TRANSALTA
CORPORATION  2009
RENEWAL ANNUAL INFORMATION FORM  FOR THE
YEAR ENDED DECEMBER 31, 2008    MARCH 16,
2009


-
i -   TABLE OF CONTENTS  PRESENTATION OF INFORMATION
  1SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
  1DOCUMENTS INCORPORATED BY REFERENCE
  1CORPORATE STRUCTURE
  2OVERVIEW
  3GENERAL DEVELOPMENT OF THE BUSINESS
  4BUSINESS OF TRANSALTA
  8Generation Business Segment
  8Commercial Operations and Development
  16ENVIRONMENTAL RISK MANAGEMENT
  19RISK FACTORS
  22EMPLOYEES
  28CAPITAL STRUCTURE
  29CREDIT RATINGS
  30DIVIDENDS
  30MARKET FOR SECURITIES
  31DIRECTORS AND OFFICERS
  31INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
  37INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR
  OFFICERS
  37CORPORATE CEASE TRADE ORDERS, BANKRUPTCIES OR SANCTIONS
  37CONFLICTS OF INTEREST
  38LEGAL PROCEEDINGS AND REGULATORY ACTIONS
  38TRANSFER AGENT AND REGISTRAR
  39INTERESTS OF EXPERTS
  39ADDITIONAL INFORMATION
  39AUDIT AND RISK COMMITTEE
  39APPENDIX A
  A-1APPENDIX B
  B-1


- 1 -   PRESENTATION
OF INFORMATION  Unless otherwise noted, the information contained in this annual
information form (Annual Information Form)
is given as at or for the year ended December 31, 2008.  Amounts are expressed in Canadian dollars
unless otherwise indicated.  Financial
information is presented in accordance with Canadian generally accepted
accounting principles.  SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS  This Annual Information
Form, the documents incorporated herein by reference, and other reports and
filings made with the securities regulatory authorities, include
forward-looking statements.  All forward
looking statements are based on TransAltas beliefs as well as assumptions
based on information available at the time the assumption was made.  Forward looking statements are not facts, but
only predictions and generally can be identified by the use of statements that
include phrases such as may, will, believe, expect, anticipate, intend,
plan, foresee, potential, enable, continue or other comparable terminology.  These statements are not guarantees of
TransAltas future performance and are subject to risks, uncertainties and
other important factors that could cause TransAltas actual performance to be
materially different from those projected.  Factors that may adversely
impact the Corporations
forward looking statements include risks relating to: (i) fluctuations in
market prices and availability of fuel supplies required to generate
electricity and in the price of electricity; (ii) the regulatory and
political environments in the jurisdictions in which the Corporation operates; (iii) environmental
requirements and changes in, or liabilities under, these requirements; (iv) changes
in general economic conditions including interest rates; (v) operational
risks involving the Corporations facilities, including unplanned outages at
such facilities; (vi) disruptions in the transmission and distribution of
electricity; (vii) disruptions in the source of fuels or water required to
operate the Corporations facilities; (viii) trading risks; (ix) fluctuations
in the value of foreign currencies and foreign political risks; (x) need
for additional financing; (xi) liquidity risk; (xii) structural
subordination of securities; (xiii) counterparty credit risk;
(xiv) insurance risk; (xv) the Corporations provision for income
taxes; (xvi) legal proceedings involving the Corporation;
(xvii) reliance on key personnel and (xviii) labour relations matters
and (xix) absence of a public market for certain of the securities offered.  The foregoing risk factors, among others, are
described in further detail under the heading Risk Factors in this Annual
Information Form and in the documents incorporated by reference in this
Annual Information Form, including the TransAlta Managements Discussion and
Analysis for the year ended December 31, 2008 (the Annual MD&A).  Readers are urged to consider these factors carefully in evaluating the
forward looking statements and are cautioned not to place undue reliance on
these forward looking statements. The forward looking statements included in
this document are made only as of the date hereof and the Corporation does not
undertake to publicly update these forward looking statements to reflect new
information, future events or otherwise, except as required by applicable
laws.  In light of these risks,
uncertainties and assumptions, the forward looking events might or might not
occur.  The Corporation cannot assure you
that projected results or events will be achieved.  DOCUMENTS
INCORPORATED BY REFERENCE  TransAltas Audited Consolidated Financial Statements for the year
ended December 31, 2008 and the Annual MD&A are hereby specifically
incorporated by reference in this Annual Information Form.  Copies of these documents are available on SEDAR
at www.sedar.com.


- 2 -   CORPORATE
STRUCTURE  Name and Incorporation  TransAlta Corporation was formed by Certificate of
Amalgamation issued under the Canada Business
Corporations Act on October 8, 1992.  On December 31, 1992, a Certificate of
Amendment was issued in connection with a plan of arrangement involving the
Corporation and TransAlta Utilities Corporation (TransAlta
Utilities or TAU) under the
Canada Business Corporations Act.  The plan of arrangement, which was approved
by shareholders on November 26, 1992, resulted in common shareholders of
TransAlta Utilities exchanging their common shares for shares of TransAlta on a
one-for-one basis.  Upon completion of
the arrangement, TransAlta Utilities became a wholly-owned subsidiary of
TransAlta.  On January 1, 2009,
TransAlta was issued a Certificate of Amalgamation under the Canada Business Corporations Act in connection with the
amalgamation of TransAlta Corporation, TransAlta Utilities, TransAlta Energy
Corporation (TransAlta Energy or TEC) and Keephills 3 GP Ltd.  The amalgamation was completed as part of a
series of transactions involving TransAlta and certain of its subsidiaries and
affiliates carried out to reorganize (the Reorganization)
TransAltas interest in certain of its assets.  The registered office and principal place of business of TransAlta is
at 110 - 12th Avenue S.W., Calgary,
Alberta, Canada, T2R 0G7.  Intercorporate Relationships  Effective January 1, 2009, the Corporation
completed an internal reorganization whereby the assets and business affairs of
TAU and TEC (with the exception of the wind business) were transferred to
TransAlta Generation Partnership, a new Alberta general partnership, whose
partners are TransAlta Corporation and TransAlta Generation Ltd., a
wholly-owned subsidiary of TransAlta Corporation. TransAlta Generation
Partnership is managed by TransAlta Corporation pursuant to the terms of the
partnership agreement and a management services agreement.  Immediately following the transfer of assets
by TAU and TEC to TransAlta Generation Partnership, TransAlta Corporation
amalgamated with TAU, TEC, and Keephills 3 GP Ltd. pursuant to the Canada Business Corporations Act.  TransAlta remains the holding entity of the
various businesses of the Corporation, some of which are now held directly, in
the case of the wind assets, and some of which are now held indirectly, in the
case of the former generation assets and businesses of TAU and TEC.  As of January 1, 2009, the principal subsidiaries of the
Corporation and their respective jurisdictions of formation are set out below.


- 3 -   Unless the context otherwise requires, all references
to the Corporation and to TransAlta herein refer to TransAlta Corporation
and its subsidiaries on a consolidated basis. 
References to TransAlta Corporation herein refer to TransAlta
Corporation, excluding its subsidiaries.   OVERVIEW  TransAlta and its predecessors have been engaged in the production and
sale of electric energy since 1909.  The
Corporation is among Canadas largest non regulated electricity generation and
energy marketing companies with an aggregate net ownership interest of 7,976
megawatts (MW) of generating capacity1 operating in facilities having approximately 9,697MW of aggregate generating capacity. In addition, the
Corporation has facilities under construction with a net ownership interest of
456 MW, of an aggregate generating capacity of 681 MW.  The Corporation is focused on generating
electricity in Canada, the United States and Australia through its diversified
portfolio of facilities fuelled by coal, gas, hydroelectric, wind and
geothermal resources.  In Canada, the Corporation holds a net ownership interest of 5,661 MW
of electrical generating capacity in thermal, gas-fired, wind-powered and
hydroelectric facilities, including 4,937 MW in Western Canada, 628 MW in
Ontario and 96 MW in New Brunswick.  In the United States, the Corporations principal facilities include a1,376 MW thermal facility and a 248 MW gas-fired facility,
both located in Centralia, Washington, which supply electricity to the Pacific
northwest. The Corporation also holds a 50 per cent interest in CE Generation,
LLC (CE Generation), through which it has
an aggregate net ownership interest of approximately 385 MW of generating
capacity in geothermal facilities in California and gas-fired facilities in
Texas, Arizona and New York. In addition, the Corporation also has 6 MW of
electrical generating capacity through hydroelectric facilities located in
Washington and Hawaii.  In Australia, the Corporation has 300MW
of net electrical generating capacity from gas-fired generation facilities.  The Corporation regularly reviews its operations in order to optimize
its generating assets and evaluates appropriate growth opportunities.  The Corporation has in the past and may in
the future make changes and additions to its fleet of coal, gas, hydro, wind
and geothermal fuelled facilities.  The Corporation is organized into two business segments: Generation and
Commercial Operations and Development. The Generation group is responsible for
constructing, operating and maintaining electricity generation facilities.  The Commercial Operations and Development
group is responsible for managing the sale of production, purchasing natural
gas, transmission capacity and market risks associated with the Corporations
generation assets and for non asset backed trading activities.  Both segments are supported by a corporate
group that provides finance, treasury, legal, regulatory, environmental, health
and safety, sustainable development, corporate communications, government
relations, information technology, human resources, internal audit, and other
administrative support.   
 1TransAlta measures capacity as
the net maximum capacity that a unit can sustain over a period of time, which
is consistent with industry standards. 
All capacity amounts are as of the date of this Annual Information Form and
represent capacity owned and operated by the Corporation unless otherwise
indicated.


- 4 -   GENERAL
DEVELOPMENT OF THE BUSINESS  The significant events and conditions affecting TransAltas business
during the three most recently completed financial years are summarized
below.  Certain of these events and
conditions are discussed in greater detail under the heading Business of
TransAlta in this Annual Information Form.  Recent Developments  ·On February 10, 2009, the
Corporation reported that the 406 MW Sundance 4 facility had experienced an
unplanned outage in December 2008 relating to the failure of an induced
draft fan.  At the time, the unit was
derated to approximately 205 MW.  The
repair of the fan components by the original equipment manufacturer took longer
than planned and, therefore, Unit 4 did not return to full service until February
23, 2009.  As a result of the extended
derate, first quarter production was reduced by 328GWh and net income declined
by $17 million.  The Corporation has
given notice of a High Impact Low Probability Event to the PPA Buyer and the
Balancing Pool which, if successful, will protect the Corporation from the
financial loss and related penalties. 
The available penalties that the Corporation expects to recover in net
income are anticipated to be $14 million.  ·On January 29, 2009, the
Board of Directors of the Corporation declared a quarterly dividend of $0.29
per common share, payable April 1, 2009 to holders of record on March 1,
2009.  This represents a $0.02 per share
increase in the quarterly dividend, yielding on an annualized basis a dividend
of $1.16 per share.  ·On January 29, 2009, the
Corporation announced that it will be proceeding with the addition of two 23 MW
efficiency uprates at its Keephills plant in Alberta. Both Keephills units 1
and 2 will be upgraded to 406 MW and are expected to be operational by the end
of 2011 and 2012, respectively. The total capital cost of the projects is estimated
at $68 million.  ·Effective January 1,
2009, the Corporation completed an internal reorganization whereby the assets
and business affairs of TAU and TEC (with the exception of the wind business)
were transferred to TransAlta Generation Partnership, a new Alberta general partnership,
whose partners are TransAlta and TransAlta Generation Ltd., a wholly-owned
subsidiary of TransAlta. TransAlta Generation Partnership is managed by
TransAlta pursuant to the terms of the partnership agreement and a management
services agreement.  Immediately
following the transfer of assets by TAU and TEC to TransAlta Generation
Partnership, TransAlta Corporation amalgamated with TAU, TEC, and Keephills 3
GP Ltd. pursuant to the Canada Business
Corporations Act.  TransAlta
remains the holding entity of the various businesses of the Corporation, some
of which are now held directly, in the case of the wind assets, and some of
which are now held indirectly, in the case of the former generation assets and
businesses of TAU and TEC.  Year Ended December 31, 2008  ·On December 31, 2008, the
Corporation announced that the 96 MW, $170 million Kent Hills Wind Farm had
begun commercial operation.  The wind
farm consists of 32 Vestas V90, 3MW wind turbines.  The capacity from this project is sold under
a power purchase agreement with New Brunswick Power Distribution and Customer
Service Corporation (New Brunswick Power).  ·On October 8, 2008, the
Corporation announced the completion of the sale of its Mexican businesses to
Intergen Global Ventures B.V. II for a sale price of US$303.5 million.  The sale included the 252 MW gas/diesel
combined cycle gas plant in Campeche, a 259 MW combined cycle gas plant in
Chihuahua and all associated commercial arrangements.


- 5 -   ·On May 27, 2008, the
Corporation announced that, commencing in 2009, it would be constructing
another 66 MW wind generation facility in southern Alberta, consisting of 22
Vestas V90 3 MW wind turbines.  The total
capital cost for this expansion of the Summerview wind power project is
expected to be $123 million.  The
capacity from this project is expected to be sold on the Alberta Power Pool.  ·On May 5, 2008, the
Corporation announced that it had received regulatory approval from the Toronto
Stock Exchange (TSX) for the continuation of its
normal course issuer bid (NCIB)
program.  Under the NCIB program, the
Corporation has approval to purchase, for cancellation, up to 19.9 million of
its common shares, representing 10 per cent of its public float as of April 23,
2008.  ·On April 21, 2008, the
Corporation announced a 53 MW efficiency uprate at Unit 5 of its Sundance
facility. The total capital cost of the project is estimated at $75 million
with commercial operations expected to commence by the end of 2009.  ·On April 3, 2008,
TransAlta announced a partnership with Alstom LLC to develop a one million
tonne/year carbon capture and storage project at one of TransAltas coal-fired
power stations in Alberta.  This project
has been shortlisted by the Alberta Government for contributory funding as part
of the provinces $2 billion carbon capture and storage (CCS)
program, with a decision expected by June 30, 2009.  ·On February 20, 2008, the
Corporation announced it had signed a purchase and sale agreement with Intergen
Global Ventures B.V. pursuant to which Intergen agreed to pay the Corporation
US$303.5 million in cash for its Mexican assets.  ·On February 13, 2008, the
Corporation announced that, commencing in 2009, it would be constructing a 66
MW wind generation facility in southern Alberta, consisting of 22 Vestas V90 3
MW wind turbines.  The total capital
costs for this Blue Trail wind power project is expected to be $115
million.  The capacity from this project
is expected to be sold on the Alberta Power Pool.  ·On February 1, 2008, the
Board of Directors of the Corporation declared a quarterly dividend of $0.27
per common share, payable April 1, 2008 to holders of record on March 1,
2008.  This represents a $0.02 per share
increase in the quarterly dividend, yielding on an annualized basis a dividend
of $1.08 per share.  Year Ended December 31, 2007  ·During the third quarter, the
Corporation completed an uprate on the Sundance Unit 4 facility.  A final measurement took place in the fourth
quarter of 2007 and the generating capacity added as a result of this uprate
was 53 MW.  ·On September 11, 2007,
the Corporation announced it had received regulatory approval to increase the
number of shares it may purchase under its NCIB program.  As a result, the Corporation was authorized
to purchase for cancellation up to 20.2 million shares or approximately 10 per
cent of the 202 million common shares issued and outstanding as of April 23,
2007.  ·On July 17, 2007, the
Corporation amended the power purchase agreement with New Brunswick Power to
increase capacity at its Kent Hills wind power facility from 75 MW to 96
MW.  As a result, total capital costs for
the Kent Hills project will also increase by $40 million, from $130 million to
$170 million. The Corporation also signed a purchase and sale agreement with
Vector Wind Energy,


- 6 -   a
wholly owned subsidiary of Canadian Hydro Developers Inc., to acquire its
Fairfield Hill wind power site, including an option to develop the site at a
future date.  ·On June 21, 2007,
TransAlta Utilities entered into an agreement with Bucyrus Canada Limited and
Bucyrus International Inc. for the purchase of a dragline to be used primarily
in the supply of coal for the Keephills 3 joint venture project. The total
dragline purchase costs are approximately $150 million, with final payments for
goods and services due by May 2010. The total payments made under this
agreement in 2007 were $18 million.  ·On February 26, 2007, the
Corporation and EPCOR Power Development Corporation (EPCOR)
announced that they were proceeding with building the 450 MW Keephills 3 power
project located approximately 70 kilometres west of Edmonton, Alberta.  The capital cost for the project, including
mine capital, is expected to be approximately $1.6 billion and is expected to
be completed at the end of the first quarter of 2011. Through the Keephills 3
Limited Partnership (K3LP), an
affiliate of the Corporation, TransAlta and EPCOR will be equal partners in the
ownership of Keephills 3, with TransAlta responsible for managing the joint
venture and EPCOR responsible for the construction.  Upon completion, it is expected that
TransAlta will operate the facility and EPCOR and TransAlta will independently
dispatch and market their share of the units electrical output.  The project has received approval from the
Alberta Energy and Utilities Board and from Alberta Environment.  ·On January 19, 2007, the
Corporation announced that it had been awarded a 25-year Power Purchase
Agreement (PPA) to provide 75 MW of wind
power to New Brunswick Power.  Under the
agreement, TransAlta will construct, own and operate a wind power facility in
New Brunswick.  The capital cost of the
project is estimated to be $130 million. 
The project is subject to regulatory and environmental approvals and is
expected to begin commercial operations by the end of 2008.  Natural Forces Technologies Inc., an Atlantic
Canada based wind developer, is TransAltas co-development partner in this
project.  ·On January 2, 2007, the
Corporation redeemed, at par, all of its outstanding 7.75 per cent preferred
securities, with an outstanding principal amount of $175 million.  Year ended December 31, 2006  ·On December 18, 2006,
TransAlta Utilities assigned its rights in the development agreement it held
with EPCOR, governing the joint development of the Keephills 3 power project,
to K3LP.  K3LP subsequently sold a 50 per
cent undivided interest in the Keephills 3 power project to the EPCOR Power
Development (K3) Limited Partnership and has entered into a joint venture
agreement governing the continued development of the Keephills 3 power
project.  In the event the Keephills 3
power project proceeds to operation, it is anticipated that TransAlta will be
the operator of the project pursuant to an operations and maintenance agreement
and coal supply agreement.  ·On November 27, 2006,
TransAlta announced it would immediately stop mining operations at its
Centralia, Washington coal-mine. 
TransAlta also announced that it had entered into agreements to purchase
and transport coal from the Powder River Basin to fuel TransAltas Centralia
thermal facility.  ·On November 17, 2006,
TransAlta Utilities entered into a settlement agreement with Canadian National
Railway Company for a portion of outstanding claims for lost margin and
incremental expenses relating to the train derailment and resulting oil spill
into Lake Wabamun in 2005.  The terms of
the settlement are subject to a confidentiality agreement and cannot be disclosed.


