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THE CHAIRPERSON: Good morning, ladies and gentlemen.

On behalf of the board of directors, it's my pleasure

to welcome you to the annual meeting of the

shareholders of TransAlta Corporation.

The board and management very much appreciate

your interest and attendance today, and my name is

Donna Soble Kaufman. As chair of the board of

TransAlta, I will be chair of the meeting this morning.

Our corporate secretary, Maryse St.-Laurent,

will act as secretary of the meeting, and she is seated

here on the far right.

I'd also like to introduce Steve Snyder, who I'm

sure is known to many of you. Steve is President and

Chief Executive Officer of TransAlta.

I would also like to introduce Brian Burden, our

Chief Financial Officer.

Our meeting is being webcast live, and I'd like

to also welcome all those shareholders in our Internet

broadcast audience. We also welcome those of you who

are not shareholders to this meeting.

I would remind you that only shareholders or

proxy holders are entitled to vote or take an active

part in the formal business of the meeting.

After the end of the formal business, I will

make some comments from a board perspective.

Mr. Burden will present the Chief Financial Officer's

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report, and Mr. Snyder will present the Chief Executive

Officer's report.

Following these presentations, there will be

time for any questions that you may have for me or any

of the TransAlta management team.

Before I call the meeting to order, I would like

to ensure that everyone here today is familiar with the

location of the emergency exits, should an emergency

arise. Please note that there are two fire exits

located to the left and right of me. In case of

disruption of power, the exit signs will be

illuminated. Should this occur, or any other

emergency, please proceed calmly to the nearest exit.

I will now call the TransAlta Corporation annual

meeting to order.

We will first go through the formal parts of the

meeting. Mrs. Sandra Evans and Mr. Simon Law of CIBC

Mellon Trust, our transfer agent, are in attendance

today, and I appoint them to act as scrutineers for the

meeting.

I asked Ms. St.-Laurent to file a copy of the

notice of this meeting, which was mailed on March 31st

of this year to shareholders of record on March 2nd of

2009. A copy of the notice and proof of service will

be filed with the records of the meeting.

The scrutineers have provided me with a

preliminary report on attendance. In fact, they

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haven't, and, Ms. St.-Laurent, how many shareholders

are there present in person or by proxy? Do we have

that number?

MS. ST.-LAURENT: Yes, we do. We have 2,031

shareholders holding 88,952,303 common shares for a

representation of 44.96 percent of our outstanding

shares.

THE CHAIRPERSON: Excellent, thank you. I therefore

declare from that information that a quorum is present

at this meeting, and the meeting is properly

constituted for the transaction of business. A copy of

the scrutineers' report will be filed with the records

of the meeting.

In order to have today's meeting move smoothly,

we have asked a number of shareholders who are

employees and shareholders of TransAlta to move and

second the motions to be put before the meeting.

A copy of the minutes of the last annual meeting

of shareholders held on April 22nd, 2008, is available

on a table at the back of the room. I declare that the

minutes have been verified and signed and are filed in

the corporation's minute book. Anyone wishing a copy

of the minutes may pick one up from the table located

outside the room.

The next item of business is the receipt of the

consolidated financial statements of the corporation

and the auditor's report for the year-end of December

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31st, 2008.

The consolidated financial statements of the

corporation and auditor's report contained on pages 66

to 111 of our annual report were mailed to shareholders

in accordance with securities law requirements,

together with the notice of this meeting. Copies are

available on the table at the back of the room, and I

request the secretary to file a copy of the annual

report with the minutes of this meeting.

Mr. Ryan MacDonald, a representative of Ernst &

Young, the auditors of the corporation, is available at

this meeting to answer questions during the general

question period.

Now, the next item of business is the election

of directors. The board has set the number of

directors to be elected at this meeting at 11. We are

satisfied that this number of directors is appropriate

to provide a significant range and depth of experience

and expertise and to meet all corporate governance

requirements.

I would like to introduce the directors standing

for election to the board and ask that the directors

stand when I call their name.

William D. Anderson. Mr. Anderson is a resident

of Toronto, Ontario, and has been a director since

2003. He was president of BCE Ventures, a subsidiary

of BCE Inc. from 2001 to 2005, and chief financial

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officer of BCE from 1998 to 2000.

Bill has extensive financial experience and has

executed numerous transactions, as well as corporate

and operational restructurings. He is a chartered

accountant and a member of the Institute of Chartered

Accountants of Ontario.

Bill is a director of Gildan Activewear Inc. and

MDS Inc. and chairs their respective audit committees.

Mr. Anderson is chair of the Audit and Risk Committee.

Stephen L. Baum. Mr. Baum is a resident of

Exeter, New Hampshire, and was appointed to the board

of directors on July 22nd, 2008.

He was chairman and CEO of Sempra Energy from

1996 to 2006. Previous to that, he was president, CEO,

and vice-chairman of Sempra Energy. He was also CEO

and a member of the board of directors of Enova

Corporation, the parent company of San Diego Gas &

Electric where he served in various officer positions,

including general counsel.

Mr. Baum is a director of Computer Science

Corporation and chairs its audit committee. He is also

a senior advisor to SkyFuel Inc.

Mr. Baum is a member of the Audit and Risk

Committee and of the Human Resources Committee.

Stanley J. Bright. Mr. Bright is a resident of

Oxford, Maryland, and has been a director since 1999.

He was president, CEO, and chairman of

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MidAmerican Energy Company from 1997 to '99, and

president, CEO, and chairman of predecessor companies,

including the Iowa-Illinois Gas and Electric Company

from 1991 to 1997.

