<SEC-DOCUMENT>0001137171-16-000391.txt : 20161202
<SEC-HEADER>0001137171-16-000391.hdr.sgml : 20161202
<ACCEPTANCE-DATETIME>20161202172458
ACCESSION NUMBER:		0001137171-16-000391
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20161202
FILED AS OF DATE:		20161202
DATE AS OF CHANGE:		20161202

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TRANSALTA CORP
		CENTRAL INDEX KEY:			0001144800
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-15214
		FILM NUMBER:		162032074

	BUSINESS ADDRESS:	
		STREET 1:		110 12TH AVE SW BOX 1900 STATION M
		STREET 2:		CALGARY ALBERTA T2P 2MI
		CITY:			CALGARY
		STATE:			A0
		ZIP:			T2P2M1
		BUSINESS PHONE:		403-267-4724

	MAIL ADDRESS:	
		STREET 1:		110-12TH AVENUE SW
		CITY:			CALGARY ALBERTA CANADA
		STATE:			A0
		ZIP:			T2P2M1
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>transalta6k12022016.htm
<DESCRIPTION>TRANSALTA CORPORATION - 6-K
<TEXT>
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<P STYLE="font: bold 14pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-align: center">UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-align: center"><B>FORM 6-K</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-align: center"><B>REPORT OF FOREIGN PRIVATE ISSUER PURSUANT
TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 24pt">For the month of December, 2016</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>TRANSALTA CORPORATION</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Translation of registrant&rsquo;s name into
English)</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>110-12<SUP>th</SUP> Avenue S.W., Box 1900,
Station &ldquo;M&rdquo;, Calgary, Alberta, T2P 2M1</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">(Address of principal executive offices)</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt">Form 20-F____ &#9;Form 40-F <U>X </U></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt">Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____</P>


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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>DOCUMENTS INCLUDED AS PART OF THIS FORM 6-K</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">See the Exhibit Index hereto.</P>

<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase"><B>Signatures</B></FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 24pt; text-indent: 0.5in">Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 24pt 3in"><B>TRANSALTA CORPORATION</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 12pt Times New Roman, Times, Serif; border-collapse: collapse"><TR STYLE="vertical-align: top"><TD STYLE="padding-right: 9.9pt; padding-left: 5.4pt; width: 50%">Dated: December 2, 2016</TD>
      <TD STYLE="padding-right: 9.9pt; padding-left: 5.4pt; width: 50%"><B>TransAlta
        Corporation</B></TD>
    </TR>
<TR STYLE="vertical-align: top">
      <TD STYLE="padding-right: 9pt; padding-left: 5.4pt">&nbsp;</TD>
      <TD STYLE="padding-right: 9pt; padding-left: 5.4pt">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: top">
      <TD STYLE="padding-top: 16px; padding-right: 5.4pt; padding-left: 336px"></TD>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">By: <U>/s/ John Kousinioris<FONT STYLE="font-size: 10pt">&#9;</FONT></TD>
    </TR>
<TR STYLE="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left"></TD>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">Name: John Kousinioris&#9;</TD>
    </TR>
<TR STYLE="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left"></TD>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left">Title: &#9; Chief Legal and Compliance Officer<BR>
&#9; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and Corporate Secretary</TD></TR></TABLE>


<p style="font: 12pt Times New Roman, Times, Serif; margin: 0 0 6pt">&#9;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"></P>


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<P STYLE="font: 12pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 12pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: center">EXHIBIT INDEX</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 12pt"><B><U>EXHIBIT NUMBER</U></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; font: 12pt Times New Roman, Times, Serif">99.1</TD>
    <TD STYLE="width: 85%; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; font: 12pt Times New Roman, Times, Serif"><a href="mcr.htm">Material change report dated December 2, 2016</a></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font: 12pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">99.2</TD>
    <TD STYLE="font: 12pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt"><a href="agreement.htm">Off-Coal Agreement among TransAlta Corporation, TransAlta Generation Partnership, TransAlta Cogeneration, L.P., Keephills 3 L.P. and Her Majesty the Queen in Right of Alberta dated November 24, 2016.</a></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>2
<FILENAME>agreement.htm
<DESCRIPTION>OFF-COAL AGREEMENT AMONG TRANSALTA CORPORATION, TRANSALTA GENERATION PARTNERSHIP, TRANSALTA COGENERATION, L.P., KEEPHILLS 3 L.P. AND HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA DATED NOVEMBER 24, 2016.
<TEXT>
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<head>