- 7 -   ·On February 17, 2006, a
wholly-owned subsidiary of TransAlta, together with a subsidiary of
Mid-American Energy Company (Mid-American),
entered into an agreement to purchase a 10 MW hydro facility in Hawaii to be
held directly by the Wailuku Holding Company LLC, a company jointly and equally
owned by TransAlta and Mid-American.  ·On February 15, 2006,
TransAlta announced it had signed a five-year agreement with the Ontario Power
Authority (OPA) for the supply of
electricity from TransAltas Sarnia Regional Cogeneration Power Plant.  Under the terms of the agreement, Transalta
will be available to supply an average of 400 MW of electricity to the Ontario
electricity market.  The supply contract
is effective until December 31, 2010.  ·On February 1, 2006,
TransAlta Utilities entered into a development agreement with EPCOR to jointly
pursue the Keephills 3 power project. 
Keephills 3 is a proposed 450 MW facility adjacent to TransAltas existing
Keephills facility, approximately 70 kilometres west of Edmonton, Alberta.


- 8 -   BUSINESS
OF TRANSALTA  Generation
Business Segment  The following table summarizes the Corporations generation facilities
which are operating, under construction or under development, as at January 31,
2009:  Region
  
  Facility
  
  Capacity 
  (MW)
  
  Ownership 
  (%)
  
  Net Capacity 
  Ownership 
  Interest
  
  Fuel
  
  Revenue Source
  
  Contract 
  Expiry DateWestern
  
  Canada 
  (28 Facilities)
  
  Sundance(1)
  
  2,126
  
  100
  
  2,126
  
  Coal
  
  Alberta
  PPA / Merchant(2)
  
  2017,
  2020Keephills(3)
  
  812
  
  100
  
  812
  
  Coal
  
  Alberta
  PPA
  
  2020Sheerness
  
  780
  
  25
  
  195
  
  Coal
  
  Alberta
  PPA
  
  2020Wabamun
  
  279
  
  100
  
  279
  
  Coal
  
  Merchant
  
  -Genesee 3
  
  450
  
  50
  
  225
  
  Coal
  
  Merchant
  
  -Keephills
  3(4)
  
  450
  
  50
  
  225
  
  Coal
  
  Merchant
  
  -Fort Saskatchewan
  
  118
  
  30
  
  35
  
  Gas
  
  Long-term
  contract(LTC)
  
  2019Meridian
  
  220
  
  25
  
  55
  
  Gas
  
  LTC
  
  2024Poplar Creek
  
  356
  
  100
  
  356
  
  Gas
  
  LTC/Merchant
  
  2024Hydro
  assets(5)
  
  801
  
  100
  
  801
  
  Hydro
  
  Alberta
  PPA
  
  2013-2020Castle
  River(6)
  
  44
  
  100
  
  44
  
  Wind
  
  LTC/Merchant
  
  2011McBride Lake
  
  75
  
  50
  
  38
  
  Wind
  
  LTC
  
  2024Summerview
  1(7)
  
  70
  
  100
  
  70
  
  Wind
  
  Merchant
  
  -Blue
  Trail(4)
  
  66
  
  100
  
  66
  
  Wind
  
  Merchant
  
  -Summerview
  2(4)
  
  66
  
  100
  
  66
  
  Wind
  
  Merchant
  
  -Total
  Western Canada
  
  6,713
  
  
  
  5,393Mississauga
  
  108
  
  50
  
  54
  
  Gas
  
  LTC
  
  2017Eastern
  
  Ottawa
  
  68
  
  50
  
  34
  
  Gas
  
  LTC
  
  2012Canada
  
  Windsor
  
  68
  
  50
  
  34
  
  Gas
  
  LTC/Merchant
  
  2016(5 Facilities)
  
  Sarnia(8)
  
  506
  
  100
  
  506
  
  Gas
  
  LTC/Merchant
  
  2022Kent Hills
  
  96
  
  100
  
  96
  
  Wind
  
  PPA
  
  2033Total
  Eastern 
  Canada
  
  846
  
  
  
  724Centralia(9)
  
  1,376
  
  100
  
  1,376
  
  Coal
  
  Merchant
  
  -Centralia Gas
  
  248
  
  100
  
  248
  
  Gas
  
  Merchant
  
  -Power Resource
  
  212
  
  50
  
  106
  
  Gas
  
  Merchant
  
  -Saranac
  
  240
  
  37.5
  
  90
  
  Gas
  
  LTC
  
  2009United States
  
  Yuma
  
  50
  
  50
  
  25
  
  Gas
  
  LTC
  
  2024(17 Facilities)
  
  Imperial
  Valley Geothermal Facilities(10)
  
  327
  
  50
  
  164
  
  Geothermal
  
  LTC/Merchant
  
  2016-2029Skookumchuk
  
  1
  
  100
  
  1
  
  Hydro
  
  -
  
  -Wailuku
  
  10
  
  50
  
  5
  
  Hydro
  
  LTC
  
  2023Total US
  
  2,464
  
  
  
  2,015Australia
  
  Parkeston
  
  110
  
  50
  
  55
  
  Gas
  
  LTC
  
  2016(5 Facilities)
  
  Southern
  Cross(11)
  
  245
  
  100
  
  245
  
  Gas/Diesel
  
  LTC
  
  2013Total Australia
  
  355
  
  
  
  300Total
  
  
  
  10,378
  
  
  
  8,432  Notes: (1)Includes a 53 MW uprate
expected to be commercial in 2009. (2)Merchant capacity refers to 53
MW and 44 MW uprates on units 4 and 6, respectively. (3)Includes two 23 MW uprates on
units 1 and 2 expected to be commercial in 2011, and 2012, respectively. (4)These facilities are currently
under development. (5)Comprised of 13 facilities.


- 9 -   (6)Includes 7 individual turbines
at other locations. (7)Comprised of 2 facilities. (8)Sarnias net maximum capacity
(NMC) has been adjusted from 575 MW due
to decommissioning of equipment at the facility. (9)Centralia Thermals NMC has
been reduced from 1,404 MW to reflect a lower plant output as a result of its
conversion to burning Powder River Basin coal. (10)Comprised of 10 facilities. (11)Comprised of 4 facilities.  Canada:  Alberta  Thermal
facilities  The following table summarizes the Corporations western Canadian
thermal generation facilities:  Location
  
  Plant
  
  Capacity
  (MW)
  
  Ownership
  (%)
  
  Commissioning DatesWabamun(1)
  
  Wabamun Unit No. 4
  
  279
  
  100
  
  1968Sundance
  
  Sundance Unit No. 1
  
  280
  
  100
  
  1970Sundance Unit No. 2
  
  280
  
  100
  
  1973Sundance Unit No. 3
  
  353
  
  100
  
  1976Sundance Unit No. 4
  
  406
  
  100
  
  1977Sundance Unit No. 5(2)
  
  406
  
  100
  
  1978Sundance Unit No. 6
  
  401
  
  100
  
  1980Keephills
  
  Keephills
  Unit No. 1(3)
  
  406
  
  100
  
  1983Keephills Unit No. 2(3)
  
  406
  
  100
  
  1984Keephills Unit No. 3(4)
  
  450
  
  50
  
  2011Sheerness
  
  Sheerness
  Unit No. 1
  
  390
  
  25
  
  1986Sheerness Unit No. 2
  
  390
  
  25
  
  1990Genesee
  
  Genesee 3
  
  450
  
  50
  
  2005Total
  
  
  
  4,897  Notes: (1)Wabamun unit 4 is expected to
be removed from service upon the expiry of its license in 2010. (2)Includes a 53 MW uprate
expected to be commercial in 2009. (3)Includes two 23 MW uprates on
units 1 and 2 expected to be commercial in 2011, and 2012, respectively. (4)This facility is currently
under development.  The Keephills, Sundance and Wabamun facilities (the Alberta thermal plants) are located approximately 70
kilometres west of Edmonton, Alberta and are owned by TransAlta.  The Sheerness facility is jointly owned by
TransAlta Cogeneration, L.P. (TA Cogen), an
Ontario limited partnership, and ATCO Power (2000) Ltd. (ATCO Power).
The Genesee facility is jointly owned by TransAlta and EPCOR.  TransAltas thermal plants are generally base
load plants, meaning that they are expected to operate for long periods of time
at or near their rated capacity. 
Availability is an important measure of the economic success of a thermal
plant. The weighted equivalent availability factor for the Alberta thermal
plants in 2008 was 82.9 per cent compared with 87.1 per cent in 2007 and 88.7
per cent in 2006.  For the Sheerness
facility, the weighted equivalent availability factor was 94.1 per cent in 2008
compared to 94.4 per cent in 2007 and 92.2 per cent in 2006.  For the Genesee 3 facility, the weighted
equivalent availability factor was 78.2 per cent in 2008 compared to 92.9 per
cent in 2007 and 96.9 per cent in 2006.  Fuel requirements for TransAltas thermal power facilities are supplied
by surface strip coal-mines located in close proximity to the facilities.  TransAlta owns two surface mines in Alberta
that supply coal to its Alberta thermal plants. 
The Whitewood mine supplies the Wabamun plant and the Highvale mine
supplies the Sundance and Keephills facilities. 
TransAlta estimates that the recoverable coal reserves contained in
these mines are expected to be sufficient to supply the anticipated requirements
for the life of these facilities including running post PPA expiry and plant
expansion.  Coal for the Sheerness facility is provided from the adjacent Sheerness
mine.  The coal reserves of the mine are
owned, leased or controlled jointly by TA Cogen, ATCO Power and Prairie Mines &
Royalties Limited (PMRL).


- 10 -   TA Cogen and ATCO Power have entered into coal supply agreements with
PMRL, which operates the mine, to supply coal until 2026.  Coal for the Genesee 3 facility is provided from the adjacent Genesee
mine.  The coal reserves of the mine are
owned, leased or controlled jointly by PMRL and EPCOR.  The Corporation has entered into coal supply
agreements with PMRL, which operates the mine, to supply coal for the life of
the facility.  In February 2001, the Corporation announced a proposal for a 900
MW expansion at its Keephills facility. 
Although the Corporation received regulatory approval to proceed with
the expansion, an application was made, in December 2004, to the AEUB to
amend its 900 MW permit to allow for the construction of a smaller 450 MW
facility using improved technology.  On February 1, 2006, the Corporation entered into a development
agreement with EPCOR to jointly pursue the 450 MW Keephills 3 power
project.  On December 18, 2006, the
Corporation assigned its rights in the development agreement which it held with
EPCOR for the joint development of the Keephills 3 power project to K3LP, an
affiliate of the Corporation.  K3LP
subsequently sold a 50 per cent undivided interest in the Keephills 3 power
project to the EPCOR Power Development (K3) Limited Partnership and has entered
into a joint venture agreement governing the continued development of the
Keephills 3 power project.  The project
received approval from the Alberta Energy and Utilities Board and from Alberta
Environment.  On February 26, 2007, the Corporation and EPCOR commenced
construction of the net 450 MW Keephills 3 power project.  The capital cost for the project, including
mine capital, is expected to be approximately $1.6 billion and is expected to
be completed at the end of the first quarter of 2011.  Through K3LP, TransAlta and EPCOR will be
equal partners in the ownership of Keephills 3, with TransAlta responsible for
managing the joint venture and EPCOR responsible for construction.  Upon completion, it is expected that
TransAlta will operate the facility and EPCOR and TransAlta will independently
dispatch and market their share of the units electrical output.  The Corporation will also provide coal to the
facility through the Highvale mine.  On January 29,
2009, the Corporations estimate of total costs for Keephills 3 increased by
$73 million, due to higher material and labour costs, for a total projected
cost of $1.7 billion.  The Corporation
continues to monitor the costs and will look for opportunities to reduce the
cost increases.  Gas
fired facilities  The following table summarizes the Corporations western Canadian gas
fired generation facilities:  Location
  
  Plant
  
  Capacity
  (MW)
  
  Ownership
  (%)
  
  Commissioning DatesLloydminster, SK
  
  Meridian
  
  220
  
  25
  
  1999Fort McMurray, AB
  
  Poplar Creek
  
  356
  
  100
  
  2001Fort Saskatchewan, AB
  
  Fort
  Saskatchewan
  
  118
  
  30
  
  1999Total
  
  
  
  694  The Corporations interests in the Meridian and Fort Saskatchewan
facilities are held through TA Cogen. 
See TA Cogen.  The Meridian plant is located in Lloydminster, Saskatchewan and is
owned by TA Cogen and Husky Oil Operations Limited. The Meridian plant sells
electricity to Saskatchewan Power Corporation, a Crown corporation owned by the
Province of Saskatchewan, and steam to a heavy oil upgrader in Lloydminster,
Saskatchewan.  The Poplar Creek plant is located in Fort McMurray, Alberta and is
owned by the Corporation.  This 356 MW
cogeneration plant became fully operational in the first quarter of 2001 and
delivers approximately 200 MW of electricity and steam to Suncor Energy Inc. (Suncor).  Any surplus
power not used by Suncor is available for sale


- 11 -   by the Corporation to other parties, in which case Suncor is entitled
to a share of that revenue, under certain conditions.  The Fort Saskatchewan plant is located in Fort Saskatchewan, Alberta
and is owned by TA Cogen and Air Liquide Canada Inc.  The 118 MW Fort Saskatchewan gas fired
combined cycle cogeneration plant in Alberta provides electricity and steam to
Dow Chemical Canada Inc.  Hydroelectric
facilities  The following table summarizes the Corporations western Canadian
hydroelectric facilities:  Location
  
  Plant
  
  Capacity
  (MW)
  
  Ownership
  (%)
  
  Commissioning
  DatesBow River System
  
  Horseshoe
  
  14
  
  100
  
  1911Kananaskis
  
  19
  
  100
  
  1913, 1951Ghost
  
  51
  
  100
  
  1929, 1954Cascade
  
  36
  
  100
  
  1942, 1957Barrier
  
  13
  
  100
  
  1947Bearspaw
  
  17
  
  100
  
  1953, 1954Pocaterra
  
  15
  
  100
  
  1955Interlakes
  
  5
  
  100
  
  1955Spray
  
  103
  
  100
  
  1951, 1960Three Sisters
  
  3
  
  100
  
  1951Rundle
  
  50
  
  100
  
  1951, 1960100North Saskatchewan
  River
  System
  
  Brazeau
  
  355
  
  100
  
  1965, 1967Bighorn
  
  120
  
  100
  
  1972Total
  
  
  
  801  The Corporations hydroelectric facilities are primarily peaking
plants, meaning they are generally only operated during times of peak demand.  Wind Generation
Facilities  The following table summarizes the Corporations wind generation
facilities:  Location
  
  Plant
  
  Capacity
  (MW)
  
  Ownership
  (%)
  
  Commissioning DatesFort MacLeod
  
  McBride Lake
  
  75
  
  50
  
  2003Pincher Creek
  
  Castle River and
  Other
  
  44
  
  100
  
  1997  2001Pincher Creek
  
  Summerview 1
  
  70
  
  100
  
  2004New Brunswick
  
  Kent Hills
  
  96
  
  100
  
  2008Fort Macleod
  
  Blue Trail(1)
  
  66
  
  100
  
  2009Pincher Creek
  
  Summerview 2(1)
  
  66
  
  100
  
  2010Total
  
  
  
  417  Note: (1)Facility under development
reflects expected capacity and commissioning date.  The Corporation owns and operates approximately 248 MW of net capacity
(excluding facilities under development) and operates approximately 285 MW of
capacity primarily in three wind farms in southwestern Alberta and one in New
Brunswick.  Castle River is a 40 MW facility comprised of 59 Vestas V47 (660 kW)
turbines and 1 Vestas V44 (600 kW) turbine located at Pincher Creek,
Alberta.  The facility is 71 per cent
contracted primarily to ENMAX Energy Corp.