He was also a director of MidAmerican Energy

Holdings Company until February 2006 and of predecessor

companies from 1987.

Mr. Bright is chair of the Human Resources

Committee.

Timothy W. Faithfull. Mr. Faithfull is a

resident of Oxford, England, and has been a director

since 2003. He is a 36-year veteran of Royal

Dutch/Shell plc and was formerly president and CEO of

Shell Canada Limited.

Mr. Faithfull has extensive experience with

commodity exposure and risk management due to his

experience directing the global crude oil trading

operation of Shell International Trading & Shipping

Company.

He is a director of Canadian Pacific Railway;

AMEC plc; the Shell Pension Trust in the UK; and

Enerflex Systems Income Fund.

Mr. Faithfull is a member of the Audit and Risk

Committee and of the Human Resources Committee.

Ambassador Gordon D. Giffin. Ambassador Giffin

is a resident of Atlanta, Georgia, and has been a

director of TransAlta since 2002.

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He is a senior partner of the law firm McKenna

Long & Aldridge. Ambassador Giffin served as

United States Ambassador to Canada from 1997 to 2001.

Prior to his appointment, he practiced law for 18 years

where he focused on energy regulatory work at the state

and federal levels.

Gordon is a director of Canadian National

Railway Company, Canadian Imperial Bank of Commerce,

Canadian Natural Resources Limited, and Ontario Energy

Savings Limited. He is also a member of the Council of

Foreign Relations and on the advisory board of the

Canadian American Business Council.

Ambassador Giffin is chair of the Governance and

Environment Committee.

C. Kent Jespersen. Mr. Jespersen is a resident

of Calgary, Alberta, and has been a director since

2004. Mr. Jespersen is chair and CEO of La Jolla

Resources International Limited, and he has also held

senior executive positions with NOVA Corporation of

Alberta, Foothills Pipe Lines Limited, and Husky Oil.

He is chairman and a director of Orvana Minerals

Limited, CCR Technologies Limited, and a director of

Matrikon Inc., Axia NetMedia Corporation, and CanElson

Drilling Limited.

Kent is a member of the Governance and

Environment Committee and of the Human Resources

Committee.

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Michael M. Kanovsky. Mr. Kanovsky is a resident

of Calgary, Alberta, and has been a director since

2004. Michael is a professional engineer and is an

independent businessman. He has extensive business

experience in the development and foundation of energy

in electrical energy companies.

He is a director of Argosy Energy Corporation,

ARC Energy Trust, Bonavista Energy Trust, Devon Energy

Corporation, and Pure Technologies Limited.

Mr. Kanovsky is a member of the Audit and Risk

Committee and of the Governance and Environment

Committee.

Gordon S. Lackenbauer. Mr. Lackenbauer is a

resident of Calgary, Alberta, and has been a director

since 2005. Prior to joining the board, he was deputy

chairman of BMO Nesbit Burns where he was responsible

for the principal activities of the firm, which

included fixed income sales and trading, new issue

underwriting, syndication, and merger and acquisitions

advisory mandates.

He is a director of NAL Oil & Gas Trust and CTV

Globemedia.

Mr. Lackenbauer is a member of the Audit and

Risk Committee and of the Governance and Environment

Committee.

Dr. Martha C. Piper. Dr. Piper is a resident of

Vancouver, British Columbia. She has been a director

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since 2006. Before joining the board, she was

president and vice-chancellor of the University of

British Columbia. Prior to that she was vice-president

of research at the University of Alberta.

She's 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.

Martha is an officer of the Order of Canada and

a recipient of the Order of British Columbia.

Dr. Piper is a member of the Governance and

Environment Committee and of the Human Resources

Committee.

Stephen G. Snyder. Mr. Snyder, TransAlta's

president and chief executive officer, is a resident of

Calgary and has been a director since 1996.

Steve has guided TransAlta through its evolution

from an Alberta-focused regulated utility to an

international power generator. He is a director of the

Canadian Imperial Bank of Commerce and chair of the

Calgary Stampede Foundation and the Alberta Secretariat

for Action on Homelessness.

Donna Soble Kaufman. I am a resident of

Toronto, Ontario, and have been a director of TransAlta

since 1989. I've been chair of the board since 2005.

I'm a former partner of Stikeman Elliott, an

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international law firm, where I practiced antitrust

law. I also serve as a director of BCE Inc. and Bell

Canada.

I'm a director of Historica, a fellow of the

Institute of Corporate Directors, and a member of the

Canadian advisory board of Catalyst, a nonprofit

organization working to advance women in business.

These are the individuals being proposed for

election at this meeting.

I would now like to open the meeting for

nominations of directors to serve for the following

year.

MR. HAWKINS: My name is Frank Hawkins, I am a

shareholder, and I nominate William D. Anderson,

Stephen L. Baum, Stanley J. Bright, Timothy W.

Faithfull, Ambassador Gordon D. Giffin, C. Kent

Jespersen, Michael M. Kanovsky, Gordon S. Lackenbauer,

Dr. Martha C. Piper, Stephen G. Snyder, and Donna Soble

Kaufman to be elected as directors of the corporation

to hold office until the next annual meeting of

shareholders or until their successors are elected or

appointed.

THE CHAIRPERSON: Thanks, Frank.

Are there any further nominations?

(NO RESPONSE)

THE CHAIRPERSON: Hearing none, I declare nominations

closed.