<title>JA Filed by Filing Services Canada Inc. 403-717-3898</title>
</head>

<body>

<P STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0.25in; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0.25in; text-transform: uppercase; text-align: center"><B>Exhibit
99.2</B></P>

<P STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 0.25in; text-transform: uppercase; text-align: center">OFF-COAL
AGREEMENT</P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt"><B>THIS AGREEMENT</B> (&quot;<B>Agreement</B>&quot;)
made as of the 24th day of November, 2016.</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt"><B>AMONG</B>:</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center"><B>TRANSALTA CORPORATION</B><BR>
(&quot;<B>Company</B>&quot;)</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">- and &ndash;</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center"><B>TRANSALTA GENERATION PARTNERSHIP</B></P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">(&ldquo;<B>TGP</B>&rdquo;)</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">-and-</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center"><B>TRANSALTA COGENERATION L.P.</B></P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">(&ldquo;<B>TCLP</B>&rdquo;)</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">-and-</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center"><B>KEEPHILLS 3 L.P.</B></P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">(&ldquo;<B>K3LP</B>&rdquo;)</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">-and-</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center"><B>HER MAJESTY THE QUEEN IN RIGHT
OF ALBERTA,</B></P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">as represented by the Minister
of Energy</P>

<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: center">(&quot;<B>Province</B>&quot;)</P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt"><B>RECITALS:</B></P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt">WHEREAS the Province has determined that it is in the
public interest to ensure that no more carbon dioxide and other air contaminants emanate from the combustion of coal after 2030;</P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt">WHEREAS the Province accordingly requires the Company
to cease operations that produce Coal-Fired Emissions at the Plants in accordance with the Alberta Climate Leadership Plan released
by the Province in November 2015;</P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt">WHEREAS the Province has determined that it is in the
public interest to maintain a positive investment environment while ensuring that workers and communities affected by the coal
phase out are supported;</P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt">WHEREAS the Company is an Affiliate of each of K3LP,
TGP and TCLP, and K3LP has a fifty percent co-ownership interest in Keephills Generating Station Unit 3, TGP has a fifty percent
co-ownership interest in Genessee Generating Station Unit 3, and TCLP has a fifty percent co-ownership interest in Sheerness Generating
Station Units 1 and 2; and</P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt">In consideration of the mutual promises and obligations
contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the
Parties, the Parties agree as follows:</p>

<p style="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt"></p>

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<p style="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">1.</FONT></TD><TD>DEFINITIONS</TD></TR></TABLE>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in"><FONT STYLE="font-weight: normal">In
this Agreement, the following terms shall have the following defined meanings:</FONT></P>

<P STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in">&quot;Affiliate&quot; <FONT STYLE="font-weight: normal">has
the meaning contemplated for that term in the <I>Securities Act</I>, RSA 2000 c. S-4 as amended to the date hereof;</FONT></P>

<P STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in">&ldquo;Affected Companies&rdquo;
<FONT STYLE="font-weight: normal">means Capital Power Corporation and ATCO Ltd.;</FONT></P>

<P STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in">&ldquo;Coal-Fired Emissions&rdquo;
<FONT STYLE="font-weight: normal">means emissions into the atmosphere from the combustion of coal including air contaminants such
as sulphur dioxide, nitrogen oxides, mercury, primary particulate matter, and carbon dioxide and other specified gases as defined
in the <I>Climate Change and Emissions Management Act</I> and regulations thereunder;</FONT></P>