- 12 -   (ENMAX) and is the sole Green Energy®
provider to the City of Calgarys Ride the Wind Light Rail Transit
program.  The Corporation also owns and
operates seven additional turbines totalling 4 MW located individually in the
Pincher Creek, Fort Macleod and Hillspring areas of southwestern Alberta.  McBride Lake is a 75 MW facility comprised of 114 Vestas V47 (660 kW)
turbines located at Fort MacLeod, Alberta. 
It was constructed by the Corporation and has been producing electricity
since the third quarter of 2003.  McBride
Lake is operated by the Corporation and is owned by the Corporation and ENMAX
Green Power Inc.  The output from the
facility is 100 per cent contracted in the form of a 20 year PPA with
ENMAX.  The Corporation is also entitled
to receive Wind Power Production Incentive (WPPI)
payments from the federal government at $12/MWh in respect of the McBride Lake
facility until 2013.  On October 13, 2004, TransAlta announced the commencement of
commercial operations at its $100 million Summerview 68 MW wind farm located
approximately 15 kilometres northeast of Pincher Creek, Alberta.  The Summerview facility, which comprises 38
1.8 MW turbines, together with an existing 1.8 MW turbine in the area, brings
the total wind generation capacity at that location to 70 MW.  The Summerview wind farm is a merchant
facility but is entitled to receive WPPI payments from the Federal Government
at $10/MWh until 2014.  On January 19, 2007, the Corporation announced that it had been
awarded a 25 year PPA to deliver 75 MW of wind power to New Brunswick Power. On
July 17, 2007, the Corporation announced it had amended its PPA with New
Brunswick Power from 75 MW to 96 MW bringing the total capital cost for the
project to an estimated $170 million. 
The project was completed by the end of 2008.  Natural Forces Technologies Inc. (Natural Forces), an Atlantic Canada based wind developer,
is TransAltas co-development partner in this project and Natural Forces has an
option to purchase up to 17 per cent of the Kent Hills project within 180 days
of its completion.  On February 13, 2008, the Corporation announced that, commencing
in 2009, it would be constructing a 66 MW wind generation facility in southern
Alberta, consisting of 22 Vestas V90 3 MW wind turbines.  The total capital cost for this Blue Trail
wind power project is expected to be $115 million.  The capacity from this project is expected to
be sold on the Alberta Power Pool.  The
Blue Trail wind farm is entitled to receive payments from Natural Resources
Canada (NRCan), a division of the federal
government, through the eco Energy for Renewable Power (eERP)
program.  On May 27, 2008, the Corporation announced that, commencing in
2009, it would be constructing another 66 MW wind generation facility in
southern Alberta, consisting of 22 Vestas V90 3 MW wind turbines.  The total capital costs for this expansion of
the Summerview 2 wind power project is expected to be $123 million.  The capacity from this project is expected to
be sold on the Alberta Power Pool.  With
this announcement, existing and planned wind generation facilities owned and
operated by the Corporation total 419 MW. 
The Summerview 2 wind farm expansion is entitled to receive payments
from NRCan through the eERP program.  All of the electricity generated and sold by the Corporations wind
division is from generation facilities that are EcoLogo certified.  The Corporation is an EcoLogo certified
distributor of Alternative Source Electricity through Environment Canadas
Environmental Choice program.  EcoLogo
certification is granted to products with environmental performance that meet
or exceed all government, industrial safety and performance standards.  The Corporations wind facilities constructed
after April 2001, also qualify for the Green E and Green Leaf
certifications.  Alberta PPAs  All of the Corporations Alberta thermal and hydroelectric facilities,
other than the Wabamun, Genesee 3 facilities, and uprated capacity, operate
under Alberta PPAs.  The Alberta PPAs
establish committed capacity and electrical energy generation requirements and
availability targets to be achieved by each thermal plant, energy and ancillary
services obligations for the hydroelectric plants, and the price at which
electricity is to be supplied.  The
Corporation bears the risk or retains the benefit of volume variances (except
for those arising from events considered to be force


- 13 -   majeure, in the case of the thermal plants) and any change in costs
(unless due to a change in law) required to maintain and operate the
facilities.  Under the Alberta PPAs, for the formerly regulated thermal facilities,
the Corporation is exposed to electricity price risk if availability declines
below contracted levels (other than as a result of outages caused by an event
of force majeure).  In such
circumstances, the Corporation must pay a penalty for the lost availability
based upon a price equal to the 30 day rolling average of Albertas market
electricity prices.  This rolling average
provision attempts to mitigate price spikes that can occur as a result of
sudden outages.  The Corporation attempts
to further mitigate this exposure by maintaining contracted and uncontracted
capacity in the market, through operating and maintenance practices, and
through hedging activities.  The Corporations hydroelectric facilities are not contracted on a
facility-by-facility basis; rather, facilities are aggregated in a single
Alberta PPA which provides for financial obligations for energy and ancillary
services based on hourly targets.  These
targeted amounts are met by the Corporation through physical delivery or third
party purchases.  The Corporations compensation under the Alberta PPAs is based on a
pricing formula which replaced the cost of service regime that applied
previously under utility regulation.  Key
elements of the pricing formula are the amount of common equity deemed to form
part of the capital structure, the amount of risk premium attributable to
deemed common equity and a recovery of fixed and variable costs.  Common equity is deemed to be 45 per cent of
total capital and the return on equity is set annually at a 4.5 per cent
premium over the rate on a 10-year Government of Canada Bond.  The pricing formula includes a provision for site restoration costs of
the thermal generating plants for the whole term of the PPA.  Until 2017, if the costs recovered are
insufficient, then the Corporation can apply to the Balancing Pool to recover
the incremental portion.  The Alberta
PPAs include, as part of the capacity payment for hydroelectric operations, an
amount for decommissioning.  The expiry dates for the Corporations Alberta PPAs, range from 2013 to
2020.  With the expiry of the PPA at the
Wabamun facility, the Corporation procured an extension of the license to
operate Unit four of the Wabamun facility until March 31, 2010.  The Corporation holds various licenses from
Alberta Environment and the AEUB to operate its other facilities, most of which
are renewed every few years.  The
Corporation is evaluating the economics of running assets post-PPA expiry.  Upon the expiry of the PPAs and subject to
procuring an extension of the licenses, if required, the Corporation will then
be able to sell its electricity to the Alberta Power Pool and to third party
purchasers through direct sales agreements. 
The Corporation is currently selling most of its electricity from the
Wabamun facility on the spot market.  The Alberta PPAs (together with legislation which applies thereto)
permit the Balancing Pool, an entity established by the Government of Alberta,
directly or indirectly as successor to the power purchaser under the Alberta
PPAs, to terminate the Alberta PPAs in certain circumstances.  These termination provisions are similar to
those found in some PPAs entered into by government related power
purchasers.  The Corporation will be
entitled to receive a lump sum payment in connection with any such termination,
other than a termination resulting from the Corporations default and will
thereafter be able to sell the output from any affected facilities for its own
account.  Canada:  Ontario  The Corporations Ontario generating facilities are summarized in the
following table:  Location
  
  Plant
  
  Capacity
  (MW)
  
  Ownership
  (%)
  
  Commissioning DatesSarnia
  
  Sarnia
  
  506
  
  100
  
  2003Ottawa
  
  Ottawa
  
  68
  
  50
  
  1992Mississauga
  
  Mississauga
  
  108
  
  50
  
  1992


- 14 -   Location
  
  Plant
  
  Capacity
  (MW)
  
  Ownership
  (%)
  
  Commissioning DatesWindsor
  
  Windsor
  
  68
  
  50
  
  1996Total
  
  
  
  750
  The Sarnia facility is a combined cycle cogeneration facility which is
owned by the Corporation.  The
Corporation acquired 135 MW of electric generation capacity in 2002, and in March 2003
the Corporation acquired the remaining 440 MW of capacity.  On January 1, 2009, the Corporation
applied, and subsequently received approval, to decommission a 69 MW turbine at
Sarnia.  The 506 MW facility provides
steam and electricity to nearby facilities owned by Dow Chemical Canada Inc.,
Lanxess (formerly Bayer Inc.), Nova Chemicals (Canada) Ltd. and Suncor Energy
Products Inc.  On February 15, 2006,
TransAlta announced that it had signed a five-year agreement with the OPA for
production at its Sarnia facility.  Under
the terms of the contract, TransAlta will be available to supply an average of
400 MW of electricity to the Ontario electricity market.  The supply contract is effective until December 31,
2010.  On December 24, 2008, the
Minister of Energy and Infrastructure directed the OPA to seek contracts with
certain energy providers in Ontario, namely those listed in a December 14,
2005 Direction which includes Sarnia, for the supply of clean and efficient
electricity generation.  The OPA is not
required to enter a new contract with the energy provider where an agreement
cannot be reached as to what constitutes a reasonable cost to Ontario
electricity consumers and a reasonable balancing of risk and reward.  The Ottawa plant is owned by TA Cogen. 
It is a combined cycle cogeneration facility designed to produce 68 MW
of electrical energy.  This capacity is
sold under a long-term contract with the Ontario Electricity Financial
Corporation (OEFC), an agency of the Province
of Ontario.  This agreement expires in
2012.  The Ottawa plant also provides
thermal energy to the member hospitals and treatment centers of the Ottawa
Health Sciences Centre, National Defence Medical Centre and the Perley and
Rideau Veterans Health Centre.  The Mississauga plant is owned by TA Cogen.  It is a combined cycle cogeneration facility
designed to produce 108 MW of electrical energy.  This capacity is contracted under a long-term
contract with the OEFC which expires in 2017. 
The Mississauga Plant provided cogeneration services to Boeing Canada
Inc. (Boeing) until July 2005 at which
time Boeing exercised its right under the cogeneration services agreement to no
longer take and pay for cogeneration services due to the recent closure of its
manufacturing facility.  Boeing remains
entitled to any steam credits based on the total plant electricity generation
revenue.  On or prior to each of January 1,
2013, 2018 and 2023, Boeing may give notice of its intention to continue to
purchase, or discontinue, cogeneration services.  In addition, on those same dates, Boeing has
the option to require the removal of the Mississauga Plant from the leased
lands or purchase the Mississauga Plant at its net salvage value.  The Windsor plant is owned by TA Cogen. 
It is a combined cycle cogeneration facility designed to produce 68 MW
of electrical energy.  Currently, 50 MW
of the capacity is sold under a long-term contract to the OEFC.  This agreement expires in 2016.  The Windsor plant also provides thermal
energy to Chrysler Canada Inc.s minivan assembly facility in Windsor.  In 2003, an agreement was reached with the
OEFC to sell the remaining 18 MW to the Ontario power market when it is
economic to do so.  United States  The Corporations generation facilities in the United States are
summarized in the following table:  Location
  
  Plant
  
  Capacity
  (MW)
  
  Ownership
  (%)
  
  Commissioning DatesWashington
  
  Centralia Coal No. 1
  
  688
  
  100
  
  1971Centralia Coal No. 2
  
  688
  
  100
  
  1971Centralia Gas
  
  248
  
  100
  
  2002Skookumchuk
  
  1
  
  100
  
  1970


- 15 -   Location
  
  Plant
  
  Capacity
  (MW)
  
  Ownership
  (%)
  
  Commissioning DatesNew York
  
  Saranac
  
  240
  
  37.5
  
  1994California
  
  Vulcan
  
  34
  
  50
  
  1986Del Ranch
  
  38
  
  50
  
  1989Elmore
  
  38
  
  50
  
  1989Leathers
  
  38
  
  50
  
  1990CE Turbo
  
  10
  
  50
  
  2000Salton Sea I
  
  10
  
  50
  
  1987Salton Sea II
  
  20
  
  50
  
  1990Salton Sea III
  
  50
  
  50
  
  1989Salton Sea IV
  
  40
  
  50
  
  1996Salton Sea V
  
  49
  
  50
  
  2000Texas
  
  Power Resources
  
  212
  
  50
  
  1988Arizona
  
  Yuma
  
  50
  
  50
  
  1994Hawaii
  
  Wailuku
  
  10
  
  50
  
  1993Total
  
  
  
  2,464
  Centralia  The Corporation owns a two unit 1,376 MW thermal facility and a 248 MW
gas-fired facility in Centralia, Washington, located south of Seattle.  The Corporation also owns a 1 MW
hydro-electric generating facility and related assets on the Skookumchuk River
near Centralia, which facilities are used to provide reliable water supply to
TransAltas other generation facilities at Centralia.  TransAlta also owns a coal-mine adjacent to
the Centralia facility, however, it stopped all mining operations at the mine
in late 2006.  The Corporation has entered into a number of medium to long-term energy
sales agreements from the Centralia facility. 
The Corporation also sells electricity from the Centralia facility into
the Western Electricity Coordinating Council and, in particular, on the spot
market in the U.S. Pacific Northwest energy market.  The Corporations strategy is to balance
contracted and non contracted sales of electricity to manage production and
price risk.  The Corporation stopped mining operations at its Centralia coal-mine on
November 27, 2006.  Prior to that
date, the Centralia mine produced approximately five to six million tons of
coal annually, or approximately 70 to 85 per cent of the Centralia plants
annual coal requirements.  Although the
Corporation estimates that certain coal reserves remain to be extracted, the
Corporation has not yet received permits for, nor developed the new area, from
which this coal could be produced.  The
Corporation has entered into contracts to purchase and transport coal from the
Powder River Basin in Montana and Wyoming to fuel its facility until such time,
if any, as it is economic to pursue the extraction of coal at its Centralia
mine.  CE
Generation  On January 29, 2003, TransAlta announced the completion of the
acquisition from El Paso Corporation (El Paso) of a
50 per cent interest in CE Generation, for total consideration of approximately
US$240 million, which included approximately US$35 million for working
capital.  The CE Generation acquisition
included the right to a 50 per cent interest in Salton Sea VI, a geothermal
project, in the Imperial Valley, California. 
While there is still future development potential for CE Generation in
the Imperial Valley, the Salton Sea VI project that was being pursued when
TransAlta acquired its interest in CE Generation was never developed.  CE Generation, through its subsidiaries, is primarily engaged in the
development, ownership and operation of independent power production facilities
in the United States using geothermal and natural gas resources.  CE Generation holds a net ownership interest
of approximately 385 MW in 13 facilities, having an aggregate operating


- 16 -   capacity of 829 MW, including 327 MW of geothermal generation in
California and 502 MW of gas fired cogeneration in New York, Texas and Arizona.  CE Generation affiliates currently operate 10 geothermal facilities in
Imperial Valley, California.  Each of the
geothermal facilities sells electricity pursuant to independent, long term
contracts.  CE Generation affiliates currently operate three natural gas fired
facilities in Texas, Arizona and New York State, having an aggregate generation
capacity of 502 MW.  The Arizona facility
sells its output pursuant to long-term contracts while the Texas facility has
contracted a tolling agreement for capacity, which expires at the end of
2009.  The New York facility sells its
output pursuant to long-term contracts until mid-2009, after which point its
capacity will be sold on the spot market. The intent is to re-contract both the
New York facility and the Texas facility under a tolling agreement for
capacity.  Wailuku  On February 17, 2006, a subsidiary of TransAlta, together with a
subsidiary of Mid-American entered into an arrangement to purchase a 10 MW
hydro facility in Hawaii to be held directly by the Wailuku Holding Company
LLC.  Each of TransAlta and Mid American
hold a 50 per cent interest in the facility. 
The facility sells electricity pursuant to the terms of a 30 year
long-term contract with the Hawaii Electricity Light Company.  Australia  The Corporation holds interests in Western Australia consisting of the
110 MW Parkeston generation facility through a 50/50 joint venture with NP
Kalgoorlie Pty Ltd, a subsidiary of Newmont Australia Limited, and the 245 MW
Southern Cross Energy gas and diesel generation facilities.  Most of TransAltas generation supplies two
large mining companies through long-term capacity contracts and the remaining
amount of surplus energy and capacity is sold into Australias Wholesale
Electricity Market which was introduced in Western Australia in late 2006.  TA Cogen  The Corporations interest in the 220 MW Meridian natural gas fired
generation facility in Saskatchewan, the 780 MW Sheerness thermal generation
facility, the 118 MW Fort Saskatchewan gas fired cogeneration facility in
Alberta, and the Mississauga, Ottawa and Windsor Essex facilities in Ontario,
are held through TA Cogen, an Ontario limited partnership owned 50.01 per cent
by subsidiaries of TransAlta and 49.99 per cent by Stanley Power Inc., a
subsidiary of Cheung Kong Infrastructure Holdings Limited.  Commercial
Operations and Development  The Commercial Operations Development group provides a number of
strategic functions to the Corporation, including the following:  ·Gathering and assessing market intelligence, enabling management to
more effectively engage in strategic planning and decision making for the
Corporation.  This includes identifying
and ranking markets which are the most attractive to enter, and developing
strategies and plans to effectively compete in each market where the
Corporation operates;  ·Identifying specific opportunities to develop, acquire, or divest of
generation assets in markets where the Corporation is operating or growing and
completing the business arrangements so the Corporation can either make
investment or divesture decisions;  ·Negotiating and entering into contractual agreements with customers
for the sale of output from the Corporations generating assets, including
electricity, steam or other energy related commodities;


- 17 -   ·Scheduling physical deliveries of natural gas supplies used to
generate electricity and the electrical generation outputs from each asset to
meet contractual obligations while managing the physical and financial risks
associated with the generation and transmission of electrical energy, including
during those periods of unplanned outages;  ·Increasing the value of electricity output and fuel inputs from each
generating asset through a variety of regional portfolio optimization
strategies in both the current year and over the long-term; and  ·Recommending optimum maintenance schedules and operating levels
according to current and anticipated market conditions that will maximize
earnings from each of the generation assets.  Beyond these functions, the Commercial Operations Development group
derives additional revenue and earnings from the wholesale trading of
electricity and other energy related commodities and derivatives.  The group seeks to manage and limit risk exposures from both financial
and physical positions, as well as counterparty risks.  The key risk control activities of the
Commercial Operations Development group, in conjunction with other functions of
the Corporation, include credit review approval and reporting, risk measurement
monitoring and reporting, validation of transactions, and trading portfolio
valuation monitoring and reporting.  The Corporation uses mark-to-market valuation and the application of a
value at risk (VAR) determination for risk
control practices for its trading portfolios. 
This approach is a measure of assessing the potential trading losses
that the Corporation could experience over a given time, due to fluctuations in
energy prices in each market.  The
Corporations policy is to actively manage and limit the groups aggregate VAR
exposure within board approved limits.  Competitive Environment  TransAlta is the largest generator of electricity in Alberta, measured
by capacity, and has a significant portfolio of generation assets in the
Pacific Northwest and western U.S.  The
Corporation also owns and operates generating assets in eastern Canada and
Australia.  The Corporation expects continued long-term growth of electricity
demand in its core markets although short-term growth rates may be
significantly reduced in the current economic environment.  In addition to increased demand, many of the
markets in which TransAlta participates have established renewable portfolio
targets or standards that require new renewable power investments.  As part of its balanced approach to capital allocation which includes
returning capital to shareholders through dividends and share buybacks,
TransAlta also has plans for investing in new capacity in its core markets
where opportunities exist for renewable and cogeneration assets.  Alberta is Canadas fourth largest province by population with
approximately 3.6 million residents representing approximately 11 per cent of
Canadas total population.  Alberta
consumed approximately 70,000 GWh of electricity in 2008.  As at December 31, 2008, the aggregate
installed capacity of generating facilities in Alberta was approximately 12,300
MW.  Electrical utilities in the U.S. Pacific Northwest are organized into
the Western Electricity Coordinating Council (WECC).  The WECC is the largest geographically of the
ten regions in the North American Electric Reliability Council and is divided
into four sub regions, of which Region 1 includes British Columbia, Alberta,
Washington, Oregon, Idaho, Montana, Utah, Western Wyoming and Northern
Nevada.  This sub region is referred to
as the Northwest Power Pool (NWPP). 
The WECC estimates that approximately 369,000 GWh of electricity was
consumed in the NWPP in 2008.  The WECC
also reported an estimated aggregate electrical generating capacity of
approximately 85,000 MW in the NWPP for the year ending 2008.