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Since the number of nominees does not exceed the

number of directors to be elected by the shareholders,

I would request a motion that the nominees be elected

as directors of the corporation to hold office until

the next annual meeting of shareholders or until their

successors are elected or appointed.

MR. RIDGE: My name is Martin Ridge. I'm a

shareholder, and I so move.

MS. de LIMA: My name is Dawn de Lima. I am a

shareholder, and I second the motion.

THE CHAIRPERSON: Thank you, Martin, Dawn.

All in favour?

Contrary, if any?

I declare the motion carried.

The next item of business is the appointment of

auditors.

I would request a motion that Ernst & Young LLP

be appointed auditors of the corporation to hold office

until the close of the next annual meeting of

shareholders at such remuneration as shall be fixed by

the board of directors.

MS. PIERCE: My name is Jennifer Pierce, and I am a

shareholder, and I so move.

MR. SCHAEFER: My name's Rob Schaefer, I am a

shareholder, and I second the motion.

THE CHAIRPERSON: Thank you.

All in favour?

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Contrary, if any?

I declare the motion carried.

The scrutineers have completed their report on

shareholder attendance at the meeting.

Thank you.

The count indicates that 2,035 common

shareholders are present in person and by proxy,

representing 88,960,244 common shares. Accordingly,

44 percent of the outstanding common shares are

represented at this meeting.

With the consent of the meeting, I now declare

the formal business of the meeting at an end. However,

before I turn the podium over to Brian Burden and Steve

Snyder, I'd like to make a few remarks of my own.

I'm delighted to be speaking to you again as

chair of TransAlta's board of directors. I've been a

shareholder and director of TransAlta for many years,

and during my time on the board, I've seen a number of

changes in the company and in the power industry

itself.

I'm pleased to note that throughout these

changes, your board has remained committed to building

a strong and sustainable company, a company that will

continue to deliver profitable growth over time.

One of the few constants we face in the nature

of our business is the nature of the business itself.

It is a long-cycle business that requires a disciplined

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focus on basic strategic priorities and a firm

commitment to strong corporate governance. We have not

wavered from this approach, and never have we seen it

validated more strongly than by the economic downturn

we are experiencing today.

Despite these difficult times, TransAlta's

financial condition remains healthy. Our commitment to

meet the needs of our customers reliably is as deep as

ever, and we are firm in our resolve to actively pursue

a disciplined growth strategy.

In keeping with the spirit of this year's annual

report, while other committees appear to be powering

down, TransAlta is steadfastly powering on.

Your board of directors and senior management

team strive to create sustainable shareholder value by

consistently investing in our people, by maintaining a

strong balance sheet, and low to moderate risk profile

by adhering to a balanced capital allocation plan.

This has been our consistent strategy for as long as I

have served on the board. This has meant continually

enhancing the effectiveness of our governance

practices.

It has been a contributing factor to the results

we have been able to achieve for our stakeholders, and

it's an approach that continues to serve us well.

It enables us to deliver consistent value to our

shareholders through the highs and lows of the market,

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and it positions us to perform strongly as we move

forward.

Last year, TransAlta's board of directors

continued its work to build a strong and sustainable

company. We focused on three key areas: TransAlta's

strategic plan, sustainable business practices, and our

corporate governance.

We took a hard look at our capital allocation

plans and priorities and scrutinized the risk factors

associated with our business and our plans for growth.

With regard to capital allocation, we put

everything under a microscope and remained where we

have been for some time now, reaffirming our long-term

phased approach to investing in growth projects, while

returning capital to our shareholders. We also

fortified our enterprise risk management practices and

linked it directly to our governance process.

Paying a strong dividend is key to our value

proposition. In 2008, we were pleased to adopt a

dividend policy and increase our dividend by 8 cents a

share. In January 2009, the board again increased the

dividend, this time by 7 percent, demonstrating to

shareholders that as our earnings grow, our dividend

will also grow.

This past year we were very pleased that

Canada's IR magazine selected TransAlta's investor

relations program as the best in the utility and

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pipeline sector. This publication commissions an

annual independent research survey covering a broad

cross-section of the investment community.

We were also named to the North American

Dow Jones Sustainability Index for a third consecutive

year. TransAlta is one of 22 Canadian companies on the

index and one of only two Canadian companies in the

utility sector. Inclusion in the sustainability index

is granted to companies that lead their industries

toward sustainability by setting standards for best

practices and demonstrating superior environmental,

social, and economic performance.

TransAlta has significant investments in

renewable resources and sources of energy and carbon

capture and storage throughout our Project Pioneer. We

believe our position as the leader in sustainable

business practices gives us an important competitive

edge.

TransAlta's commitment to an ethical culture and

strong corporate governance gives us a solid foundation

from which to operate.

This is crucial in light of increasing change

and the global instability we've been witnessing. We

are not merely following North America's changing

governance standards; we continue to lead the way.

It was a real honour for us to be recognized for

the seventh consecutive year by the Globe and Mail as

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one of the best governed corporations in Canada and the

number one utility for corporate governance.

We were also recognized as the leader by the

Conference Board of Canada for a national award in

governance for our approach to enterprise risk

management. In citing us for the award, their advisory

committee stated, TransAlta's board of directors:

"...has been innovative and has worked

smart on issues that go to the core of

its business success and

sustainability."

I'm happy to say that last year we made our strong

board even stronger with the addition of Stephen L.