<P STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in"><FONT STYLE="font-weight: normal">&quot;</FONT>Parties<FONT STYLE="font-weight: normal">&quot;
means, collectively, the Company, TGP, TCLP and the Province, and &ldquo;</FONT>Party<FONT STYLE="font-weight: normal">&rdquo;
means any one of them; </FONT></P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in"><B>&ldquo;Plant Owners&rdquo;</B> means
K3LP, TGP and TCLP, and &ldquo;<B>Plant Owner</B>&rdquo; means any one of them;</P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in">&quot;<B>Plants</B>&quot; means the
coal powered electricity generation plants known as Keephills Generating Station Unit 3, Genessee Generating Station Unit 3, Sheerness
Generating Station Unit 1 and Sheerness Generating Station Unit 2<B>; </B>and</P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in">&quot;<B>Transition Payment</B>&quot;
has the meaning set forth in Section 3(a) of this Agreement.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">2.</FONT></TD><TD>CESSATION OF COAL-FIRED EMISSIONS</TD></TR></TABLE>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt">The Company shall cause the Plant Owners to ensure and
each of the Plant Owners shall ensure that the Plants will cease Coal-Fired Emissions from the Plants on or before December 31,
2030. It is understood and agreed that in respect of any Plant where the Company or a Plant Owner holds less than a 100% interest
in the applicable Plant, this covenant applies only to the extent of the electricity production owned, controlled and dispatched
by the applicable Plant Owner from that Plant. For greater certainty, nothing in this Agreement shall prevent or restrict any Plant
from generating electricity at any time by any method other than by the combustion of coal.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">3.</FONT></TD><TD><FONT STYLE="text-transform: uppercase">payments</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(a)</FONT></TD><TD>Subject to the Company meeting the eligibility conditions in Section 5 and the obligations in Sections 6 and 7, the Province
covenants and agrees to pay to, or as directed by, the Company fourteen (14) annual payments each of $39,851,704.60 (in aggregate,
the &ldquo;Transition Payment&rdquo;).</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(b)</FONT></TD><TD>The Transition Payment shall be paid in annual payments of $39,851,704.60 on or before July 31 in each year commencing in 2017,
with the first payment being payable on or before July 31, 2017, and the last payment being payable on or before July 31, 2030.
The Company shall provide bank account payment instructions for payment to the Province concurrently with the execution of this
Agreement, and thereafter in accordance with a notice under Section 11(k) of this Agreement.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(c)</FONT></TD><TD>If the Company fails to meet the eligibility conditions in Section 5 and meet the obligations in Sections 6 and 7 and fails
to cure such failure within 90 days of notice from the Province (without regard for the original time by which an
eligibility condition was to be satisfied or performance was to occur, if any), then the Province shall not be required to make
any further unpaid payments under this Agreement. The Province&rsquo;s sole rights and remedies in the case of the Company&rsquo;s
failure to meet any of the eligibility conditions in Section 5 or to perform any of the obligations in Sections 6 and 7 or to cure
any of such foregoing failures are provided in this Section 3(c) provided that, in the event the Company brings an action contrary
to Section 7, then the Province shall be entitled to raise Section 7 as a defence to such an action.</TD></TR></TABLE>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt 1in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(d)</FONT></TD><TD>If the Company or any of the Plant Owners fail to fulfill the covenant in Section 2, then, in addition to any other remedies
the Province may have at law (including injunctive relief), the Company shall repay the full amount of the Transition Payment actually
received by the Company under this Agreement.</TD></TR></TABLE>

<p style="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt"></p>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">4.</FONT></TD><TD>EQUIVALENT RIGHTS</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-weight: normal">(a)</FONT></TD><TD><FONT STYLE="font-weight: normal">The Parties acknowledge that the Province is under no legal obligation to compensate or otherwise
pay any amount to the Company as result of the phase out of Coal Fired Emissions (other than under the terms of this Agreement);
nevertheless, the Province determined the amount of the Transition Payment in accordance with the formula attached in Schedule
A hereto. If the Province enters into a similar off-coal agreement with any of the Affected Companies or their Affiliates and uses
a different formula that, if applied to the Company, would result in a materially higher Transition Payment, then the Province
will pay the difference to the Company in equal increments over the remaining annual payment dates. In this section, &quot;materially
higher&quot; means a difference of at least $5 million over 14 years. </FONT></TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-weight: normal">(b)</FONT></TD><TD><FONT STYLE="font-weight: normal">The parties further acknowledge that the Province relied on information from the Company
in relation to some of the inputs into the formula, specifically, the net book value of the Plants. If, as a result of a review
or examination under Section 6, the Province determines, acting reasonably, that the net book value is lower than the value provided
by the Company, then the Province may recalculate the Transition Payment and reduce the Transition Payment on the basis of the
formula attached in Schedule A hereto.</FONT></TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">5.</FONT></TD><TD>ELIGIBILITY FOR PAYMENT</TD></TR></TABLE>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt">During the period commencing on the date of this Agreement
and ending on December 31, 2030, the Company will comply with the following eligibility conditions:</P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(a)</FONT></TD><TD>The Company, on a consolidated basis, shall spend a minimum of <FONT STYLE="background-color: black">XXXXXXXXXXXX</FONT> each
calendar year on investment and investment related activities in Alberta with respect to its electricity business. For purposes
of this Section 5(a), &ldquo;investment and investment related activities&rdquo; includes:</TD></TR></TABLE>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD>any and all capital expenses of any nature or kind, including new capital investments, sustaining capital expenditure or major
maintenance capital expenditure; and</TD></TR></TABLE>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD>any and all development costs or expenses of any nature or kind, including those incurred in relation to the preparation
                                                              or submission of bids, production or procurement of studies, including technical feasibility studies and environmental impact assessments, obtaining, maintaining or appealing
regulatory approvals, stakeholder engagement, and planning; and</TD></TR></TABLE>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt 1.5in"></P>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD>any and all costs of infrastructure development, construction, maintenance, or decommissioning;</TD></TR></TABLE>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt 0.5in; text-indent: 0in"></p>