- 18 -   Ontario is Canadas largest province with approximately 12.9 million
residents representing approximately 39 per cent of Canadas total
population.  Ontario consumed
approximately 148,700 GWh of electricity in 2008.  Ontario Power Generation Inc., the successor
to the generation business of Ontarios former integrated electric utility,
controls two thirds of Ontarios approximately 32,000 MW of installed capacity,
the balance of which is owned by municipal electric utilities and private
independent power producers or industrial consumers.  In October 2004, the provincial government of New Brunswick
officially opened the electricity market to partial competition and corporate
reorganization. The Electricity Act (2004) allows
wholesale and industrial consumers to purchase power from either New Brunswick
Power or a competing supplier. The new competitive market does not extend to
retail customers, businesses or small industries.  In 2007, New Brunswick announced the Charter
for Change requiring ten per cent of electricity purchases to be from renewable
sources commencing in 2016.  The Corporation expects that the demand for electricity will continue
to grow in its target markets over the long-term.  In addition to increased demand, the market
for electricity in some of these regions has undergone deregulation.  Legislation in Alberta and Ontario and many
states in the United States have mandated the unbundling of generation,
transmission and distribution services which were traditionally provided by
vertically integrated utilities to promote competition in the market for
generation, which caused some integrated utilities to sell all or parts of
their generation assets.  While the pace
of this process has changed, the Corporation believes that the combination of
increased demand for electricity, deregulation and the increased availability
of generation assets may provide an opportunity to increase its generation
capacity and leverage its Commercial Operations Development capabilities,
provided that in doing so, the financial position of the Corporation is not
compromised.  Australia is heavily dependent on coal for electricity, more so than
any other developed country except Denmark and Greece.  About 80 per cent of power produced is
derived from coal.  Natural gas is
increasingly used for electricity, especially in South Australia and Western
Australia.  The Australian Bureau of
Agriculture and Resource Economics (ABARE) estimated total production of
272,000 GWh for 2008 with a growth rate of approximately 2.4 per cent per annum
from 2009 to 2012.  The major reform in
the Australian electricity industry involved the establishment in southern and
eastern Australia of the National Electricity Market (NEM).  In Western Australia, where TransAltas power
assets are located, a new Wholesale Electricity Market (WEM) was introduced
in late 2006. Total installed capacity in the WEM is about 4,500 MW, while
TransAltas capacity in the region is approximately 345 MW.  TransAlta enjoys a solid competitive
advantage in power supply to mining operations, especially remote mining
operations, and has built up significant knowledge and expertise in this field.  Competitive Strengths  The Corporation believes it is well positioned to achieve its business
strategy due to its competitive strengths, which include the following:  Financial
strength - The Corporation has investment
grade ratings from Moodys Investor Services, Inc. (Moodys),
Standard & Poors, a division of the McGraw Hill Companies, Inc.
(S&P) and Dominion Bond Rating
Service Limited (DBRS).  Stable
cash flow base  Approximately 70 per cent
of the Corporations generating capacity is contracted through PPAs or LTCs
for the next five years.  Revenues
received under contractual arrangements are not subject to short-term
fluctuations in the spot price for electricity.  Fuel
diversity - The Corporation has a diverse
mix of fuels used for the generation of electricity, including coal, natural
gas, hydro, geothermal and wind.  The
Corporation believes that this mix reduces the impact on corporate performance
in the event of external events affecting one fuel source.  Management
team - The Corporations management team has
substantial industry, international and local market experience.


- 19 -   Commercial
Operations Development expertise - The
Corporation believes that its Commercial Operations Development group has
enhanced returns from the Corporations existing generation base and has
allowed the Corporation to obtain more favourable pricing for uncommitted
electricity, secure fuel supply on a cost-effective basis and fulfill
electricity delivery obligations in the event of an outage.  Ownership
or control of coal supply - The Corporation
owns, controls or leases extensive coal reserves in Alberta that provide a long-term
and stable source of fuel for all of its thermal generation capacity in
Alberta.  The Corporations mines in
Alberta contain some of the lowest sulphur coal in North America, averaging
0.25 per cent sulphur at the Whitewood mine and 0.25 per cent at the Highvale
mine.  Coal with lower sulphur content
emits less sulphur dioxide when it is burned.  Wind
Generation - The Corporation is one of the
largest owners and operators of wind generation in Canada.  The Wind management team has developed key
relationships with customers, suppliers and policy makers that provide a
competitive advantage in the development, operations and marketing of wind
generation.  Environment  The Corporation is a recognized leader in Sustainable Development
and has taken early preventative action on a number of environmental fronts in
advance of regulation.  Capital Expenditures  Capital expenditures for property and investments (including acquisitions)
by TransAlta for the past five years were:  2008
  
  $1,006.4 million
  
  2005
  
  $325.5 million2007
  
  $599.7 million
  
  2004
  
  $345.7 million2006
  
  $224.9 million
   ENVIRONMENTAL
RISK MANAGEMENT  TransAlta is subject to federal, provincial, state and local
environmental laws, regulations and guidelines concerning the generation and
transmission of electrical and thermal energy and surface mining.  TransAlta is committed to complying with
legislative and regulatory requirements and to minimizing the environmental
impact of its operations.  TransAlta
works with governments and the public to develop appropriate frameworks to
protect the environment and to promote sustainable development.  TransAltas approach to managing its environmental, health and safety (EHS) risks has three elements:  ·              Compliance based activities, such as permitting and
reporting;  ·              ISO based EHS Management systems and programs, such as
safety programs and auditing; and  ·              Longer term strategic initiatives, including climate
change and government policy development.  These elements are integrated into TransAltas corporate wide
operations and management systems.  They
are designed to mitigate risks of TransAltas activities to employees, the
public and the environment, and to address potential competitive risks from future
changes in environmental policy.  They
are also supportive of TransAltas corporate commitment to sustainability.  To meet regulatory requirements and improve environmental performance,
TransAlta made environmental operating and capital expenditures in fiscal year
2008 of approximately $47 million. 
Environmental expenditures are generally defined as expenditures
incurred to comply with Canadian or international environmental regulations,
conventions or voluntary agreements.


- 20 -   All TransAltas facilities are in material compliance with existing
regulatory requirements.  Environmental
risk at the plants operated by TransAlta has been reduced by actions in several
areas:  ·
  
  Continued investment in mercury control
  technology evaluation leading to expected installation of mercury capture
  equipment at our Alberta coal plants in 2010, and at our Centralia,
  Washington coal plant by 2012;·
  
  Uprate improvements delivering higher
  efficiency generation at the Sundance plant;·
  
  Continued program of compliance and
  management system audits at all facilities;·
  
  The planned decommissioning of the older
  Wabamun thermal plant in 2010;·
  
  Acquisition of carbon offsets;·
  
  Continued expansion of the wind energy
  business, with minimal emissions footprint; and·
  
  Development of a carbon capture and
  storage demonstration project in Alberta.  On a longer time horizon, TransAlta anticipates future environmental regulatory
developments in areas such as climate change, air quality and water.  Regulatory changes and policy developments
are tracked in all relevant jurisdictions. 
Relevant regulatory developments are discussed below.  Canada  On January 24, 2008, the Government of Alberta announced its
long-term intention to cut greenhouse gas emissions to 14 per cent below 2005
levels by 2050 through developing and implementing carbon capture and storage
technologies, developing conservation and energy efficiency programs, and
through increased investment in clean energy technologies.  We are assessing the impact of this proposal
upon our operations and our own investment in environmental technologies and
programs.  Alberta continues to maintain its greenhouse gas (GHG)
regulatory regime which was implemented in July 1, 2007, under the Climate Change and Emissions Management Amendment Act.  Under the legislation, baselines and targets
for GHG intensity are set on a facility-by-facility basis.  The legislation and subsequent regulations
require a 12 per cent reduction in GHG emission intensity from a baseline of
the average of 2003 to 2005 emission levels. 
New facilities or those in operation for less than three years are
exempt; however, upon the fourth year of operations, the facility baseline is
established and reduction requirements gradually increase until the eighth year
by which time emissions must be 12 per cent below the established
baseline.  Emissions over the baseline must
be mitigated either through contributions to an Alberta Technology Fund at $15
per tonne, or through the purchase and retirement of Alberta-based offsets from
non-regulated sectors.  The PPAs for our
Alberta-based coal facilities contain change-in-law provisions that allow us to
recover compliance costs from the PPA customers.  After flow-through, the annual net compliance
costs for 2008 are estimated to be $1.2 million.  Mercury reduction requirements in Alberta are established at a 70 per
cent reduction by 2010.  We submitted our
mercury control plan in March 2007. 
Detailed mercury technology testing was conducted in 2008 and further is
expected in 2009.  Engineering work is
underway to have mercury controls fully implemented in 2010.  On April 26, 2007, the Canadian government released details of its
proposed environmental legislation in its Turning the Corner policy paper. The
federal plan calls for an 18 per cent reduction in GHG emission intensity
starting in 2010, increasing to a 20 per cent absolute reduction requirement by
2020. The plan also calls for a reduction in air pollutants such as sulphur
dioxide, nitrous oxide, mercury, and particulates starting in the 2012 - 2015
period. Proposed reduction caps range from 45 per cent to 60 per cent of
current levels.  A number of material details
in the


- 21 -   federal plan are still to be determined, including its interaction with
provincial programs, which would allow a reasonable determination of future
compliance costs.  The Canadian government indicated in January 2009 that it intends to
develop an integrated cap and trade program for greenhouse gas emissions, in
cooperation with its North American trading partners.  There are few details of this new approach
and it is therefore not possible to determine what compliance costs would be or
how it might affect the previous approach.  In August 2007, the Government of Ontario announced its climate change
action plan which included a target to reduce GHG emissions by 6 per cent below
1990 level by 2014.  Subsequently the
government has indicated its intention to implement a cap and trade system for
greenhouse gases by 2010, although no additional legislation or details have
been developed.  United
States  In the United States, the Washington State Climate Bill 6001 was
enacted and came into effect on July 22, 2007.  Our operations will not be impacted by the
bills performance standards at the current time, provided the facilities do
not change ownership or enter into power sales contracts longer than five
years.  On December 12, 2008, Washington State introduced draft
legislation to enable a cap and trade system to be implemented by 2012.  Specific details of caps and allocations will
be developed in 2009.  In parallel,
Washington State is engaged with other western states in the Western Climate
Initiative (WCI) to examine a regional cap
and trade system for carbon.  On September 23,
2008, the WCI released its design for a regional greenhouse gas cap and trade
system, which will be influential in individual state regulation
development.  At this point, there are no
indications as to how these initiatives will impact our fossil-fired assets in
Washington.  The United States Federal Government continues to contemplate a number
of proposed GHG related bills, but to date no clear outcome or schedule is
evident.  In February 2009, the
Administration provided a budget plan for implementing an economy-wide federal
cap & trade system to reduce greenhouse gases to 14 per cent below
2005 levels by 2020.  The budget includes
a plan to auction 100 per cent of the required allowances, with approximately
$150B of the revenue raised from auctioning to be allocated to clean energy
investments over 10 years.  TransAlta is an active participant in the Canadian Clean Power
Coalition, which is committed to developing clean coal technology in
Canada.  The coalition has several
engineering initiatives underway which will provide important guidance on
ultimate clean coal solutions for TransAltas facilities.  The Corporation is also exploring the
possibilities for a CO2 network pipeline through the ICON industry consortium.  In April 2008, TransAlta announced a partnership with Alstom LLC
to develop a one million tonne/year carbon capture and storage project at one
of TransAltas coal-fired power stations in Alberta.  This project has been shortlisted by the
Alberta Government for contributory funding as part of the provinces $2
billion CCS program, with a decision expected by June 30, 2009.  Environmental issues concerning water use are managed within the ISO
14001 framework.  TransAlta continues to
work with regulators in each jurisdiction in which it operates, to ensure water
is used wisely on site and that all regulations pertaining to water and
wetlands management, both on and off site, are met at all times.  TransAltas environmental efforts have been recognized by the Dow Jones
North American Sustainability Index for four years in a row.  The Index represents the best environmental
performance leaders in North America.  In
2008, TransAlta also participated in the global Carbon Disclosure Project which
requires detailed assessments of corporate climate change plans and actions.


- 22 -   To date, TransAlta does not believe that its competitive position in
the wholesale generation business has been adversely affected by environmental
concerns.  TransAlta continues to make
operational improvements and investments to its existing generating facilities
to reduce the environmental impact of generating electricity.  RISK
FACTORS  Readers should consider carefully the risk factors set forth below as
well as the other information contained and incorporated by reference in this
Annual Information Form. For a further discussion of risk factors affecting
TransAlta, please refer to Risk Factors in the Annual MD&A, which is
incorporated by reference herein.  A reference herein to a material adverse effect on the Corporation
means such an effect on the Corporation on its business, financial condition,
results of operations, or its cash flows, as the context requires.  Changes in the prices and availability of fuel
supplies required to generate electricity, and in the price of electricity, may
materially adversely affect the Corporation.  A significant portion of the Corporations revenues are tied, either
directly or indirectly, to the market price for electricity in the markets in
which the Corporation operates.  Market
electricity prices are impacted by a number of factors, including: the price of
fuel that is used to generate other sources of electricity (and, accordingly,
certain of the factors that affect the price of fuel described below); the
management of generation and the amount of excess generating capacity relative
to load in a particular market; the cost of controlling emissions of pollution,
including potentially the cost of carbon; the structure of the particular
market; and weather conditions that impact electrical load.  As a result, the Corporation cannot
accurately predict future electricity prices and electricity price volatility
could have a material adverse effect on the Corporation.  The Corporation buys natural gas and some of its coal to supply the
fuel needed to generate electricity. The Corporation could be materially
adversely affected if the cost of fuel that it must buy to generate electricity
increases to a greater degree than the price that it can obtain for the
electricity that it sells.  Several
factors affect the price of fuel, many of which are beyond the Corporations
control, including:  ·              prevailing market prices for fuel, including any
associated transportation costs;  ·              demand for energy products;  ·              increases in the supply of energy products in the
wholesale power markets; and  ·              the extent of fuel transportation capacity or cost of
fuel transportation service into the Corporations markets.  Changes in any of these factors may increase the Corporations cost of
producing power or decrease the amount of revenue it receives from the sale of
power, which could materially adversely affect the Corporation.  The rules and regulations in the various markets in
which the Corporation operates are subject to change, which may materially
adversely affect the Corporation.  Certain of the markets in which the Corporation operates and intends to
operate are subject to significant regulatory oversight and control.  The Corporation is not able to predict
whether there will be any further changes in the regulatory environment, including
potential regulation of the rates allowed to be charged and the capital
structure of wholesale generating companies such as the Corporation, or what
the ultimate effect of a changing regulatory environment will have on its
business.  Existing market rules and
regulations may be revised or reinterpreted and new laws and regulations may be
adopted or become applicable to the Corporation or its facilities which could
have a material adverse effect on the Corporation.  The Corporation cannot guarantee that it will
be able to adapt its business


- 23 -   in a timely manner in response to any changes in the regulatory regimes
in which it operates, and such failure to adapt could have a material adverse
effect on the Corporation.  Regulatory authorities may also from time to time investigate the
Corporations activities in the markets in which it operates or pursues
trading.  Such investigations may result
in sanctions or penalties which may materially affect the Corporations future
activities or financial status.  The Corporations facilities are also subject to various licensing and
permitting requirements in the jurisdictions in which they operate, many of
which licenses and permits need to be renewed from time to time.  If the Corporation is unsuccessful in
renewing such licenses or permits, or the terms of such licenses or permits are
changed in a manner that is adverse to the Corporation, the Corporation could
be materially adversely affected.  Any changes in the rules and regulations of provincial or state
public utility commissions or other regulatory bodies in the other markets in
which the Corporation competes or may compete in the future may materially
adversely affect the Corporation.  Many of the Corporations activities and properties
are subject to environmental requirements and changes in, or liabilities under,
these requirements may materially adversely affect the Corporation.  The Corporations operations are subject to extensive Canadian, United
States and other federal, provincial, state and local environmental laws,
regulations and guidelines, relating to the generation and transmission of
electrical and thermal energy and surface mining, pertaining to pollution and
protection of the environment, health and safety and governing among other
things, air emissions, water usage and discharges, storage, treatment and
disposal of waste and other materials and remediation of sites and land use
responsibility (collectively, environmental regulation).  These laws can impose liability for costs to
investigate and remediate contamination without regard to fault and under
certain circumstances liability may be joint and several resulting in one
responsible party being held responsible for the entire obligation.  Environmental regulation can also impose,
among other things, restrictions, liabilities and obligations in connection
with the generation, handling, use, storage, transport, treatment and disposal
of hazardous substances and waste and can impose clean-up, disclosure or other
responsibilities with respect to spills, releases and emissions of various
substances to the environment. 
Environmental regulation can also require that facilities and other
properties associated with the Corporations operations be operated,
maintained, abandoned and reclaimed to the satisfaction of applicable
regulatory authorities.  In addition,
there is an increasing level of environmental regulation regarding the use,
treatment and discharge of water and increasing anticipation of new or
additional emission regulations at a national level in Canada and the United
States which may impose different compliance requirements standards on the
Corporation.  These various compliance
standards may result in duplicate compliance and costs requirements for the
Corporation or may impact our ability to operate our facilities.  To comply with environmental regulation, the Corporation must incur
material capital and operating expenditures relating to environmental
monitoring, emissions and effluent control equipment and processes, emissions
measurement, verification and reporting, emissions fees and other compliance
activities or obligations.  The
Corporation expects to continue to have environmental expenditures in the
future.  Stricter standards, new or
greater regulation, increased enforcement by regulatory authorities, more
extensive permitting requirements, an increase in the number and types of
assets operated by the Corporation subject to environmental regulation and the
implementation of provincial, state and national GHG emissions, mercury
emissions or other air emissions regulation in a jurisdiction in which we
operate could increase the amount of these expenditures. To the extent these
expenditures cannot be passed through to our customers under our power purchase
agreements, including Alberta PPAs (as defined herein) or otherwise, the costs
to the Corporation could be material.  In
addition, compliance with environmental regulation might result in restrictions
on some of the Corporations operations. 
If the Corporation does not comply with environmental regulation,
regulatory agencies could seek to impose statutory, administrative and/or
criminal liabilities on the Corporation or to curtail its operations and
significant expenditures on compliance, new equipment or technology, reporting
obligations and research and development. 
In addition to environmental regulation, the Corporation could also face
civil liability in the event that private parties seek to impose liability on
the Corporation