Baum. As I said earlier, Mr. Baum was chairman and

chief executive officer of Sempra Energy, a San

Diego-based Fortune 500 energy services holding

company. He brings tremendous experience to the

TransAlta board. He's a member of our audit and risk

committee and human resources committee.

This year Luis Vásquez Senties decided not to

seek re-election to our board. I'd like to personally

thank Luis for eight years of very valuable service to

our board of directors. His contribution to TransAlta

were numerous. He will be missed by all his

colleagues.

I know we must work to retain and earn your

trust every day and every year. As we go forward, your

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board of directors will continue its proven approach to

overseeing TransAlta's business from an economic,

environmental, and social perspective. We have a

strong balance sheet, sustainable business practices,

and excellent governance; a winning combination that

bodes well for profitable growth.

In closing, I would like to thank our management

team and the 2,200 TransAlta employees for another

solid year. We have superb people, a proven and

sustainable strategy, and a strong balance sheet: an

excellent formula for long-term success.

To you, our shareholders, my sincere thanks for

your continued support.

I would be pleased now to ask Brian Burden to

come forward for his remarks.

Thank you.

(APPLAUSE)

MR. BURDEN: Thank you for the introduction, Donna,

and, good morning, ladies and gentlemen.

Before I begin by formal remarks, let me remind

you that all information provided during the annual

general meeting is subject to the forward-looking

statement qualification which is outlined in this

slide. The amounts referenced in this presentation are

in Canadian currency unless otherwise stated.

Today I will review our financial strategy with

you and the results TransAlta has been able to achieve.

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I will report on the company's financial performance in

2008 and provide you with a quick look at what we

believe is a very positive track record over the last

five years.

I will also provide a look at our first quarter

2009 results, what to expect for the remainder of the

year, and finish with a review of our financial

strength, and how our disciplined capital allocation

continues to support sustainable shareholder value

creation.

First, our financial strategy. While capital

markets around the world have changed drastically over

the last year, our financial strategy has not. It has

not changed because it is premised on maintaining a

low-to moderate-risk business model that can create

value through all market cycles, including the current

recessionary environment that we're in today. And this

is paramount in our long-cycle capital intensive and

cyclical industry.

Our financial strategy focuses on three key

fundamentals: They are, one, maintain a strong balance

sheet and investment-grade credit ratios that provide

us with access to capital at competitive rates,

financial flexibility through our market cycles, and

the ability to contract with high-quality

counterparties for the long term.

Secondly, having a well-balanced capital

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allocation plan that both reinvests in the business and

returns capital to shareholders.

And thirdly, focusing on three key financial

measures, internal rate of returns on a project basis,

portfolio returns on capital employed, and total

shareholder return.

Let's now look at our financial results. 2008

was another strong year for TransAlta. As you can see

from the charts on the right, it was our fifth

consecutive year of providing significant comparable

earnings per share growth and solid cash flow from

operations.

2008 comparable earnings were up 11 percent to

290 million or $1.46 per share, and cash flow from

operations hit a record of just over 1 billion. Return

on capital employed increased to 9.8 percent, just

short of our 10 percent goal.

As most companies found, 2008 was a challenge

for total shareholder return, which fell well below

expectations, given the unprecedented market

volatility. However, we fully believe that if we

continue to focus on and implement our strategy

diligently, this will return to positive territory.

2008 comparable earnings growth was driven by

increased electricity pricing in Alberta and the

Pacific Northwest, greater merchant production, and

record earnings from our energy trading business.

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Net earnings for the year were 235 million, or

$1.18 per share, compared to 309 million, $1.53 per

share, in 2007. And the decreasing net earnings was

primarily driven by the writedown upon sale of our

Mexico business and higher income taxes for the

corporation.

Cash flow from operations for the year was

driven by higher cash earnings and favourable movements

in working capital. And also in 2008, we received 13

PPA payments compared to 12 in 2007.

So overall we achieved and even exceeded our

goals of generating low double-digit comparable

earnings per share growth and delivering 850 to 950

million in cash flow from operations in 2008.

For 2009, despite difficult market conditions,

TransAlta still expects to achieve growth in comparable

earnings per share and maintains strong cash flow from

operations because of our contracting strategy. The

shape of our earnings this year, however, will be

different from previous years.

To address the higher-than-expected boiler leaks

at our Alberta thermal units and to take advantage of

the low pricing in the Alberta market, we significantly

advanced our major maintenance plans into the first and

second quarters of 2009.

In the first quarter, we had over 700 gigawatt

hours of planned maintenance activities. In addition,

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we had the misfortune of the derate on our Sundance 4

unit due to the failure and repair of an induced draft

fan. As a result, our first quarter comparable

earnings were 36 million, or 18 cents per share,

compared to 99 million, or 50 cents per share, a year

ago.

Net earnings for the quarter were slightly

higher compared to the first quarter of 2008 due to the

writedown of our Mexico business last year. Our net

earnings for the quarter were 42 million, or 21 cents

per share, compared to 33 million, or 17 cents per

share, over the same period a year ago.

Looking ahead, we have 1,800 gigawatt hours of

major maintenance activities planned for the second

quarter, but only 500 gigawatt hours planned in the

second half of the year. With this in mind, we still

expect to deliver single-digit comparable earnings per

share growth for the year.

Cash flow from operations for the quarter was

83 million down from 237 million a year ago. Cash flow

in the quarter was lower than the previous year due to

lower cash earnings and due to an extra PPA payment of

116 million received in Quarter 1 of 2008. And for the

four-year, we expect to deliver between 750 to

850 million in cash flow from operations.