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<p style="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt 0.5in; text-indent: 0in">including in each of the foregoing
clauses (i) to (iii) in respect of any coal-to-gas conversion of the Plants.</P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD>The Company shall continually maintain a significant business presence in the Province of Alberta by:</TD></TR></TABLE>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(i)</FONT></TD><TD>maintaining its registered and head office in Alberta;</TD></TR></TABLE>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(ii)</FONT></TD><TD>maintaining employment of at least <FONT STYLE="background-color: black">XXXXXX</FONT> employees in Alberta; and</TD></TR></TABLE>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(iii)</FONT></TD><TD>continuing to generate electricity or otherwise participating in the electricity market in Alberta;</TD></TR></TABLE>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt 1in; text-indent: 0in">provided, that, in the event that
a majority of the shares of the Company are acquired by an arm&rsquo;s length third party or substantially all of the assets of
the Company are transferred to an arm&rsquo;s length third party, the condition related to the head office shall no longer apply.
In the event the Province provides a notice to the Company under Section 3(c) of a failure to meet an eligibility condition in
this Section 5(b) which was to be continuously met and the Company cures such failure within the cure period, such failure will
be deemed never to have occurred for the purposes of this Section 5(b).</P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(c)</TD><TD>The Company, on a consolidated basis, shall each calendar year provide <FONT STYLE="background-color: black">XXXXXXXXX</FONT>
towards programs and initiatives to support the communities surrounding the Plants and the employees of the Company and employees
of the Plant Owners negatively affected by the phase out of coal-fired generation at the Plants which may include programs and
initiatives recommended by the Advisory Panel on Coal Communities.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(d)</TD><TD>The Company shall fulfill its existing and future legal obligations to affected employees, including severance and pension
obligations.</TD></TR></TABLE>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in"><B>6.&#9;REPORTING </B></P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD>The Company will deliver a report, certified by a senior officer (without personal liability), to the Minister of Energy and
the Minister of Economic Development and Trade (or their respective successors) each year by May 31 confirming that, as of the
prior December 31, the eligibility conditions in Section 5 were satisfied and providing reasonable detail in respect of such confirmation
and such further information as the Province may reasonably request in relation to the Company&rsquo;s performance of its obligations
and fulfilling the eligibility conditions under this Agreement.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD>The Company will permit the Province or the Province&rsquo;s representative, on reasonable notice, during normal business
                                                               hours, to examine and take copies of the records of the Company in relation to the performance of its obligations and meeting
                                                               the eligibility conditions under this Agreement and in relation to any information provided by the Company or the Plant
                                                               Owners in the course of negotiating this Agreement related
to the net book value of the Plants. The Province shall treat the information made available to the Province under this Section
6(b) in substantially the same manner as if it was &ldquo;Confidential Information&rdquo; under the Confidentiality Agreement between
the Province, the Company and other parties dated April 1, 2016.</TD></TR></TABLE>

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<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in"><B>7.&#9;NO ACTIONS</B></P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD>Subject to the provisions of Section 7(b), neither the Company nor any Plant Owner shall commence any legal action against
the Province or any provincial agency, including the Independent System Operator and the coal facilitator, with respect to the
phase out of Coal-Fired Emissions from the Plants, including with respect to the mines, coal supply agreements, mining contracts
or mining equipment related to the coal used to fuel the Plants, or alleging any other cause of action in relation to the phase
out of Coal Fired Emissions from the Plants;</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(b)</FONT></TD><TD>Notwithstanding the provisions of Section 7(a), nothing in this Agreement shall prevent the Company or any Plant Owner from
commencing any legal action against the Province or any provincial agency with respect to:</TD></TR></TABLE>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(i)</FONT></TD><TD>the enforcement of its rights under this Agreement;</TD></TR></TABLE>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(ii)</FONT></TD><TD>any power purchase arrangement (as defined under the <I>Electric Utilities Act </I>(Alberta)) to which the Company or a Plant
Owner is a party;</TD></TR></TABLE>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(iii)</FONT></TD><TD>the operation of its business in the ordinary course, including any regulatory or civil proceedings arising in respect thereof;
or</TD></TR></TABLE>