- 24 -   for property damage, personal injury or other costs and losses.  The Corporation cannot guarantee that
lawsuits or administrative or investigative actions will not be commenced
against it otherwise affect its operations and assets.  If an action is filed against the Corporation
or which may otherwise affect its operations and assets, the Corporation could
be required to make substantial expenditures to defend or evidence its
activities or to bring the Corporation, its operations and assets into
compliance, which could have a material adverse effect on the Corporation.  A number of recent federal, provincial, state and local regulatory
efforts continue to focus on potential climate change or GHG emissions
regulation.  GHG legislation is in early
stages of evolution in Canada and the United States, and it is relatively early
to determine the impact of potential GHG reduction requirements.  For example, the issues of jurisdiction to
regulate GHG emissions, as between the federal and provincial governments, and
whether both levels of government will be able to agree on harmonization of
desired GHG emissions reduction requirements, also remains outstanding in
Canada.  In addition, Washington is part
of a group of states in the Western Climate Initiative, which have announced
the intention to implement a cap and trade program for GHGs by 2012.  Mandatory GHG emissions reductions
requirements are expected to impose increased costs on the Corporation, as is
expected to be the case generally for thermal power producers in North
America.  The Corporation is subject to
other air quality regulation including mercury regulation.  At this time, the Corporation cannot assess the
potential impact of future mercury regulation at its United States facilities.  To the extent new or additional GHG, mercury
or other air emission regulations may require the Corporation to incur costs
that cannot be passed through to our customers under our power purchase
agreements, including Alberta PPAs or otherwise, the costs could be material
and have a material adverse effect on the Corporation.  The Corporations surface mining operations are subject to laws and
regulations establishing mining, environmental protection and reclamation
standards for all aspect of surface mining. 
As a mine owner or operator the Corporation must obtain permits from the
applicable regulatory body providing for the authorization of certain mining
operations that result in a disturbance of the surface.  These requirements seek to limit the adverse
impacts of coal mining and more restrictive requirements may be adopted from
time to time.  TransAlta as a mine owner
or operator may also be required to submit a bond or otherwise secure payment
of certain long-term obligations including mine closure or reclamations
costs.  Surety bond costs have increased
in recent years while the market terms of such bonds have generally become more
unfavourable.  In addition, the number of
companies willing to issue surety bonds has decreased.  TransAlta could be required to self fund
these obligations should it be unable to renew or secure the required surety
bonds for its mining operations.  Changes in general economic conditions may have a
material adverse effect on the Corporation.  Adverse changes in general economic and market conditions could
negatively impact product demand, revenue, operating costs, timing and extent
of capital expenditures, the net recoverable value of plant, property and
equipment, results of financing efforts, credit risk, and counterparty risk,
which could have a material adverse effect on the Corporation. Changes in
interest rates can impact the Corporations borrowing costs and the capacity
revenues the Corporation receives pursuant to the Alberta government mandated
power purchase arrangements (the Alberta PPAs).  Under the government mandated power purchase arrangements pursuant to
which the Corporation operates most of its facilities in Alberta, the
Corporation is subject to certain risks, including the possibilities of
penalties for unplanned outages and the burden of increased costs required to
maintain and operate its generation facilities.  The majority of the Corporations Alberta coal fired and hydroelectric
generating plants operate under the Alberta PPAs which established committed
capacity and electrical energy generation requirements and availability targets
to be achieved by each coal fired plant, energy and ancillary services
obligations for the hydroelectric plants, and the price at which power will be
supplied.  Under the Alberta PPAs
applicable to coal fired plants, in the event of an unplanned outage, other
than an outage determined to be caused by force majeure, the Corporation must
pay a penalty for the lost production based upon a price equal to the 30 day
trailing average of Alberta market electricity prices.  Consequently, an unplanned outage could have
a material adverse effect on the Corporation.


- 25 -   The Corporation bears some of the impact of increases in its operating
costs (other than increases arising as a result of a change of law as such
term is defined in the Alberta PPAs) because the price at which the Corporation
is able to sell its generation under the Alberta PPAs is based on a schedule of
forecast fixed costs.  Many of the
forecast costs will be determined by indices, formulae or other means for the
entire term of the Alberta PPA.  The
Corporations actual results will vary and depend on performance compared to
the forecasts on which the Alberta PPAs are based. Operating costs could
increase as a result of a number of factors which are beyond the Corporations
control. A significant increase in the Corporations operating costs could have
a material adverse effect on the Corporation.  From time to time during the term of the Alberta PPAs, issues may arise
regarding the intended operation of the Alberta PPAs which may require certain
provisions of the Alberta PPAs to be interpreted, and the interpretations given
may not be favourable to the Corporation. 
In such circumstances, the Corporation could be materially adversely
affected.  The operation and maintenance of the Corporations
facilities involves risks that may materially adversely affect the Corporation.  The operation, maintenance, refurbishment, construction and expansion
of power generation facilities involve risks, including breakdown or failure of
equipment or processes, fuel interruption and performance below expected levels
of output or efficiency.  Certain of the
Corporations generation facilities, particularly in Alberta, were constructed
many years ago and may require significant capital expenditures to maintain
peak efficiency or to maintain operations at all.  In addition, weather related interference,
work stoppages and other unforeseen problems may disrupt the operation and
maintenance of the Corporations facilities and may materially adversely affect
the Corporation.  The Corporation has entered into on going maintenance and service
agreements with the manufacturers of certain critical equipment.  If a manufacturer is unable or unwilling to
provide satisfactory maintenance or warranty support, the Corporation may have
to enter into alternative arrangements with other providers if it cannot perform
the maintenance itself.  These arrangements
could be more expensive to the Corporation than its current arrangements and
this increased expense could have a material adverse effect on the
Corporation.  If the Corporation is
unable to enter into satisfactory alternative arrangements, the inability of
the Corporation to access technical expertise or parts could have a material
adverse effect on the Corporation.  While the Corporation maintains an inventory, or otherwise makes
arrangements to obtain, spare parts to replace critical equipment and maintains
insurance for property damage to protect against operating risks, these
protections may not be adequate to cover lost revenues or increased expenses
and penalties which could result if the Corporation is unable to operate its
generation facilities at a level necessary to comply with sales contracts
(including Alberta PPAs).  The Corporation may be subject to the risk that it is necessary to
operate a plant at a capacity level beyond that which the Corporation has
contracted to provide steam in order to fulfill a contract.  In such circumstances the costs to produce
the steam being sold may exceed the revenues derived therefrom.  The Corporation relies on transmission lines that
it does not own or control, which may hinder its ability to deliver electricity.  The Corporation depends on transmission and distribution facilities
that are owned and operated by utilities and other power companies to deliver
the electricity the Corporation generates. 
An extended disruption in transmission would impact the Corporations
ability to sell and deliver electricity, which could have a material adverse
effect on the Corporation.  The Corporation may be adversely affected if its
supply of water is materially reduced.  Hydroelectric, natural gas, and coal-fired plants require continuous
water flow for their operation. Shifts in weather or climate patterns,
seasonable precipitation, the timing and rate of melting, run off, and other
factors beyond the control


- 26 -   of the Corporation, may reduce the water flow to the Corporations
facilities.  Any material reduction in
the water flow to the Corporations facilities would limit the Corporations
ability to produce and market electricity from these facilities and could have
a material adverse effect on the Corporation. 
There is an increasing level of regulation respecting the use, treatment
and discharge of water, and respecting the licensing of water rights in
Alberta.  Any such change in regulations
could have a material adverse effect on the Corporation.  Trading risks may have a material adverse affect on
the Corporation.  The Corporations trading and marketing business frequently involves
the establishment of trading positions in the wholesale energy markets on both
a long term and short term basis.  To the
extent that the Corporation has long positions in the energy markets, a
downturn in the markets is likely to result in losses from a decline in the
value of such long positions. 
Conversely, to the extent that the Corporation enters into forward sales
contracts to deliver energy the Corporation does not own, or take short
positions in the energy markets, an upturn in the energy markets is likely to
expose the Corporation to losses as it attempts to cover any short positions by
acquiring energy in a rising market.  In addition, from time to time the Corporation may have a trading
strategy consisting of simultaneously holding a long position and a short
position, from which the Corporation expects to earn a profit based on changes
in the relative value of the two positions. 
If, however, the relative value of the two positions changes in a
direction or manner the Corporation did not anticipate, it could realize losses
from such a paired position.  If the strategy the Corporation uses to hedge its exposures to these
various risks is not effective, it could incur significant losses.  The Corporations trading positions are
subject to the level of volatility in the energy markets that, in turn, depend
on various factors, including weather in various geographical areas and short
term supply and demand imbalances, which cannot be predicted with any
certainty.  A shift in the energy markets
could adversely affect the Corporations positions which could also have a
material adverse effect on the Corporation.  While the Corporation uses a number of risk management controls to
limit its exposure to risks arising from its trading activities, including
value-at-risk, volumetric and term limits and restrictions on authorized instruments,
the Corporation cannot guarantee that losses will not occur and such losses, if
material, could have a material adverse effect on the Corporation.  Because of the Corporations multinational
operations, the Corporation is subject to currency rate risk and regulatory and
political risk.  A significant part of the Corporations revenues and expenditures are
in U.S. and other currencies. 
Fluctuations in the exchange rate between these currencies and the
Canadian dollar could have a negative effect on the Corporation. While the
Corporation attempts to manage this risk through its use of hedging
instruments, including cross currency swaps, forward exchange contracts and by
matching revenues and expenses by currency at the Corporate level, fluctuations
in these exchange rates may have a material adverse effect on the Corporation.  In addition to currency rate risk, the Corporations foreign operations
may be subject to regulatory and political risk.  Any change to the regulations governing power
generation or the political climate in countries where the Corporation has
operations could impose additional costs and have a material adverse effect on
the Corporation.  The Corporation may have difficulty raising needed
capital in the future, which could significantly harm its business.  To the extent that the Corporations sources of cash and cash flow from
operations are insufficient to fund the Corporations activities, it may need
to raise additional funds.  Additional
financing may not be available when needed and, if such financing is available,
it may not be available on terms favourable to the Corporation.


- 27 -   The Corporations debt securities will be
structurally subordinated to any debt of its subsidiaries that is currently
outstanding or may be incurred in the future.  The Corporation operates its business through, and a majority of its
assets are held by, its subsidiaries, including partnerships.  The Corporations results of operations and
ability to service indebtedness are dependent upon the results of operations of
its subsidiaries and the payment of funds by these subsidiaries to it in the
form of loans, dividends or otherwise. 
The Corporations subsidiaries will not have an obligation to pay amounts
due pursuant to any debt securities issued by the Corporation or make any funds
available for payment of debt securities issued by the Corporation, whether by
dividends, interests, loans, advances or other payments.  In addition, the payment of dividends and the
making of loans, advances and other payments to the Corporation by its
subsidiaries may be subject to statutory or contractual restrictions.  In the event of the liquidation of any subsidiary, the assets of the
subsidiary would be used first to repay the indebtedness of the subsidiary,
including trade payables or obligations under any guarantees, prior to being
used to pay the Corporations indebtedness, including any debt securities
issued by the Corporation.  Such
indebtedness and any other future indebtedness of such subsidiaries would be
structurally senior to any debt securities issued by the Corporation.  The Corporations subsidiaries have financed some investments using non
recourse project financing.  Each non
recourse project loan is structured to be repaid out of cash flow provided by
the investment.  In the event of a
default under a financing agreement which is not cured, the lenders would
generally have rights to the related assets. 
In the event of foreclosure after a default, the Corporations
subsidiary may lose its equity in the asset or may not be entitled to any cash
that the asset may generate.  Although a
default under a project loan will not cause a default with respect to any debt
securities issued by the Corporation, it may materially affect the Corporations
ability to service its outstanding indebtedness.  Certain of the contracts to which the Corporation
is a party require the Corporation to provide collateral against its
obligations.  The Corporation is exposed to risk under certain electricity and
natural gas purchase and sale contracts entered into for the purposes of hedges
and proprietary trading. The terms and conditions of these contracts require
the Corporation to provide collateral when the fair value of these contracts is
in excess of any credit limits granted by the Corporations counterparties and
the contract obliges the Corporation to provide the collateral.  The change in fair value of these contracts
occurs due to changes in commodity prices. 
These contracts include: (i) purchase agreements, when forward
commodity prices are less than contracted prices; and (ii) sales
agreements, when forward commodity prices exceed contracted prices. Downgrades
in the Corporations creditworthiness by certain credit rating agencies may
decrease the credit limits granted by the Corporations counterparties and
accordingly increase the amount of collateral the Corporation may have to
provide.  If counterparties to the Corporations contracts
are unable to meet their obligations, the Corporation may be materially
adversely affected.  If purchasers of the Corporations electricity, steam or other
contractual counterparties of the Corporation default on their obligations, the
Corporation may be materially adversely affected. While the Corporation seeks
to control its exposure to credit risk by considering the ability of
counterparties to fulfill their obligations under the related contracts prior
to entering into such contracts, the Corporation cannot guarantee that it will
be successful in identifying credit worthy customers.  Moreover, while the Corporation seeks to
monitor trading activities to ensure that the credit limits for counterparties
are not exceeded, it cannot guarantee that it will be successful in doing
so.  If counterparties to the Corporations
contracts are unable to meet their obligations, the Corporation could suffer a
reduction in revenue which could have a material adverse effect on the
Corporation.


- 28 -   Insurance coverage may not be sufficient.  The Corporation has insurance for its facilities, including all risk
property insurance, commercial general public liability insurance, boiler and
machinery coverage, replacement power and business interruption insurance, in
amounts and with deductibles that the Corporation considers appropriate.  The Corporations insurance coverage may not
be available in the future on commercially reasonable terms or adequate
insurance limits may not be available in the market.  In addition, the insurance proceeds received
for any loss of or any damage to any of its generation facilities may not be
sufficient to permit it to continue to make payments on its debt.  Provision for income taxes may not be sufficient.  The Corporations operations are complex, and the computation of the
provision for income taxes involves tax interpretations, regulations, and
legislation that are continually changing. 
In addition, the Corporations tax filings are subject to audit by
taxation authorities.  While the
Corporation believes that its tax filings have been made in accordance with all
such tax interpretations, regulations, and legislation, the Corporation cannot
guarantee that it will not have disagreements with the Canada Revenue Agency or
other taxation authorities with respect to the Corporations tax filings.  The Corporation may be unsuccessful in the defence
of legal actions.  The Corporation is occasionally named as a defendant in various claims
and legal actions.  There can be no
assurance that the Corporation will be successful in the defence of each of
these claims and legal actions or that any claim or legal action that is
decided adverse to the Corporation will not materially adversely affect the
Corporation.  If the Corporation fails to attract and retain key
personnel, it could be materially adversely affected.  The loss of any of the Corporations key personnel or its inability to
attract, train, retain and motivate additional qualified management and other
personnel could have a material adverse effect on the Corporation.  Competition for these personnel is intense
and there can be no assurance that the Corporation will be successful in this
regard.  If the Corporation is unable to successfully
negotiate new collective bargaining agreements with its unionized workforce, as
required from time to time, it will be adversely affected.  While the Corporation believes it has a good relationship with its
unionized employees, the Corporation cannot guarantee that it will be able to
successfully negotiate or renegotiate its collective bargaining agreements on
terms agreeable to the Corporation.  Any
problems in negotiating these collective bargaining agreements could lead to
higher employee costs and a work stoppage or strike, which could have a
material adverse effect on the Corporation.  EMPLOYEES  As of December 31, 2008, the Corporation had 2,110 full and
part-time employees, of which 1,529 were employed in TransAltas generation
business and 147 were employed in TransAltas energy marketing business.  Approximately 46 per cent of the Corporations
employees are represented by labour unions. 
The Corporation is currently a party to 11 different collective
bargaining agreements.  Overall in 2008,
the Corporation renewed three of the agreements, an additional five agreements
are expected to be re-negotiated in 2009, and the remaining three agreements
are expected to be re-negotiated in 2010.


- 29 -   CAPITAL
STRUCTURE  General  The Corporations authorized share capital consists of an unlimited
number of common shares and an unlimited number of first preferred shares,
issuable in series.  As at March 12,
2009, there were 197,849,306common shares outstanding and no first
preferred shares were outstanding.  Common Shares  Each common share of the Corporation entitles the holder thereof to one
vote for each common share held at all meetings of shareholders of the
Corporation, except meetings at which only holders of another specified class
or series of shares are entitled to vote, to receive dividends if, as and when
declared by the Board of Directors, subject to prior satisfaction of preferential
dividends applicable to any first preferred shares, and to participate rateably
in any distribution of the assets of the Corporation upon a liquidation,
dissolution or winding up and subject to prior rights and privileges attaching
to first preferred shares.  The common
shares are not convertible and are not entitled to any pre-emptive rights.  The common shares are not entitled to
cumulative voting.  First Preferred Shares  The Corporation is authorized to issue an unlimited number of first
preferred shares, issuable in series and, with respect to each series, the
Board of Directors is authorized to fix the number of shares comprising the
series and determine the designation, rights, privileges, restrictions and
conditions attaching to such shares, subject to certain limitations.  The first preferred shares of all series rank senior to all other
shares of the Corporation with respect to priority in payment of dividends and
with respect to distribution of assets in the event of liquidation, dissolution
or winding up of the Corporation, or a reduction of stated capital.  Holders of first preferred shares are
entitled to receive cumulative quarterly dividends on the subscription price
thereof as and when declared by the Board of Directors at the rate established
by the Board of Directors at the time of issue of shares of a series.  No dividends may be declared or paid on any
other shares of the Corporation unless all cumulative dividends accrued upon
all outstanding first preferred shares have been paid or declared and set
apart.  In the event of the liquidation,
dissolution or winding up of the Corporation, or a reduction of stated capital,
no sum shall be paid or assets distributed to holders of other shares of the
Corporation until the holders of first preferred shares shall have been paid
the subscription price of the shares, plus a sum equal to the premium payable
on a redemption, plus a sum equal to the arrears of dividends accumulated on
the first preferred shares to the date of such liquidation, dissolution,
winding up, or reduction of stated capital, as applicable.  After payment of such amount, the holders of
first preferred shares shall not be entitled to share further in the
distribution of the assets of the Corporation.  The Corporations Board of Directors may include, in the share
conditions attaching to a particular series of first preferred shares, certain
voting rights effective upon the Corporation failing to make payment of six
quarterly dividend payments, whether or not consecutive.  These voting rights continue for so long as
any dividends remain in arrears.  These
voting rights are the right to one vote for each $25 of subscription price on
all matters in respect of which shareholders vote, and additionally, the right
of all series of first preferred shares, voting as a combined class, to elect
two directors of the Corporation if the Board of Directors then consists of
less than 16 directors, or three directors if the Board of Directors consists
of 16 or more directors.  Otherwise,
except as required by law, the holders of first preferred shares shall not be
entitled to vote or to receive notice of or attend any meeting of the
shareholders of the Corporation.  Subject to the share conditions attaching to any particular series
providing to the contrary, the Corporation may redeem first preferred shares of
a series, in whole or from time to time in part, at the redemption price
applicable to each series and the Corporation has the right to acquire any of
the first preferred shares of one or more series by