I would now like to turn to one of the most

top-of-mind topics for investors today, balance sheet

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strength and financial flexibility.

Our financial ratios are well within the

thresholds that we have established to help maintain

our investment-grade status. As of March the 31st,

they were as follows: Cash flow to interest coverage

was 66 times -- 6.6 times. Our minimum target is 4

times. Our cash flow to debt was 29.9 percent. Our

minimum target is 25 percent, and our debt to total

capital was 46.5 percent with a maximum threshold of

55 percent.

We also maintain ample liquidity through access

to both Canadian and US debt markets, strong contracted

cash flows, as well as committed credit facilities of

2.2 billion. And as of March the 31st, we had

1.5 billion available to us.

This combined with a very manageable debt

repayment schedule of only 244 million in 2009 and

almost nothing in 2010 leaves us with a financial

flexibility to sustain our dividend and meet our

current obligations. It also allows us to choose when

we go to market, and as a result, we maintain a very

competitive cost of capital.

The last topic I want to cover today is our

approach to capital allocation, and Donna has touched

on this.

It has not changed. We continue to be

disciplined and balanced in how we allocate capital,

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and we remain focused on key elements, which include

returning capital to shareholders through dividends and

share buy-back, asset investment, and portfolio

optimization.

TransAlta is a business with strong generation

of free cash flow. Over the next several years, we

expect to generate, on average, 850 to 950 million per

year of cash flow from operations. And when we

subtract a normalized sustaining Capex of 265 million,

debt repayments and non-controlling interest payments

of 125 million, and our important dividend of 230

million, we are still left with 230 to 330 per year of

free cash flow to allocate.

And clearly, again as Donna has said, we remain

committed to providing a strong dividend to our

shareholders, as evidenced by the board's decision in

January to increase the annual dividend by 7 percent to

1.16 per share.

As it relates to share buy-back, it is always an

option open to us. The board evaluates this at each

and every meeting and compares returns on growth

projects against it.

And we are also committed to investing in

growth. Growth is key to our long-term sustainability,

and we remain very diligent and disciplined in our

approach. All of the projects that we invest in must

provide unlevered free cash after tax internal rate of

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returns of greater than 10 percent, and all of our

current investments exceed this hurdle, and we'll add

long-term cash flows to our bottom line for decades to

come.

And in addition to growing our capacity, we

continue to invest in our current fleet to improve

availability and performance and to optimize our

portfolio of assets through productivity initiatives.

We expect all of our productivity initiatives to have

pay-backs of less than 24 months and should provide

returns therefore in excess of 15 to 20 percent. And

in 2009, we plan to invest 50 million in those type of

productivity projects.

Ultimately, though, our goal is to continue to

drive the right balance in all of our capital

allocation decisions to generate both short and

long-term sustainable profitability and higher capital

returns, higher returns on capital employed for our

shareholders.

So in summary, TransAlta's financial position

today is as strong as it's ever been. The results we

are achieving with our financial strategy clearly

demonstrate that it is working. Our earnings and cash

flow continue to grow. Our return on capital employed

continues to improve. Our balance sheet remains

strong, and we maintain ample liquidity and an

investment-grade credit rating.

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All of this combined provides us with great

financial flexibility and positions us well, not only

in the current market turmoil, but also for the future.

With that, let me turn the podium over to Steve.

Thank you.

(APPLAUSE)

MR. SNYDER: Well, thank you, Brian and Donna, for

your remarks, and, good morning, ladies, gentlemen, and

fellow shareholders.

A quick reminder that following my presentation,

we will do the question-and-answer period, and

following that there will be a lunch served in the

hallway just outside here. So once again, I get the

privilege of being the person between the questions and

the lunch. Don't let that stop you from asking a lot

of questions, please.

Now, as Brian and Donna have said, 2008 was a

good year for the company. Since our last annual

general meeting, we have achieved record comparable

earnings per share, record cash flow from operations,

higher returns on capital employed, and a double-digit

improvement in our safety performance. We also grew

our company.

Our teams delivered 96-megawatt Kent Hills wind

farm facility on time and on budget. And, in addition,

six other growth projects are currently underway in

Alberta.

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Our long-term commitment to a strong balance

sheet was strongly rewarded in 2008 and continues to be

in 2009. It meant that last year we could invest in

growth, return capital to our share owners, including

212 million in dividends, and end the year in strong

financial shape.

But we also faced some challenges: Our key issue

was disappointing performance from our Alberta thermal

operations. They experienced a higher number of boiler

leaks. The scope and quality of the work done on our

boilers in prior years wasn't enough, so, simply put,

we need to put more steel into our units. We are

already seeing positive results from the accelerated

maintenance plans we instituted to correct this issue.

For the past five years, TransAlta has

demonstrated a solid track record of performance.

We've done what we said we were going to do. Now, that

said, we do not spend a lot of time at TransAlta

looking back in the rear-view mirror.

Even though we will be celebrating our 100th

anniversary throughout 2010, we've developed a very

focused strategy to take our company forward.

The hallmarks of it are clear, simple, and

straightforward: Focus on geographies where we have

scale and expertise, diversify our assets in terms of

fuel and age and contract length, maintain a strong

balance sheet, pay a strong dividend, and always plan

27

for the long cycles, and stay disciplined.

Now, our past investments are paying off for us

and providing a platform for even more profitable

growth. We own excellent fuel resources for wind, for

geothermal, and small-scale hydro. They are our number

one focus right now. We have natural gas expertise.

