents                                     
|                                                                                  |                                                                             
|                                                                                  | Accounting advice                                                           
|                                                                                  |                                                                             
|                                                                                  | Co-sourced internal audits used for internal &
      external audit purposes
|                                                                                  | - Treasury  / EM risk management reviews                                    
|                                                                                  | - IT security reviews                                                       
|                                                                                  |                                                                             
|                                                                                  | French translation                                                          
|                                                                                  |                                                                             
|                                                                                  |                                                                             
|                                                                                  |                                                                             
|                                                                                  |                                                                             
|                                                                                  |                                                                             
|                                                                                  |                                                                             



It is intended that total non-audit fees should not exceed audit
and audit-related fees in total in any one financial year.



APPROVAL PROCESS



All audit or non-audit services to be performed by the
corporation’s auditors require pre-approval by the Audit and Environment
Committee, TransAlta Corporation, before any work is started.



The Audit and Environment Committee may delegate the authority to
grant pre-approvals.  The Audit and Environment Committee member to whom
this authority is delegated must also be an independent member of the Board.
 Any

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services pre-approved under this delegated process must be
presented to the full Audit and Environment Committee at the next scheduled
meeting.



Boards of Directors of subsidiary companies are required to
approve all services, irrespective of fee level, to be performed by the auditor
and these services are subject to final approval by the TransAlta Corporation
Audit and Environment Committee.



Approvals shall be evidenced in writing and maintained by the VP
& Comptroller.  Subsidiary companies are required to submit their
approvals to the VP & Comptroller for filing and presentation to the
TransAlta Corporation Audit and Environment Committee.



REPORTING PROCESS



A summary of all approved work shall be presented to the Audit
Committee at each quarterly meeting.



The Vice President and Comptroller is responsible for preparing
and presenting this information.