- 30 -   purchase for cancellation in the open market or by invitation for
tenders at a price not to exceed the redemption price applicable to the series.  CREDIT RATINGS  Issuer Rating  As of December 31, 2008, the Corporations issuer rating from
S&P was BBB (stable), from Moodys was Baa2 (stable), and from DBRS was BBB
(stable).  Senior Unsecured Long Term Debt  As of December 31, 2008, the Corporations senior unsecured long-term
debt is rated BBB (stable) by DBRS, BBB (stable) by S&P and Baa2 (stable)
by Moodys.  The ratings for debt
instruments range from a high of AAA to a low of D in the case of both DBRS and
S&P and from a high of Aaa to a low of C in the case of Moodys.  According to the DBRS rating system, debt securities rated BBB are of
adequate credit quality.  Protection of
interest and principal is considered acceptable, but the entity is more
susceptible to adverse changes in financial and economic conditions, or there
may be other adverse conditions present which reduce the strength of the entity
and its rated securities.  High or Low
grades indicate the relative standing within a rating category.  DBRS also assigns rating trends to each of
its ratings to give investors an understanding of DBRS opinion regarding the
outlook for the rating in question.  According to the S&P rating system, debt securities rated BBB
exhibit adequate protection parameters. 
However, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity of the obligor to meet its financial
commitment on such obligations than on obligations in the higher rating
categories.  The ratings from AA to B may
be modified by the addition of a plus (+) or minus () sign to show relative
standing within the major rating categories.  According to the Moodys rating system, debt securities rated Baa are
subject to moderate credit risk.  They
are considered medium grade and as such may possess certain speculative
characteristics.  Numerical modifiers 1,
2 and 3 are applied to each rating category, with 1 indicating that the
obligation ranks in the higher end of the category, 2 indicating a mid range
ranking and 3 indicating a ranking in the lower end of the category.  Note Regarding Credit Ratings  Credit ratings are intended to provide investors with an independent
measure of credit quality of an issue of securities.  The credit ratings accorded to the
Corporations outstanding securities by S&P, Moodys and DBRS, as
applicable, are not recommendations to purchase, hold or sell such securities
inasmuch as such ratings do not comment as to market price or suitability for a
particular investor.  There is no
assurance that the ratings will remain in effect for any given period or that a
rating will not be revised or withdrawn entirely by S&P, Moodys or DBRS in
the future if, in its judgement, circumstances so warrant.  DIVIDENDS  In setting its dividend, TransAltas Board of Directors considers the
Corporations financial performance and balances liquidity requirements,
capital reinvestment and returning capital to shareholders, with a policy of
paying annual dividends to its shareholders in the range of 60 to 70 per cent
of comparable earnings.  The payment and
level of future dividends on the common shares are determined by the Board of
Directors of TransAlta upon consideration of such factors.  TransAlta has declared and paid the following
dividends per share on its outstanding common shares for the past three years:


- 31 -   Period
  
  
  
  Dividend per Common Share2006
  
  First Quarter
  
  $0.25Second Quarter
  
  $0.25Third Quarter
  
  $0.25Fourth Quarter
  
  $0.252007
  
  First Quarter
  
  $0.25Second Quarter
  
  $0.25Third Quarter
  
  $0.25Fourth Quarter
  
  $0.252008
  
  First Quarter
  
  $0.27Second Quarter
  
  $0.27Third Quarter
  
  $0.27Fourth Quarter
  
  $0.27
  On January 29,
2009, the Corporations Board of Directors declared a cash dividend of $0.29
per common share, payable on April 1, 2009 to shareholders of record on March 1,
2009.  MARKET FOR
SECURITIES  TransAltas
common shares are listed on the TSX under the symbol TA and the New York
Stock Exchange under the symbol TAC. 
The following table sets forth the reported high and low trading prices
and trading volumes of the Corporations common shares as reported by the TSX
for the periods indicated:  Price ($)Month
  
  High
  
  Low
  
  Volume2008January
  
  34.00
  
  29.85
  
  15,201,560February
  
  35.80
  
  32.01
  
  27,280,079March
  
  35.73
  
  30.03
  
  31,739,588April
  
  34.27
  
  30.83
  
  16,237,231May
  
  36.16
  
  33.24
  
  16,671,590June
  
  37.30
  
  34.65
  
  17,308,802July
  
  38.10
  
  30.71
  
  42,637,530August
  
  37.73
  
  34.59
  
  20,057,372September
  
  36.88
  
  26.53
  
  28,180,867October
  
  29.85
  
  20.00
  
  24,458,282November
  
  24.59
  
  21.00
  
  14,517,240December
  
  24.45
  
  20.77
  
  11,835,5712009January
  
  26.60
  
  21.13
  
  10,881,392February
  
  22.96
  
  18.50
  
  16,191,905March 1 to 12
  
  21.05
  
  17.96
  
  5,609,514  DIRECTORS AND
OFFICERS  The name,
province or state and country of residence of each of the directors and
officers of TransAlta as at March 12, 2009, their respective position and
office and their respective principal occupation during the five preceding
years, are set out below.  The year in
which each director was appointed to serve to the Board is also set out
below.  Each director is appointed to
serve until the next annual meeting of TransAlta or until his or her successor
is elected or appointed.


- 32 -   Name, Province (State) and
  Country of Residence
  
  Year first
  became
  Director
  
  Principal OccupationWilliam D. Anderson
  Ontario, Canada
  
  2003
  
  Corporate Director. Mr. Anderson was President
  of BCE Ventures (a subsidiary of BCE Inc.) from 2001 to 2005
  (telecommunications) and prior to that Chief Financial Officer (CFO) of BCE
  Inc., Bell Canada Inc. and Bell Cablemedia plc (telecommunications). As
  President of BCE Ventures, he was responsible for a number of significant
  operating companies as well as being Chief Executive Officer (CEO) of Bell
  Canada International Inc. In his CFO roles, Mr. Anderson was responsible
  for all financial operations of the respective companies and executed
  numerous debt and equity financings, corporate acquisition and disposition
  transactions as well as corporate and operational restructurings.Mr. Anderson is a director of Gildan Activewear Inc. and of MDS
  Inc. He is a past director at BCE Emergis Inc., Bell Cablemedia plc, Bell
  Canada International Inc., CGI Group Inc., Four Seasons Hotels Inc., Sears
  Canada Inc., and Videotron Holdings plc.At TransAlta, Mr. Anderson is Chair of the Audit and Risk
  Committee of the Board.Mr. Anderson holds a bachelor degree in business administration
  from the University of Western Ontario (London, ON) and is a Chartered
  Accountant.Stephen L. Baum
  New Hampshire, U.S.A.
  
  2008
  
  Corporate Director. Mr. Baum was Chairman and
  CEO of Sempra Energy from December 1996 to February 2006, a San
  Diego-based Fortune 500 energy services holding company formerly known as
  Enova Corporation. Previous to that, Mr. Baum was President, CEO and
  Vice-Chairman of Sempra Energy. Prior to that he was Chairman, CEO and a
  member of the board of directors of Enova Corporation, the parent company of
  San Diego Gas & Electric (SDG&E) where he served in various
  officer positions including General Counsel. Before joining SDG&E, he was
  Senior Vice President and General Counsel of the New York Power Authority. He
  has also held various legal positions, including General Attorney at
  Orange & Rockland Utilities, and as an associate with the law firm
  of Curtis, Mallet-Prevost, Colt & Mosle in New York City.Mr. Baum is a member of the
  board of directors of Computer Science Corporation and is Chair of its Audit
  Committee. He is also a Senior Advisor to SkyFuel Inc., a solar company.At TransAlta, Mr. Baum is a
  member of the Audit and Risk Committee and the Human Resources Committee of
  the Board.Mr. Baum is a graduate of
  Harvard University and the University of Virginia Law School. He has also
  served as a Captain in the U.S. Marine Corps.Stanley J. Bright(1)
  Maryland, U.S.A.
  
  1999
  
  Corporate Director. Mr. Bright was President,
  CEO and Chairman of MidAmerican Energy Company (MidAmerican) from 1997 to
  1999 (electric and gas utility). He was also Chairman, President, and CEO,
  and CEO of predecessor companies, including the Iowa-Illinois Gas &
  Electric Company (IIG&E) from 1991 to 1997. As the CEO of IIG&E,
  Mr. Bright was successful with the consolidation of IIG&E and other
  Iowa based utilities in anticipation of emerging market competition, giving
  rise to the creation of MidAmerican. As the Chairman, President and CEO of
  the new entity, Mr. Bright led the realization of significant synergies
  while working through the post-merger transition. The Company also structured
  a long-term rate plan with the Iowa Public Service Commission. He retired as
  CEO of MidAmerican in 1999 but continued as a director until 2006.At TransAlta, Mr. Bright is Chair of the Human Resources
  Committee of the Board.Mr. Bright holds an undergraduate degree in accounting from The
  George Washington University (Washington, DC) and is a Certified Public
  Accountant.


- 33 -   Name, Province (State) and
  Country of Residence
  
  Year first
  became
  Director
  
  Principal OccupationTimothy W. Faithfull
  England, U.K.
  
  2003
  
  Corporate Director. Mr. Faithfull is a 36-year
  veteran of Royal Dutch/Shell plc (energy), where he filled diverse
  international roles principally in oil products and LNG project development.
  As President and CEO of Shell Canada Limited, he was responsible for bringing
  the $6 billion Athabasca Oil Sands Project on line, the first fully
  integrated oil sands venture in 25 years. Mr. Faithfull has extensive
  experience with commodity exposure and risk management, the result of his time
  directing the global crude oil trading operations of Shell International
  Trading and Shipping Company from 1993 to 1996. He was Chairman and CEO of
  Shell Eastern Petroleum in Singapore from 1996 to 1999, including Shells
  main refinery and oil products trading for Asia Pacific.During his time in Singapore he was a director of DBS Bank, and the
  Port of Singapore Authority. He was a trustee of the main Singapore
  Arts/Theatre complex. In Calgary, he served on the board of the Calgary
  Health Trust and the Epcor Arts Centre.Mr. Faithfull is a director of Canadian Pacific Railway Limited,
  Shell Pension Trust Limited, AMEC plc and Enerflex Systems Income Fund.At TransAlta,
  Mr. Faithfull is a member of the Audit and Risk Committee and the Human
  Resources Committee of the Board.Mr. Faithfull holds a master of arts degree in philosophy,
  politics and economics from the University of Oxford, U.K.Ambassador Gordon D. Giffin
  Georgia, U.S.A
  
  2002
  
  Lawyer and Senior Partner, McKenna, Long &
  Aldridge LLP(attorneys). From 1997 to 2001, Mr. Giffin served as the United States
  Ambassador to Canada with responsibility for managing Canada/U.S. bilateral
  relations, including energy and environmental policy. Prior to this appointment,
  he practised law for 18 years as a senior partner in Atlanta, Georgia and
  Washington, D.C. His practice focused on energy regulatory work at the state
  and federal levels. Prior to that, he served as Chief Counsel and Legislative
  Director to United States Senator Sam Nunn, with responsibility for the legal
  and legislative operations of the office. In 2001, Mr. Giffin returned
  to private practice where he specialized in state and federal regulatory
  matters, including those related to trade, energy and trans-border commerce.Mr. Giffin is a director of Canadian Imperial Bank of Commerce,
  Canadian National Railway Company, Canadian Natural Resources Limited, and
  Ontario Energy Savings Ltd.At TransAlta, Mr. Giffin is Chair of the Governance and
  Environment Committee of the Board.Mr. Giffin holds a bachelor of arts from Duke University (Durham,
  NC) and a juris doctorate from Emory University School of Law (Atlanta, GA).


- 34 -   Name, Province (State) and
  Country of Residence
  Year first became Director
  Principal OccupationC. Kent Jespersen
  Alberta, Canada
  2004
  Corporate Director. 
  Mr. Jespersen has been Chair and CEO of La Jolla Resources
  International Ltd. since 1998 (advisory and investments).  He has also held senior executive positions
  with NOVA Corporation of Alberta, Foothills Pipe Lines Ltd., and Husky Oil
  Limited before assuming the presidency of Foothills Pipe Lines Ltd. and
  later, NOVA Gas International Ltd. (NOVA). 
  At NOVA, he led the non-regulated energy services business (including
  energy trading and marketing) and all international activities.Mr. Jespersen is Chairman and a director of Orvana Minerals Ltd.
  and CCR Technologies Ltd. and a director of Matrikon Inc., Axia NetMedia
  Corporation and CanElson Drilling Ltd.At TransAlta,
  Mr. Jespersen is a member of the Governance and Environment Committee
  and the Human Resources Committee of the Board.Mr. Jespersen holds a bachelor of science in education and a
  master of science in education from the University of Oregon (Eugene, OR).Michael M. Kanovsky
  Alberta, Canada
  2004
  Corporate
  Director and Independent Businessman.  Mr. Kanovsky co-founded Northstar
  Energy Corporation (Northstar) with initial capital of $400,000 and helped
  build this entity into an oil and gas producer that was sold to Devon Energy
  Corporation for approximately $600 million in 1998.  During this period, Mr. Kanovsky was
  responsible for strategy and finance as well as merger and acquisition
  activity.  He initiated Northstars
  entry into electrical cogeneration through its wholly-owned power subsidiary,
  Powerlink Corporation (Powerlink). 
  Powerlink developed one of the first independent power producer (IPP)
  gas-fired co-generation plants in Ontario and also internationally.  In 1997, he founded Bonavista Energy Trust,
  which has grown to a present day market capitalization of approximately $2
  billion.Mr. Kanovsky is a director of Argosy Energy Corporation, ARC
  Energy Trust, Bonavista Energy Trust, Devon Energy Corporation, and Pure
  Technologies Ltd.At TransAlta, Mr. Kanovsky is a member of the Audit and Risk
  Committee and the Governance and Environment Committee of the Board.Mr. Kanovsky, a Professional Engineer, holds a bachelor of
  science in mechanical engineering from Queens University (Kingston, ON) as
  well as a master of business administration from the Richard Ivey School of
  Business at the University of Western Ontario (London, ON).Donna Soble Kaufman
  Ontario, Canada
  1989
  Lawyer and Corporate Director.  Mrs. Kaufman is a former partner with
  Stikeman Elliott LLP, an international law firm, where she practised
  antitrust law.  She has served on a
  number of boards since 1987, when she became a director of Selkirk
  Communications Limited, a diversified communications company.  A year later she was appointed Chair of the
  Board, President and CEO.  Several
  other directorships followed.  In
  addition to TransAlta, Mrs. Kaufman currently serves on the boards of
  BCE Inc. and Bell Canada.  She is also
  a director of HISTORICA, a private-sector education initiative, of the
  Institute of Corporate Directors, and a member of the Canadian Advisory Board
  of Catalyst, a non-profit organization working to advance women in
  business.  In 2001, she was named a
  Fellow of the Institute of Corporate Directors.At TransAlta, Mrs. Kaufman is Chair of the Board and an
  ex-officio member of all committees of the Board.Mrs. Kaufman holds a bachelor of civil law degree from McGill
  University (Montréal, QC) and a master of laws degree from the Université de
  Montréal (Montréal, QC).


- 35 -   Name, Province (State) and
  Country of Residence
  Year first
  became
  Director
  Principal OccupationGordon S. Lackenbauer(1)
  Alberta, Canada
  2005
  Corporate Director. 
  Mr. Lackenbauer was Deputy Chairman of BMO Nesbitt Burns Inc.
  (investment banking) from 1990 to 2004. 
  Prior to this, he was responsible for the principal activities of the
  firm, which included fixed income sales and trading, new issue underwriting,
  syndication and merger and acquisition advisory mandates.  Mr. Lackenbauer has worked with many
  of Canadas leading utilities and has frequently acted as an expert financial
  witness testifying on the cost of capital, appropriate capital structure, and
  the fair rate of return, principally before the Alberta Utilities Commission,
  the National Energy Board, and the Ontario Energy Board.Mr. Lackenbauer is a director of NAL Oil & Gas Trust and
  CTV Globemedia Inc.At TransAlta, Mr. Lackenbauer is a member of the Governance and
  Environment Committee and the Audit and Risk Committee of the Board.Mr. Lackenbauer holds a bachelor of arts in economics from Loyola
  College (Montréal, QC), as well as a master of business administration from
  the University of Western Ontario (London, ON).  He is also a chartered financial analyst.Martha C. Piper
  British Columbia, Canada
  2006
  Corporate Director.  Dr. Piper was President and
  Vice-Chancellor of the University of British Columbia from 1997 to 2006
  (education).  Prior to her appointment
  at UBC, she served as Vice-President, Research at the University of
  Alberta.  She served on the boards of
  the Alberta Research Council, the Conference Board of Canada and the Centre
  of Frontier Engineering Research. 
  Dr. Piper was also appointed by the Prime Minister of Canada to
  the Advisory Council on Science and Technology and currently Chairs the Board
  of the National Institute for Nanotechnology.Dr. Piper is a director of the Bank of Montreal, Shoppers Drug
  Mart Corporation and a member of the Canadian delegation to the Trilateral
  Commission, an organization fostering closer cooperation among the core democratic
  industrialized areas of the world.At TransAlta, Dr. Piper is a member of the Human Resources
  Committee and the Governance and Environment Committee of the Board.Dr. Piper holds a bachelor of science in physical therapy from
  the University of Michigan (Ann Arbor, MI), a master of arts in child
  development from the University of Connecticut (Storrs, CT), and a doctorate
  of philosophy in epidemiology and biostatistics from McGill University
  (Montréal, QC).  She has also received
  honorary degrees from 16 international universities.  Dr. Piper is an Officer of the Order
  of Canada and a recipient of the Order of British Columbia.Luis Vázquez Senties
  Mexico
  2001
  Corporate Director and Independent Businessman. 
  Mr. Vázquez is founder, President, CEO and Chairman of Grupo
  Diavaz, an international constructor of offshore oil and gas platforms,
  developer of oil and gas fields, and a distributor of natural gas in Mexico
  (oil and gas).  Grupo Diavaz began as a
  Mexican underwater diving operation that grew to become the worlds second
  largest firm of its kind, servicing the offshore oil and gas industry in both
  exploration and production efforts.Mr. Vázquez is Chairman of the Mexican Gas Association and
  Vice-President of the Mexico Chapter of the World Energy Council.  He is a past director of the American Gas
  Association.At TransAlta, Mr. Vázquez is a member of the Human Resources
  Committee of the Board.