Those opportunities are our next wave to exploit.

In long term, our belief is that emerging

technology will allow our coal reserves to continue to

play a key role in North America's electricity supply.

From an operational perspective, three keys to

our success are cost discipline, long-term maintenance

planning, and safety. Our primary goal is to run our

assets for as long as economically profitable. Every

plant has a sweet spot for availability versus costs,

and our operation teams are focused upon finding this

spot for each and every one of our plants, then

executing on their plans to run them as efficiently as

possible and as safely as possible. And without a

doubt, that is the forefront of everything we do.

While we already have one of our industry's

lowest injury frequency rates, we continue to strive to

achieve a target of zero.

I would like to briefly address now the issue of

environmental leadership. For almost two decades,

TransAlta has earned a reputation as an environmental

leader for our actions to increase the energy

28

efficiency of our operations, reduce harmful air

emissions, and invest in renewable energy.

We were the first to build super-critical

coal-fired facilities in Canada, and our Centralia

thermal facility is one of the cleanest coal plants in

the United States.

As Donna, our chair, has mentioned, TransAlta

was recognized once again by the Dow Jones

Sustainability Index.

We were the first Canadian energy company to

participate in a wind power project in a major scale,

and we are currently one of Canada's largest wind

energy producers.

We own and operate significant hydroelectric

assets. And since 2000, we have invested nearly

1 billion in other forms of renewable energy, including

geothermal facilities. Today, renewable energy

accounts for more than 15 percent of our generation

capability, and that percent will continue to grow.

Now, TransAlta shares the view that our

industrial emissions need to be managed down over time.

We have been saying this for years, and we continue to

demonstrate corporate leadership to accomplish ways and

means to achieve this goal.

Besides investing in renewable energy, it

includes leading our efforts to promote, develop, and

commercialize carbon capture and storage.

29

Reducing Canada's CO2 emissions is the only

responsible approach to take. It's why we support

establishing targets and support technology development

with a goal to have carbon-neutral coal-fired

generation over the longer term.

We always need to remind ourselves that the

climate change challenge isn't about fuel sources, as

many would like to believe. It's ultimately about

changing our behaviours and reducing our impact on the

environment.

So at TransAlta we look forward to a dialogue

with our stakeholders and others across Canada's energy

sector to determine the best way forward. We need to

bring together our best technology, policy ideas,

private investment, and innovation to address this

issue.

We also have to do it in a way that preserves

the integrity and reliability of our electrical power

supply. We simply must avoid the unnecessary

destruction of valuable capital and unnecessary

constraint of our natural resources.

The key issues are timing and optionality. We

could not simply close coal-fired before we have a

viable alternative in place, nor can we afford to

abandon coal so long as there is a realistic

possibility, such as carbon capture, of cutting our

emissions from our most abundant and least expensive

30

fuel resource. This is one of the most important

issues of our time, and TransAlta is ready to help lead

the way.

The bottom line is, we can get there, but reason

needs to dominate our dialogue across this very, very

important issue. And I'll speak more about our plans

for addressing these challenges in a few minutes.

So here we are in 2009 and looking ahead at the

years to come. Because of the strategy I've outlined

for you, your company remains well positioned to

succeed. Despite the extremely tough market

conditions, I still see opportunity to deliver earnings

growth and strong cash flow this year.

Prior to entering the year, we had contracted

90 percent of our capability. As a result, we have

minimized much of our exposure to today's depressed

power markets.

Our primary focus for this year is to complete

the scheduled maintenance on our Alberta thermal units

and restore our units to their traditional to their

high availability factors. The majority of that work

will be done by the end of July.

In recessionary times, we must also be focused

on driving even greater efficiency in our business and

reducing administrative costs wherever we can.

Earlier this week, I announced that we would

consolidate all of our operations and commercial groups

31

under the leadership of a chief operating officer.

This move will ensure we have a full focus on these

engines of our company. We are fortunate to have Dawn

Farrell in this new role. She's a proven leader who

delivers results. She has put into place a streamlined

organization so that our operations are even better

integrated to drive improved performance.

I'd also like to take this opportunity to thank

Richard Langhammer for his 23 years of service to

TransAlta. Richard announced earlier this year he will

retire at the end of 2009. He will now devote, in the

interim period, his considerable skills and experience

helping all of our functions drive sustainable cost

improvements.

Let me end my remarks today with some words on

one of the most pressing issues that I talked about

earlier, the environment.

Last year I spoke to you about the need for the

energy industry to break the triple E equation that has

sustained it, Canada, and much of the world for a very,

very long time.

And that equation is that economic health is

linked to energy growth, which is linked to

environmental impact. I also said there is no silver

bullet, not here in Canada, and certainly not in the

rest of the world.

Canada, with all its natural resource

32

production, still only represents 2 percent of the

world's CO2 emissions, and TransAlta is a decimal point.

Even if we could stop all of our CO2 production

tomorrow, it would not make a significant difference in

the world, but it would cripple the Alberta economy.

Now, that does not mean we should stand on the

sidelines and let others do the heavy lifting.

Where we can make a difference is by using our

unparalleled experience in resource production,

engineering technology, and our abundant resources to

advance the development of new technologies that will

capture CO2 from existing industrial facilities. When

you look around the world, coal and other fossil fuels

represent over 60 percent of the global electricity

supply.

That means that carbon capture is one of the few

technologies we have that can make actual major

physical greenhouse gas reductions. It needs to be

tested for scale and for integration, but the

technology does look promising.