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<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(iv)</FONT></TD><TD>any matter not related to the phase out of Coal-Fired Emissions from the Plants.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: uppercase">8.</FONT></TD><TD><FONT STYLE="text-transform: uppercase">Representations and Warranties</FONT></TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD>The Company and each of the Plant Owners represents and warrants to the Province, and acknowledges that the Province is relying
thereon, that it has all requisite corporate or partnership power, capacity and authority to enter into and deliver this Agreement
and to perform its obligations hereunder and this Agreement has been duly executed and delivered by it and constitutes a legal,
valid and binding obligation of it, enforceable against it in accordance with its terms, subject to the general qualifications
that: (i) enforcement may be limited by bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors' rights
generally; (ii) equitable remedies, including the remedies of specific performance and injunctive relief, are available only in
the discretion of the applicable court; (iii) the equitable or statutory powers of the courts in Canada having jurisdiction to
stay proceedings before them and the execution of judgments; and (iv) enforceability of provisions which purport to sever any provision
which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the remainder of
such document would be determined only in the discretion of the court.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD>The Province represents and warrants to the Company and the Plant Owners, and acknowledges that the Company and each of the
Plant Owners is relying thereon, that the Province has all requisite power, capacity and authority to enter into and deliver this
Agreement and to perform its obligations hereunder and this Agreement has been duly executed and delivered by the Province and
constitutes a legal, valid and binding obligation of the Province, enforceable against the Province in accordance with
its terms, subject to the general qualifications that: (i) the Province has a general immunity from execution or attachment or
similar process for enforcing payment by the Province of monetary judgments; (ii) equitable remedies, including the remedies of
specific performance and injunctive relief, are available only in the discretion of the applicable court and are generally not
available as remedies against the Province; (iii) the equitable or statutory powers of the courts in Canada having jurisdiction
to stay proceedings before them and the execution of judgments; and (iv) enforceability of provisions which purport to sever any
provision which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the remainder
of such document would be determined only in the discretion of the court.</TD></TR></TABLE>