- 36 -   Name,
  Province (State) and Country of Residence
  
  Year
  first
  became
  Director
  
  Principal OccupationStephen
  G. SnyderAlberta, Canada
  
  1996
  
  President
  and Chief Executive Officer of TransAlta Corporation since 1996.Previously Mr. Snyder
  was President & CEO, Noma Industries Ltd., President & CEO,
  GE Canada Inc., and President & CEO, Camco, Inc.Mr. Snyder
  is a director of the Canadian Imperial Bank of Commerce, Chair of the Calgary
  Stampede Foundation, and Chair of the Alberta Secretariat for Action on Homelessness.
  He is past-chair of the Calgary Committee to End Homelessness, the
  Canada-Alberta ecoEnergy Carbon Capture & Storage Task Force, the
  Conference Board of Canada, the Canadian Electricity Association, the Calgary
  Zoological Society, the University of Calgary Management Advisory Council,
  the Calgary Zoo Destination Africa Campaign and the Calgary United Way
  Campaign.Mr. Snyder
  holds a bachelor of science in chemical engineering from Queens University
  (Kingston, ON) as well as a master of business administration from the
  University of Western Ontario (London, ON).He has
  honourary degrees from the University of Calgary (LLD), and the Southern
  Alberta Institute of Technology (Bachelor of Applied Technology). He was
  awarded the Alberta Centennial Medal in 2005, and the Conference Board
  Honorary Associate Award for 2008.  Notes:(1)
  Mr. Bright
  served as a director of Access Air Inc. (Access Air) for the period of
  December 4, 1997 to January 31, 2000, a privately held start-up
  airline company.  The company
  Mr. Bright was employed by, and whom he represented on the Access Air
  board, supported Access Air in the hope that it would improve air service to
  the state of Iowa.  Access Air filed
  for bankruptcy protection on November 29, 1999.(2)
  Mr. Lackenbauer
  resigned from the Board of Directors of Tembec Inc. (Tembec) on
  August 2, 2007.  On
  December 19, 2007, Tembec announced its proposed recapitalization
  transaction providing a consensual solution to both noteholders and shareholders.  On February 22, 2008, Tembec announced
  that it had received the approval of the majority of shareholders and the
  requisite majority of noteholders of Tembec Industries Inc.  On February 27, 2008, Tembec announced
  that it had received approval from the Ontario Superior Court of Justice
  (Commercial List) with respect to their plan of arrangement relating to the
  proposed recapitalization transaction. 
  On October 31, 2008, Tembec announced that it had successfully
  obtained a final American court order recognizing its Canadian plan of
  arrangement as a foreign proceeding in the United States.  OfficersName
  
  Principal
  Occupation
  
  ResidenceStephen G. Snyder
  
  President and Chief Executive Officer
  
  Alberta, CanadaBrian Burden
  
  Executive Vice-President and Chief Financial Officer
  
  Alberta, CanadaWilliam D.A. Bridge
  
  Executive Vice-President, Generation Technology and
  PMM
  
  Alberta, CanadaDawn L. Farrell
  
  Executive Vice-President, Commercial Operations and
  Development
  
  Alberta, CanadaRichard P. Langhammer
  
  Executive Vice-President, Generation Operations
  
  Alberta, CanadaKenneth S. Stickland
  
  Executive Vice-President, Legal, SD and EH&S
  
  Alberta, CanadaMichael Williams
  
  Executive Vice-President, Human Resources, IT and Communications
  
  Alberta, CanadaFrank Hawkins
  
  Vice-President and Treasurer
  
  Alberta, CanadaMaryse C. St.-Laurent
  
  Corporate Secretary
  
  Alberta, CanadaAll of the officers of TransAlta
  have held their present principal occupation or position for the past five
  years, except for the following:


- 37 -   ·Prior to December 2005, Brian Burden was Executive
Vice-President and Chief Financial Officer of Molson Inc.  Prior to 2002, he was Senior Vice-President,
Seagram Corporate/Venture Transition of Diageo PLC.  ·Prior to July 2007, William Bridge was Vice-President, Western
Canada Operations.  Prior to October 2005,
Mr. Bridge was Vice-President, Customer and Asset Management; prior to September 2003,
he was Vice-President, Development & Acquisition; and prior to September 2001
he was Director, Commercial Operations, Eastern Canada.  ·Prior to July 2007, Dawn Farrell served as Executive
Vice-President, Corporate Development, Executive Vice-President, Independent
Power Projects and Vice-President, Energy Marketing and IPP Development at
TransAlta Corporation.  From 2003 to 2006,
she served as Executive Vice-President Generation and in June 2006 she was
appointed Executive Vice-President Engineering, Aboriginal Relations and
Generation at B.C. Hydro.  ·Prior to October 2005, Richard Langhammer was President,
TransAlta Centralia Generation LLC and TransAlta Centralia Mining LLC,
subsidiaries of the Corporation; and prior to December 2003, he was
Vice-President, Plant Operations of TransAlta.  ·Prior to April, 2007, Kenneth Stickland was Executive
Vice-President, Legal.  ·Prior to July 2007, Michael Williams was Executive
Vice-President, HR & Communications.  ·Prior to June 2007, Frank Hawkins was Assistant Treasurer.  ·Prior to June 2005, Maryse St.-Laurent was Secretary of TC
PipeLines, LP since September 2003 and Recording Secretary since January 2001,
and Senior Legal Counsel TransCanada Corporation since June 1997.  As of March 11, 2009, the directors and executive officers of
TransAlta, as a group, beneficially owned, directly or indirectly, or exercised
control or direction over an aggregate of 676,330 common shares of
TransAlta.  This constitutes less than
one per cent of TransAltas outstanding common shares.  INTERESTS OF
MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS  No director or executive officer of the Corporation, no person or
company that is the direct or indirect beneficial owner of, or who exercises
control or direction over more than 10 per cent of the common shares of the
Corporation, and no associate or affiliate of any of them, has or has had any
material interest, direct or indirect, in any transaction involving the
Corporation within the three most recently completed financial years or to date
in 2009 or in any proposed transactions that has materially affected or will
materially affect the Corporation.  INDEBTEDNESS
OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS  Since January 1, 2008, there has been no indebtedness, other than
routine indebtedness, outstanding to TransAlta from any of TransAltas
directors, nominees for election as directors, executive officers, senior
officers or associates of any such directors, nominees or officers.  CORPORATE
CEASE TRADE ORDERS, BANKRUPTCIES OR SANCTIONS  Corporate
Cease Trade Orders


- 38 -   Except as otherwise disclosed herein, no director, executive officer or
controlling security holder of TransAlta Corporation is, as at the date of this
Annual Information Form, or has been, within the past ten years before the date
hereof, a director or executive officer of any other issuer that, while that
person was acting in that capacity:  (i)was the subject of a cease trade or similar order or an order that
denied the relevant company access to any exemption under securities
legislation for a period of more than 30 consecutive days; or  (ii)was subject to an event that resulted, after the person ceased to be
a director or executive officer, in the company being the subject of a cease
trade or similar order or an order that denied the relevant company access to
any exemption under securities legislation for a period of more than 30
consecutive days; or  (iii)within a year of that person ceasing to act in that capacity, became
bankrupt, made a proposal under any legislation relating to bankruptcy or
insolvency or was subject to or instituted any proceedings, arrangement or
compromise with creditors or had a receiver, receiver manager or trustee
appointed to hold its assets.  Personal
Bankruptcies  No director, executive officer or controlling security holder of
TransAlta Corporation has, within the 10 years before the date hereof, become
bankrupt, made a proposal under any legislation relating to bankruptcy or
insolvency, or became subject to or instituted any proceedings, arrangement or
compromise with creditors, or had a receiver, receiver manager or trustee
appointed to hold such persons assets.  Penalties
or Sanctions  No director, executive officer or controlling security holder of
TransAlta Corporation has:  (iv)been subject to any penalties or sanctions imposed by a court relating
to securities legislation or by a securities regulatory authority or has
entered into a settlement agreement with a securities regulatory authority,
other than penalties for late filing of insider reports; or  (v)been subject to any other penalties or sanctions imposed by a court
or regulatory body that would likely be considered important to a reasonable
investor in making an investment decision.  CONFLICTS OF INTEREST  Circumstances
may arise where members of the Board of Directors serve as directors or
officers of corporations which are in competition to the interests of the
Corporation. No assurances can be given that opportunities identified by such
board members will be provided to the Corporation.  LEGAL PROCEEDINGS
AND REGULATORY ACTIONS  TransAlta is occasionally named as a party in various claims and legal
proceedings which arise during the normal course of its business.  TransAlta reviews each of these claims,
including the nature of the claim, the amount in dispute or claimed and the
availability of insurance coverage. 
Although there can be no assurance that any particular claim will be
resolved in the Corporations favour, the Corporation does not believe that the
outcome of any claims or potential claims of which it is currently aware will
have a material adverse effect on the Corporation, taken as a whole, after
taking into account amounts reserved by the Corporation.  For further information, please refer to Notes
29 and 31 of the Corporations audited consolidated financial statements for
the year ended December 31, 2008, which financial statements are
incorporated by reference herein.  See Documents
Incorporated by Reference herein.


- 39 -   TRANSFER AGENT AND REGISTRAR  The transfer
agent and registrar for TransAltas common shares is CIBC Mellon Trust Company
in Vancouver, Calgary, Winnipeg, Toronto and Montreal.  The transfer agent and registrar for the
common shares in the United States is Mellon Investor Services LLC at its
principal office in New York, New York.  INTERESTS OF EXPERTS  Ernst &
Young LLP, Chartered Accountants, 1000, 440 - 2nd Avenue, S.W., Calgary,
Alberta, T2P 5E9 are the auditors of the Corporation.  TransAltas
auditors, Ernst & Young LLP, are independent in accordance with the
Rules of Professional Conduct of the Institute of Chartered Accountants of
Alberta and have complied with the SECs rules on auditor independence.  ADDITIONAL INFORMATION  Additional
information in relation to TransAlta may be found under TransAltas profile on
SEDAR at www.sedar.com.  Additional
information including directors and officers remuneration and indebtedness,
principal holders of TransAltas securities and securities authorized for
issuance under equity compensation plans (all where applicable), is contained
in TransAltas Management Proxy Circular for its most recent annual meeting of
shareholders that involved the election of directors and can be obtained upon
request from the Corporate Secretary of TransAlta Corporation.  Additional
financial information is provided in TransAltas audited consolidated financial
statements as at and for the year ended December 31, 2008 and in the
Annual MD&A, each of which is incorporated by reference in this Annual
Information Form.  See Documents
Incorporated by Reference herein.  AUDIT AND RISK COMMITTEE  General  The members of
TransAltas Audit and Risk Committee (ARC) satisfy
the requirements for independence under the provisions of Canadian Securities
Regulators, Multilateral Instrument 52-110 Audit Committees,
Section 303A of the New York Stock Exchange Rules and Rule 10A-3
under the U.S. Securities and Exchange Act of 1934.  The ARCs Charter requires that it be
comprised of a minimum of three independent directors.  It currently has six independent members,
William D. Anderson (Chair), Stephen L. Baum, Timothy W. Faithfull, Michael M.
Kanovsky, Gordon S. Lackenbauer and Donna S. Kaufman as an ex-officio
member.  All members of the committee are
financially literate pursuant to both Canadian and U.S. securities requirements
and each of Mr. William D. Anderson and Mr. Gordon S. Lackenbauer
have been determined by the Board to be an audit
committee financial expert, within the meaning of Section 407
of the United States Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act).  Mandate of the Audit and Risk Committee  The mandate of
the ARC is to assist the Board in its oversight responsibility to the
shareholders of the Corporation, the investment community and others relating
to the integrity of the Corporations financial statements, the quality of its
financial reporting processes, the systems of internal accounting and financial
controls, the risk identification assessments conducted by management and the
programs established in response to such risks, the internal audit function,
the external auditors qualifications, independence, performance and reports
and to provide oversight with respect to legal compliance programs established
by management which may have a material effect on the financial statements of
the Corporation.  The ARC also reviews
the Corporations compliance with the Corporations code of


- 40 -   conduct,
financial code of conduct and the Corporations policy with respect to the
hiring of employees of the external auditors.  The ARCs
function is oversight.  Management is
responsible for the preparation, presentation and integrity of the financial
statements of the Corporation. 
Management and the internal audit group of the Corporation are
responsible for maintaining appropriate accounting and financial reporting
principles and policy and internal controls and procedures for compliance with
accounting standards and applicable laws and regulations.  While the ARC
has the responsibilities and powers set forth herein, it is not the duty of the
ARC to plan or conduct audits or to determine that the Corporations financial
statements are complete and accurate and in accordance with generally accepted
accounting principles.  This is the
responsibility of management and the external auditors.  Management is
responsible for preparing the interim and annual financial statements and financial
disclosure of the Corporation and for maintaining a system of internal controls
to provide reasonable assurance that assets are safeguarded and that
transactions are authorized, executed, recorded and reported properly.  The ARCs role is to provide direct,
meaningful and effective oversight of the Corporations financial reporting and
counsel to management without assuming responsibility for managements day to
day duties.  Audit and Risk Committee Charter  The Charter of
the Audit and Risk Committee is attached as Appendix A.  Relevant Education and Experience of Audit and Risk Committee Members  The following
is a brief summary of the education or experience of each member of the ARC
that is relevant to the performance of their responsibilities as a member of
the ARC, including any education or experience that has provided the member
with an understanding of the accounting principles used by TransAlta to prepare
its annual and interim financial statements.  Name of ARC Member
  
  Relevant Education and ExperienceW. D. Anderson
  
  Mr. Anderson
  is a Chartered Accountant. Mr. Anderson has served as Chief Executive Officer
  of a public company and as Chief Financial Officer of several public
  companies. In such capacities, Mr. Anderson actively supervised persons
  engaged in preparing, auditing, analyzing or evaluating financial statements.
  Mr. Anderson has also served as a principal financial officer and accounting
  officer and as a director and audit committee member of several public companies.Stephen L. Baum
  
  Mr. Baum has over 25 years of financial, legal and
  industry experience gained working as a senior officer, director and Chairman
  of energy companies.  During his tenure
  as CEO of Sempra Energy, Mr. Baum had financial officers reporting directly
  to him.  Mr. Baum also serves as
  Chairman of the Audit Committee of Computer Sciences Corporation, a NYSE
  listed company. Mr. Baum holds a law degree from the University of Virginia.T. W. Faithfull
  
  Mr. Faithfull
  holds a Bachelor of Arts degree in Economics and has acquired significant
  financial experience and exposure to accounting and financial issues as Chief
  Executive Officer of Shell Canada Limited and in his other capacities during
  his 36 years with the Royal Dutch/Shell group of companies.M. M. Kanovsky
  
  Mr. Kanovsky
  has over 30 years of financial and industry experience gained through working
  in the investment banking business as well as a director, officer and audit
  committee member of several public companies and trusts. Mr. Kanovsky is a
  graduate of the MBA program from the Richard Ivey School of Business at the
  University of Western Ontario.


- 41 -   Name of ARC Member
  
  Relevant Education and ExperienceG. S. Lackenbauer
  
  Mr.
  Lackenbauer has over 35 years of experience in the investment banking
  industry. Mr. Lackenbauer has also appeared as an expert financial witness
  with respect to financial markets, capital structure, cost of capital and
  fair return on common equity, in over 40 regulatory proceedings. Mr.
  Lackenbauer also has extensive experience as a director or governor of public
  companies and not-for-profit organizations. Mr. Lackenbauer holds a Bachelor
  of Arts in Economics, a MBA degree from the University of Western Ontario and
  is a Chartered Financial Analyst.D. S. Kaufman (ex-officio)
  
  Mrs. Kaufman has over 25 years of legal, professional
  and financial management experience gained in the practice of law, as a
  director of several public companies and as Chair, President and CEO of
  Selkirk Communications.  Mrs. Kaufman
  has served on several audit committees. 
  Mrs. Kaufman holds a civil law degree from McGill University and a
  master of laws from the University of Montreal.   Other Board Committees  In addition to
the Audit and Risk Committee, TransAlta has two other standing committees: the
Governance and Environment Committee and the Human Resources Committee.  Mrs. Kaufman, the Chair of the Board, is a
non-voting ex-officio member of all committees. 
The members of these committees as of December 31, 2008 are:  Governance and Environment Committee
  
  Human Resources CommitteeChair: Ambassador Gordon D. Giffin
  
  Chair: Stanley J. BrightC. Kent Jespersen
  
  Stephen L. BaumMichael M. Kanovsky
  
  Timothy W. FaithfullGordon S. Lackenbauer
  
  C. Kent JespersenDr. Martha C. Piper
  
  Dr. Martha C. PiperDonna Soble Kaufman (ex-officio)
  
  Luis Vázquez SentiesDonna Soble Kaufman (ex-officio)  The Charters of the Governance and Environment Committee
and the Human Resources Committee may be found on TransAltas website under
Corporate Responsibility - Governance at www.transalta.com.  Further information about the Board and the
Corporations corporate governance may also be found on our website or in the
Corporations Management Proxy Circular which is filed on Sedar at www.sedar.com.  Fees Paid to Ernst & Young LLP  For the years
ended December 31, 2008 and December 31, 2007, Ernst & Young
LLP and its affiliates were paid $3,372,142 and $2,838,740 respectively, as
detailed below:  Year ended Dec. 31Ernst & Young LLP
  
  2008
  
  2007Audit fees
  
  $
  2,594,183
  
  $
  2,624,029Audit related fees
  
  432,343
  
  168,968Tax fees
  
  
  345,616
  
  45,743Total
  
  $
  3,372,142
  
  $
  2,838,740
  No other audit
firms provided audit services in 2008 or 2007.  The nature of
each category of fees is described below:


- 42 -   Audit Fees  Audit fees
were paid for professional services rendered by the auditors for the audit of
the Corporations annual financial statements or services provided in
connection with statutory and regulatory filings or engagements, including the
translation from English to French of the Corporations financial statements
and other documents.  Total audit fees
for 2008 include payments related to 2007 in the amount of $1,403,923.  Total audit fees for 2007 include payments
related to 2006 in the amount of $1,476,300.  Audit-Related Fees  The
audit-related fees in 2008 were primarily for work performed by Ernst &
Young LLP in relation to miscellaneous accounting advice provided to the
Corporation.  Tax Fees  Majority of
tax fees for 2008 relate to the finalization of tax credit recoveries.  Pre-Approval Policies and Procedures  The ARC has
considered whether the provision of services other than audit services is
compatible with maintaining the auditors independence. In May 2002, the ARC
adopted a policy that prohibits TransAlta from engaging the auditors for
prohibited categories of non-audit services and requires pre-approval of the
ARC for other permissible categories of non-audit services, such categories
being determined under the Sarbanes-Oxley Act.  Representatives
of Ernst & Young LLP will be in attendance at the Meeting, will have
the opportunity to make a statement if they so wish and will be available to
respond to questions.