The bigger unknown for carbon capture are the

costs. Clearly it must be both technically capable and

cost-competitive to be a viable option for CO2

reduction. Development plants must be built, and they

will play a major role in determining these costs.

However, these early projects are clearly not

commercial at this stage, and it's why they must be

33

supported by government funding.

Ultimately I see carbon capture being

competitive with large-scale hydro or nuclear, as well

as with renewable resources like solar.

At TransAlta, we are actively involved in

developing this technology. Last year we announced

Project Pioneer in partnership with Alstom Canada, a

world leader in power generation technology. We will

develop a large-scale carbon capture facility at one of

our coal-fired plants right here in Alberta.

Project Pioneer, as we are calling it, once

built, will be one of the first and will be the largest

such project in the world and will eliminate over

1 million tons per year of CO2 from the atmosphere.

We are very, very proud of this project and

believe it will provide the Canadian power industry,

the province of Alberta, and Canada with the

opportunity to lead the world on climate change.

I began my remarks today talking about

TransAlta's 100-year history by providing electricity

across our great province. We are very, very proud of

our heritage. We're also very excited about the

company's future and our plans to provide power to

future generations.

We built this business upon a sustainable

strategy, one that will allow us to continue to earn

the right to operate our plants in communities and

34

deliver value to our shareholders for the very long

term.

As CEO and as shareholders, we are fortunate to

have over 2200 employees who work here. They are

dedicated, they are driven, they are resilient, and you

also have a great board. They know the industry, they

know their job, and they do it well.

All deserve our thanks. But most of all, I want

to thank you, our shareholders, for your ongoing

confidence in an investment in our great company.

Thank you for joining us today. Thank you for being a

shareholder, and we'll now open the floor to questions.

(APPLAUSE)

MR. SNYDER: Microphones will be available in the

aisles. If you have a question, please raise your

hand. We will get a microphone to you.

UNIDENTIFIED SPEAKER: Do you think the United States

and Canadian governments are going to force a

cap-and-trade policy?

MR. SNYDER: At this point in time, I believe the

most likely outcome is a cap-and-trade program for

North America. The timing of that is uncertain. And

my own belief is that we will have to work closely with

the US, see what they do, and then be part of that

program. Just given the energy trade connections,

particularly between the two countries, it would be

very difficult to go separate ways, but I do believe it

35

will be a cap-and-trade program of some type.

MS. TELFER: Good afternoon. Thank you for your

comments. My name is Lindsay Telfer. I am

representing -- I guess I'm a proxy representative for

Sierra Club's owned -- or shares owned by the Sierra

Club.

So I was happy to hear part of your presentation

today and disappointed with a couple of other parts.

As you can imagine --

MR. SNYDER: Well, we're making progress, then,

so . . .

MS. TELFER: We at the Sierra Club believe that the

technology currently exists in the fields of renewable

energy, solar, wind, geothermal, and other renewable

energy opportunities to more than meet our electricity

demands.

We have significant concerns of the implement

ability of carbon capture and storage as a long-term

solution and especially the financial viability of that

technology.

I was disappointed a little bit to hear your

slide which attempts to minimize the role that we have

in reducing greenhouse gas emissions. The per capita

emissions of Canada are far greater than 2 percent, and

we have a significant role to play. And if everyone

took on that perspective, it's no wonder we're having

such struggle to meet our climate change obligations.

36

So my question -- my question is, if carbon

capture and storage proves unsuccessful and financially

irresponsible, will TransAlta commit to its

shareholders and to the communities that it operates in

to phase out its coal operations while investing

significantly in its renewable energy capacity?

MR. SNYDER: Yeah. Well, let's just look at the

carbon capture technology. As I mentioned in my

presentation, the one unknown is the cost factor. The

potential for that technology to effectively eliminate

carbon from the atmosphere has such great potential, I

believe it's worth the effort to try to see if it will

be cost-effective. And so I believe there should be

resources applied to that.

It would not only help Canada; it would help the

rest of the world deal with this issue, and I think we

have an obligation in Canada and beyond, and we are

serious about that, so we can play a role in Canada to

help advance that technology faster than it may in

countries without the wealth that we have. So we

should pursue that.

Clearly and beside that, as you heard, we are

investing heavily in renewables and will continue to do

so. And we have always had a goal in TransAlta of net

zero emissions by 2025. There's various targets out

there, but we've had that. We believe we can still

achieve that, but a lot to do between now and that time

37

frame.

We have worked hard to reduce our intensity. I

would like, as you would, to see all Canadians do more.

And we are doing our effort to encourage that.

Are there any others, questions?

UNIDENTIFIED SPEAKER: Hello. I was just wondering,

did I hear your comments about the perceived value by

management and the board of directors versus the market

perceived value of it, the company shares?

MR. SNYDER: Well, our stock has done well, it

continues to do well. I think that reflects -- if

that's your question, if I'm answering it right, if the

value of stock is reflecting our programs. Have I got

the question correct?

UNIDENTIFIED SPEAKER: Well, basically what I'm

concerned about is that a few months ago we perceived

the value to be in the 40-dollar rate-per-share range.

Today it's 20 dollars, and that's . . .

MR. SNYDER: Yeah. Well, I guess we're one of

thousands of companies that are faced with that same

situation given the economic turmoil over the last six

months.

I think the test will be for companies,

including ours, how well companies recover from what

was a general market depression. I think you see some

signs, certainly in the last month or two, that our

stock is starting to respond. I think that

38

shareholders are realizing we have fundamental

strength, and we may be one of those companies that

actually does very well as we come out of this

recession, and let's hope that trend continues.

It's clear that very few companies could say

they're at the same valuation today they were six

months ago. I wish it wasn't the case; it is. In the

face of that reality, our task is to see how quickly we

get it back up and outpace our competition in doing

that. I believe we will do that. In the meantime, you

will receive a dividend.

(APPLAUSE)

MR. SNYDER: Is there any other questions before

we -- yes, sir?

MR. POSSENRIEDE: My name is Franz Possenriede

(phonetic). I'm a shareholder. I'd like to ask the

board of directors, management, can we keep this

wonderful, nice company here in Canada and be traded

still in Toronto and the market? My biggest worry is

we losing en masse the finest and the best companies in

Canada, and we become a colony, eventually, and I don't

like that.

I want to keep this company here in Canada, and

I want to be a shareholder here. I'm alive, and maybe

I'm not much more to live, but I like to be a

shareholder till I die. Please.

(APPLAUSE)

39

MR. SNYDER: Yeah. Well, given the tenure of your

voice, I think you're going to live a long time, so

we'll have you as shareholder for many years to come.

(APPLAUSE)

MR. SNYDER: It's a simple answer, I guess, is for us

to continue to deliver tremendous results and keep the

company growing and profitable. That's our best

strength about that, something happening. That's what

we're determined to do. We've got a five-year track

record. We're going to try for another five years, and

if we're delivering those results, our valuation is

such that we'll be fine, thank you. That's the

obligation of the board and management, and we take it

seriously, and you'll see us working hard every day to

do that, and hopefully five years from now, we'll still

be here, and you'll be here, and we'll all be happy.

MR. POSSENRIEDE: But the company stays in Canada.

MR. SNYDER: Yeah, and stay in Canada.

MR. POSSENRIEDE: That is important.

MR. SNYDER: Thank you.

MR. JOMARSKI: Hello. I'm Barry Jomarski

(phonetic), I'm a shareholder. You discontinued the

discount on the drip plan for the wee, little investor

who wants to keep on growing their TransAlta shares.

Are you considering reinstating the discount on

the dividends that are generating in the drip plan?

MR. SNYDER: Yeah. We do not have a plan right now

40

to do that, but it is something that we continuously

look at, and we will keep revisiting that.

MR. JOMARSKI: Thank you, because other companies

are installing the discount now, and so we're going

against the trend here, such as the Bank of

Nova Scotia, et cetera.

MR. SNYDER: Well, we'll see how the trend emerges,

and we'll revisit that.

UNIDENTIFIED SPEAKER: Yeah. Mr. Snyder, you've made

some remark about eliminating CO2 from the atmosphere.

I would like to remind you that would cause the end of

life on Earth, so that's not going to happen.

But I'd like -- you have made no comment, no one

has made a comment here about the viability of possible

nuclear power within the western provinces which are

hydro poor.

MR. SNYDER: Yeah, yeah.

UNIDENTIFIED SPEAKER: And although coal rich, I see

the federal government is putting some caps on the use

of coal.

MR. SNYDER: Yeah.

UNIDENTIFIED SPEAKER: That was announced today.

MR. SNYDER: Yeah. Well, certainly -- my belief and

the company's belief is that ultimately we will need

every fuel resource we can get to deliver the energy

that the consumer is going to demand and industry will

demand. So I believe nuclear will need to be part of

41

that mix.

It will certainly be part of the mix in eastern

Canada. Could it be part of the mix in western Canada?

I think that's possible. It's not an area of our

expertise, but we do have expertise in wind, we do have

expertise in small-scale hydro. We do have expertise

in geothermal, and we do have expertise in natural gas,

and as a company we will aggressively pursue those

options. And whether nuclear will play a role in

western Canada remains to be seen, but it's certainly

possible, and may over the very long term be one of the

fuel sources out here.

UNIDENTIFIED SPEAKER: Thank you. One concern I have

had is that, as a rule, the dividends that have come to

us shareholders has been quite good, and your company

has been progressing well.

Also I noticed by the book of the (INAUDIBLE)

here that the directors' salaries have been -- done

very well. And I wondered in these times if there

might be a little more austerity on their part and a

little more -- well, the basic number says $30 target

at least, on our part, the trader.

MR. SNYDER: Well, I don't know if I want to take

that question on or not, but . . .

(LAUGHTER)

MR. SNYDER: Maybe I should let the Chair respond to

that, but . . .

42

You know, I am sincere in the comments I made at

the end of my presentation. We have a superb board.

They keep management on its toes. They work hard, and

I think we're in good hands with them.

Were those the right words?

(LAUGHTER)

MR. SNYDER: I mean it sincerely, so thank you.

UNIDENTIFIED SPEAKER: Our concern is that you don't

forget the shareholder who has helped to make your

company progress as it has.

MR. SNYDER: Yeah.

Do we have any other comments or questions

before we'll call the meeting to a close?

Again, thank you for coming. We, the directors

and management team, will be available outside if you

have specific questions. Thank you for your support,

and can you terminate the meeting, Madam Chair, then?

THE CHAIRPERSON: I think we both can.

MR. SNYDER: Okay.

THE CHAIRPERSON: I'd just like to add my thanks to

Steve's. Thank you all for joining us. We thank you

for your participation. We look forward to chatting

with you further outside over a good lunch.

Thanks a lot, and we hope to see you next year.

(APPLAUSE)