A-1   APPENDIX A  TRANSALTA CORPORATION (the Corporation)  AUDIT AND RISK COMMITTEE CHARTER   A.Establishment of Committee and Procedures  1.Composition of
Committee  The Audit and
Risk Committee (the Committee) of the Board of Directors (the Board) of
TransAlta Corporation (the Corporation) shall consist of not less than three
Directors.  All members of the Committee
shall be determined by the Board to be independent as required under the
provisions of Canadian Securities Regulators Multilateral Instrument 52-110
Audit Committees, Section 303A of the New York Stock Exchange rules and
Rule 10A-3 of the U.S. Securities and Exchange Act of 1934, as such
rules apply to audit committee members. 
All members of the Committee must be financially literate pursuant to
both Canadian and U.S. securities requirements and at least one member must be
determined by the Board to be an audit committee financial expert within the
meaning of Section 407 of the United States Sarbanes-Oxley Act of 2002
(the Sarbanes Oxley Act). 
Determinations as to whether a particular director satisfies the requirements
for membership on the Committee shall be made by the Board of Directors (the
Board) at the recommendation of the Committee.  2.Appointment of Committee Members  Members of the
Committee shall be appointed from time to time by the Board, on  the recommendation of the Governance and
Environment Committee, and shall hold office until the next annual meeting of
shareholders, or until their successors are earlier appointed, or until they
cease to be Directors of the Corporation.  3.Vacancies  Where a
vacancy occurs at any time in the membership of the Committee, it may be filled
by the Board.  The Board shall fill any
vacancy if the membership of the Committee is less than three directors.  4.Committee Chair  The Board
shall appoint a Chair for the Committee on the recommendation of the Governance
and Environment Committee.  5.Absence of Committee Chair  If the Chair
of the Committee is not present at any meeting of the Committee, one of the
members of the Committee who is present at the meeting shall be chosen by the
Committee to preside at the meeting.


A-2   6.Secretary of Committee  The Committee
shall appoint a Secretary who need not be a director of the Corporation.  7.Meetings  The
Chair of the Committee or any of its members may call a meeting of the
Committee.  The Committee shall meet at
least quarterly and at such other time during each year as it deems
appropriate.  In addition, the Chair of
the Committee or any of its members may call a special meeting of the Committee
at any time. Although the Corporations Chief Executive Officer may attend
meetings of the Committee, the Committee shall also meet in separate executive
sessions.  8.Quorum  A majority of
the members of the Committee present in person or by telephone or other
telecommunication device that permits all persons participating in the meeting
to speak to each other, shall constitute a quorum.  9.Notice of Meetings  Notice of the
time and place of every meeting shall be given in writing (including by way of
written facsimile communication or email) to each member of the Committee at
least 48 hours prior to the time fixed for such meeting, provided, however,
that a member may in any manner waive 
notice of a meeting; and attendance of a member at a meeting constitutes
a waiver of notice of the meeting, except where a member attends for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called. 
Notice of every meeting shall also be provided to the external and
internal auditors.  10.Attendance at Meetings  At the
invitation of the Chair of the Committee, other Board members, officers or
employees of the Corporation, the external auditors, and other experts or
consultants may attend a meeting of the Committee.  11.Procedure, Records and Reporting  Subject to any
statute or the articles and by-laws of the Corporation, the Committee shall fix
its own procedures at meetings, keep records of its proceedings and report to
the Board generally not later than the next scheduled meeting of the Board.  12.Review of Charter  The Committee
shall evaluate its performance and review and reassess the adequacy of its
Charter at least annually or otherwise, as it deems appropriate, and if necessary
propose changes to the Governance and Environment Committee and the Board for
review and approval.  13.Outside
Experts and Advisors  The Committee Chair, on behalf of the Committee, or any of its
members is authorized, at the expense of the Corporation, when deemed necessary
or desirable, to retain independent counsel, outside experts and other advisors
to advise the Committee independently on any matter.


A-3   B.Mandate of the Committee  The Committee
provides assistance to the Board in fulfilling its oversight responsibility to
the shareholders, the investment community and others, relating to the
integrity of the Corporations financial statements, the financial reporting
process, the systems of internal accounting and financial controls, the risk
identification assessment conducted by management and the programs established
by management and the Board in response to such assessment, the internal audit
function and the external auditors qualifications, independence, performance
and reports to the Corporation.  In so
doing, it is the Committees responsibility to maintain an open avenue of
communication between the Committee, the external auditors, the internal
auditors and management of the Corporation.  The function
of the Committee is oversight. 
Management is responsible for the preparation, presentation and
integrity of the interim and annual financial statements and related disclosure
documents.  Management of the Corporation
is also responsible for maintaining appropriate accounting and financial
reporting policies and systems of internal controls and procedures that are in
compliance with accounting standards, applicable laws and regulations and that
provide reasonable assurances that assets are safeguarded and that transactions
are authorized, executed, recorded and reported properly.  While the
Committee has the responsibilities and powers set forth herein, it is not the
duty of the Committee to plan or conduct audits or to determine that the
Corporations financial statements are complete and accurate and in accordance
with generally accepted accounting principles. 
This is the responsibility of management and the external auditors.  The designation of a member or members as an
audit committee financial expert is based on that individuals education and
experience, which the individual will bring to bear in carrying out his or her
duties on the Committee.  Designation as
an audit committee financial expert
does not impose on such person any duties, obligations and liability that are
greater than the duties, obligations and liability imposed on a member of the
Committee and Board in the absence of such designation.  Management is
also responsible for the identification and management of the Corporations
risks and the development and implementation of policies and procedures to
mitigate such risks.  The Committees
role is to provide oversight in order to ensure that the Corporations assets
are protected and safeguarded within reasonable business limits.  C.Duties and Responsibilities of the Committee  The Committee
shall have the following specific duties and responsibilities:  1.Audit and Financial
Matters  The Committee
shall:  (a)have
direct responsibility for the compensation and oversight of the external
auditors including nominating the external auditors to the Board for
appointment by the shareholders at the Corporations general annual
meeting.  In performing its function, the
Committee shall:  (i)review the experience and qualifications of the external auditors
senior personnel who are providing audit services to the Corporation and the
quality control procedures of the external auditors, including obtaining
confirmation that the external auditors are in compliance with Canadian and
U.S. regulatory registration requirements;  (ii)review and approve annually the external auditors audit plan;


A-4   (iii)review and approve the basis and amount of the external auditors
fees and ensure the Corporation has provided appropriate funding for payment of
compensation to the external auditors;  (iv)review and discuss with the external auditors all relationships that
the external auditors and their affiliates have with the Corporation and its
affiliates in order to determine the external auditors independence,
including, without limitation, (i) requesting, receiving and reviewing, at
least annually, a formal written statement from the external auditors
delineating all relationships that may reasonably be thought to bear on the
independence of the external auditors with respect to the Corporation,
(ii) discussing with the external auditors any disclosed relationships or
services that the external auditors believe may affect the objectivity and
independence of the external auditors, and (iii) recommending that the
Board take appropriate action in response to the external auditors report to
satisfy itself of the external auditors independence;  (v)resolve disagreements
between management and the external auditors regarding financial reporting;  (vi)pre-approve all audit related services including all non-prohibited
non-audit services provided by the external auditors; the Chair of the
Committee, is authorized to approve all audit related services including
non-prohibited non-audit services provided by the external auditors, and shall
report all such approvals to the Committee at its next scheduled meeting;  (vii)inform the external auditors and management that the external
auditors shall have direct access to the Committee at all times, as well as the
Committee to the external auditors; and  (viii)instruct the external auditors that they are ultimately accountable
to the Committee as representatives of the shareholders of the Corporation;  (b)review
with management and the Corporations external auditors the   Corporations financial reporting in
connection with the annual audit and the preparation of the financial
statements, including, without limitation, the annual audit plan of the external
auditors, the judgment of the external auditors as to the quality, not just the
acceptability, of and the appropriateness of the Corporations accounting
principles as applied in its financial reporting and the degree of
aggressiveness or conservatism of the Corporations accounting principles and
underlying estimates;  (c)review
with management and the external auditors all financial statements and
financial disclosure;  (i)recommend to the Board for approval the Corporations audited annual
financial statements including the notes thereto and, Managements Discussion
and Analysis;  (ii)review any report or opinion to be rendered in connection therewith;  (iii)review with the external auditors the cooperation they received
during the course of their review and their access to all records, data and
information requested;


A-5   (iv)discuss with management and the external auditors all significant
transactions which were not a normal part of the Corporations business;  (v)review the management processes for formulating sensitive accounting
estimates and the reasonableness of the estimates;  (vi)review with management and the external auditors any changes in
accounting principles and their applicability to the business;  (vii)review with management and the external auditors alternative
treatments of financial information within generally accepted accounting
principles that have been discussed with management, ramifications of the use
of such alternative disclosures and treatments and the treatment preferred by
the external auditors;  (viii)satisfy itself that there are no unresolved issues between
management and the external auditors that could reasonably be expected to
materially affect the financial statements;  (d)review
with management and the external auditors the Corporations interim financial
statements, including the notes thereto, Managements Discussion and Analysis
and earnings release, and approve the release thereof by management to the
public;  (e)review
and discuss with management and external auditors the use of pro forma or
adjusted non-GAAP information and the applicable reconciliation;  (f)on
behalf of the Committee, the Chair shall review all public disclosure of
material financial information extracted or derived from the Corporations
financial statements;  (g)review
with management at least annually the approach and nature of financial
information and earnings guidance to be disclosed to analysts and rating
agencies;  (h)review
and recommend to the Board for approval the Corporations issuance and
redemption of securities, financial commitments and limits, and any material
changes underlying any of these commitments;  (i)at
least annually, obtain and review the external auditors report with respect to
the auditing firms internal quality-control procedures, any material issues
raised by the most recent internal quality-control review or peer review of the
auditing firm, any inquiry or investigation by governmental or professional
authorities within the preceding five years undertaken respecting one or more
independent audits carried out by the external auditors, and any steps taken to
deal with any such issues;  (j)review
quarterly with senior management, the chief legal officer and, as necessary,
outside legal advisors, and the Corporations internal and external auditors,
the effectiveness of the Corporations internal controls to ensure the
Corporation is in compliance with legal and regulatory requirements and with the
Corporations policies;  (k)review quarterly with the
chief legal officer, and, if necessary, outside legal advisors, significant
legal, compliance or regulatory matters that may have a material effect on the
financial statements of the business;


A-6   (l)review
and consider, as appropriate, any significant reports and recommendations made
by internal audit relating to internal audit issues, together with managements
response thereto;  (m)review
changes in accounting practices or policies and the financial impact these may
have on the Corporation;  (n)discuss
with the external auditors their perception of the Corporations financial and
accounting personnel, any recommendations which the external auditors may have,
including those contained in the management letter, with respect to improving
internal financial controls, choice of accounting principles or management
reporting systems, and review all management letters from the external auditors
together with managements written responses thereto;  (o)review
with management, the external auditors and, as necessary, internal and external
legal counsel, any litigation, claim or contingency, including tax assessments,
that could have a material effect upon the financial position of the
Corporation, and the manner in which these matters may be, or have been,
disclosed in the financial statements;  (p)review
annually the Annual Pension Report and financial statements of the
Corporations pension plans including the actuarial valuation, asset/liability
forecast, asset allocation, manager performance and plan operating costs;  (q)together
with the Human Resources Committee of the Board, review annually and as
required the overall governance of the Corporations Pension Plans, approve the
broad objectives of the plans and report to the Board annually;  (r)review
annually the internal audit departments charter, the scope and plans for the
work of the internal audit group the adequacy of the groups resources, the
internal auditors access to all functions, records, property and personnel of
the Corporation and inform the internal auditors and management that the
internal auditors shall have unfettered access to the Committee, as well as the
Committee to the internal auditors;  (s)meet
separately with management, the external auditors and internal auditors to
review issues and matters of concern respecting audits and financial reporting;  (t)review
the annual audit of expense accounts and perquisites of the Directors, the CEO
and his direct reports, including the use of the Corporations assets, as well
as the Corporations annual sponsorship, donations and political contributions;  (u)review
managements processes relating to the assessment of potential fraud, programs
and controls to mitigate the risk of fraud and the process put in place for
monitoring the risks within targeted areas;  (v)review
with the Corporations senior financial management and the Vice-President
Internal Audit the adequacy of the Corporations systems of internal control
and procedures;  (w)review
disclosures made to the Committee by the CEO and Chief Financial Officer (the
CFO) during their certification process for the relevant periodic reports
filed with securities regulators to ensure that information required to be
disclosed is recorded, processed, summarized and reported within the time
periods specified for the reporting period. 
Obtain assurances from the CEO and CFO as to the adequacy and effectiveness
of the Corporations disclosure controls and procedures and systems of internal
control over financial reporting and that any fraud involving management or
other employees who have a significant role in the Companys internal controls
was reported to the Committee;


A-7   (x)ensure
that the Corporations business practices and ethical behaviours are
communicated to employees and contractors on an annual basis, to review at
least annually the Corporate Code of Conduct and the policies and practices in
place to ensure compliance.  Inquire of
the internal and external auditors as to any instances of deviation from the
Corporate Code of Conduct which has come to their attention and the action
taken as a result of same;  (y)establish
procedures for the receipt, retention and treatment of complaints received by
the Corporation regarding accounting, internal accounting controls or auditing
matters and the confidential, anonymous submission by employees of concerns
regarding accounting or auditing matters;  (z)review
all incidents, complaints or information reported through the  Ethics Help Line and/or management;  (aa)review
disclosure made to the Committee by the chief executive officer, chief
financial officer and/or chief legal officer of a material violation of
applicable securities laws, a material breach of a fiduciary duty under
applicable laws or a similar material violation by the Corporation or by any
officer, director, employee or agent of the Corporation, which has been
reported to the Committee, determine whether an investigation is necessary
regarding any such report and report to the board;  (bb)discuss with
management and the external auditors any correspondence from or with regulators
or governmental agencies, any employee complaints or any published reports that
raise material issues regarding the Corporations financial statements or
accounting policies;  (cc)report
annually to shareholders or on the work of the Committee during the year;  (dd)review and approve
the Corporations hiring policies for employees or former employees of the
external auditors and monitor the Corporations adherence to the policy;  (ee)recommend
to the Human Resources Committee the appointment and termination or transfer of
the Vice-President, Internal Audit.  2.Risk Management  The Committee provides oversight of
managements establishment of an overall risk culture for the Corporation.  The Committee shall oversee and approve the
processes established and developed by management for the identification of the
Corporations principal risks, the evaluation of potential impact and the
implementation of appropriate systems to mitigate and manage the risks.  The Committee shall:  (a)review
annually with the Board managements assessment of the significant risks to
which the Corporation is exposed; discuss with management the Corporations
policies and procedures for identifying and managing the principal risks of its
business in order to ensure that management:


A-8   (i)has identified
appropriate business strategies taking into account the principal risks
identified, and  (ii)is maintaining
systems and procedures to manage or mitigate those risks, including programs of
loss prevention, insurance and risk reduction and disaster response and
recovery programs;  (b)receive
and review managements quarterly risk assessment update including an update on
residual risks, emergent risks and next steps;  (c)review
the Corporations enterprise risk management framework and reporting
methodology;  (d)review
annually the Corporations Financial and Commodity Exposure Management Policies
and approve changes to such policies; review and authorize strategic hedging
program guidelines and risk tolerance; review and monitor quarterly results of
financial and commodity exposure management activities, including foreign
currency and interest rate risk strategies, counterparty credit exposure and
the use of derivative instruments;  (e)review
the Corporations annual insurance program, including the risk retention
philosophy and resulting uninsured exposure and corporate liability protection
programs for directors and officers including directors and officers
insurance coverage;  (f)periodically
consider the respective roles and responsibilities of the external auditor, the
internal audit department, internal and external counsel concerning risk
management of the Corporation and review their performance in relation to such
roles and responsibilities; and  (g)annually,
together with management report to the Board on:  (i)the
Corporations strategies in light of the overall risk profile of the
Corporation;  (ii)the
nature and magnitude of all significant risks;  (iii)the
processes, policies, procedures and controls in place to manage or mitigate the
significant risks; and  (iv)the
overall effectiveness of risk management processes including highlighting risk
management problems and the actions that have been or will be taken to address
them.  D.Compliance
and Powers of the Committee  (a)The
responsibilities of the Committee complies with applicable Canadian laws and
regulations, such as the rules of the Canadian Securities Administrators,
and with the disclosure and listing requirements of the Toronto Stock Exchange,
as they exist on the date hereof.  In
addition this Charter complies with the applicable US laws, such as the
Sarbanes-Oxley Act, and the rules and regulations adopted thereunder, and
with the New York Stock Exchanges corporate governance standards, as they
exist on the date hereof.  This Charter
is reviewed from time to time by the Corporate Secretary together with the
Chair of the Committee in order to ensure on going compliance with such
standards.  (b)The
Committee may, at the request of the Board or on its own initiative,
investigate such other matters as are considered necessary or appropriate in
carrying out its mandate.


B-1   APPENDIX B  GLOSSARY OF TERMS  This Annual
Information Form includes the following defined terms:  AEUB means the Alberta Energy and
Utilities Board;  Alberta PPA means an Alberta government
mandated power purchase arrangement;  availability means the weighted average
equivalent availability factor, which is a term used to calculate availability
for a pool or fleet of units of varying sizes. 
It is a measure of time and energy expressed in percentage of continuous
operation, 24 hours a day, 365 days a year, that a generating unit is capable
of generating electricity, whether or not it is actually generating
electricity;  capacity means net maximum capacity that a
unit can sustain over a period of time;  gigawatt hour or GWh means one million kilowatt hours of
electrical power;  kilowatt or kW means 1,000 watts of electrical power;  kilowatt hour or kWh means one hour during which one
kilowatt of electrical power has been continuously produced;  megawatt or MW means 1,000 kilowatts or one million watts of electrical
power;  megawatt hour or MWh means 1,000 kilowatt hours;  PPA means a power purchase agreement
having an initial term of five years or greater;  watt means the scientific unit of
electrical power, being the rate of energy use that gives rise to the
production of energy at a rate of one joule per second;  watt hour is a measure of energy
production or consumption equal to one watt produced or consumed for one hour;
and  WPPI means the Government of Canadas Wind
Power Production Incentive available to approved wind generation facilities
commissioned between April 1, 2002 and March 31, 2007.