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<P STYLE="font: bold 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in"><FONT STYLE="text-transform: uppercase">9.&#9;PUBLICITY</FONT></P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt; text-indent: 0in"><FONT STYLE="font-weight: normal">The
Company and the Province agree to coordinate their press releases with respect to this Agreement with each other and the matters
contemplated herein forthwith after the date hereof, including providing each other with advance copies of any press release. The
Province hereby consents to this Agreement being filed on the Company&rsquo;s profile on the System for Electronic Document Retrieval
and Analysis (SEDAR). </FONT></P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: uppercase">10.</FONT></TD><TD><FONT STYLE="text-transform: uppercase">Dispute resolution</FONT></TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(a)</FONT></TD><TD>If any dispute arises under or in connection with this Agreement that the Parties cannot resolve, either party may refer such
dispute to senior representatives (Executive Vice President or higher of the Company and Deputy Minister or higher of the Province)
of both Parties who have authority to settle the dispute by sending a notice of referral to the other Party. As soon as practicable
after receipt of the notice of referral but in any event within ten (10) Business Days, the senior representatives shall meet in
person to attempt to resolve the dispute. If no meeting of such senior representatives has taken place within 15 Business Days
after such referral or if the dispute has not been resolved within 30 days from the receipt of the notice of referral, either Party
may initiate proceedings in a court of law in respect of the dispute.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: #010000">(b)</FONT></TD><TD>The Parties submit to the exclusive jurisdiction of the courts in the Province of Alberta and the appellate courts therefrom.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: uppercase">11.</FONT></TD><TD><FONT STYLE="text-transform: uppercase">GENERAL</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD><U>Enurement</U>. This Agreement shall enure to the benefit of, and be binding upon, each of the Parties and their successors.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD><U>No Partnership or Other Relationship</U>. Nothing herein contained shall be read or construed as creating a partnership,
trust or agency relationship or as imposing upon any Party any partnership, trust, good faith or other duty, obligation or liability
of any kind, it being the express intention of the Parties that the respective rights, obligations and liabilities of each of the
Parties under this Agreement and in respect of the subject matter hereof generally, shall be contractual in nature as independent
contractors.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(c)</TD><TD><U>Severability</U>. If any provision of this Agreement is deemed to be unenforceable, in whole or in part, such provision
will be deemed to be severed from this Agreement and the remainder of this Agreement will remain enforceable to the fullest extent
permitted by law.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(d)</TD><TD><U>Waiver</U>. No failure or delay by a Party in exercising any right, power or privilege it has will operate as a waiver thereof,
nor will any single or partial exercise thereof preclude any other or future exercise thereof or the exercise of any other right,
power or privilege. No waiver of any provision shall be binding upon the Party unless the same is in writing and signed by the
Parties.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(e)</TD><TD><U>Choice of Law/Venue</U>. This Agreement shall be governed by the laws in force in the Province of Alberta and the federal
laws of Canada applicable therein.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(f)</TD><TD><U>Amendments</U>. This Agreement may not be amended except by written agreement of the Parties.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(g)</TD><TD><U>Term and Survival.</U> (i) Subject to Sections 11(g)(ii) and (iii), this Agreement shall take effect on the date first above
written and shall continue in full force until January 1, 2031 unless otherwise agreed to by the Parties in writing. (ii) Any provision
of this Agreement under which an obligation of one Party hereto has accrued but has not been discharged shall not be affected by
termination of this Agreement, nor shall the Party liable to perform be discharged as a result of any such termination, nor shall
termination prejudice any right of one Party against the other in respect of anything done or omitted hereunder prior to such termination
or in respect of any right to damages or other remedies. (iii) For greater clarity, the Company&rsquo;s and Plant Owners&rsquo;
obligation to ensure that the Plants cease Coal-Fired Emissions from the Plants shall survive the termination of this Agreement
indefinitely.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(h)</TD><TD><U>No Other Representations</U>. This document contains the entire agreement between the Parties as to the subject matter hereof
and supersedes all prior oral or written agreements and understandings between the Parties in respect of the subject matter hereof.
No other representations have been made relating to the subject matter hereof.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD><U>Time of the Essence</U>. Time is of the essence in this Agreement.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(j)</TD><TD><U>No Implied Covenants</U>. The Parties have expressed herein their entire understanding and agreement concerning the subject
matter of this Agreement. No implied covenant, condition or term shall be read into this Agreement, nor shall any prior oral or
written understanding entered into modify or compromise any of the terms and conditions herein.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(k)</TD><TD><U>Notices</U>. Any notices required or permitted hereunder shall be sent by courier or email to:</TD></TR></TABLE>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <td style="width: 58%; padding-left: 107.1pt; font: 10pt/115% Arial, Helvetica, Sans-Serif">The Province:</TD>
    <td style="width: 42%; padding-bottom: 11pt; padding-left: 0.25in; font: 10pt/115% Arial, Helvetica, Sans-Serif; text-indent: -0.25in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 11pt 107.3pt">Office of the Deputy Minister, Energy</p>
        <p style="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 11pt 107.3pt">8th Floor Petroleum Plaza NT</p>
        <p style="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 11pt 107.3pt">9945 - 108 Street</p>
        <p style="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 11pt 107.3pt">Edmonton, AB</p>
        <p style="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 11pt 107.3pt">T5K 2G6</P>
        <p style="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 0 107.3pt; text-align: left">&nbsp;</P></TD>
    <td style="font: 10pt/115% Arial, Helvetica, Sans-Serif; padding-bottom: 11pt; padding-left: 0.25in; text-indent: -0.25in; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <td style="font: 10pt/115% Arial, Helvetica, Sans-Serif; padding-left: 107.1pt; text-align: left">Attention: Deputy Minister of Energy<BR>
Email: coleen.volk@gov.ab.ca</TD>
    <td style="font: 10pt/115% Arial, Helvetica, Sans-Serif; padding-bottom: 11pt; padding-left: 0.25in; text-indent: -0.25in; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <td style="font: 10pt/115% Arial, Helvetica, Sans-Serif; padding-left: 107.1pt">&nbsp;</TD>
    <td style="font: 10pt/115% Arial, Helvetica, Sans-Serif; padding-left: 0.25in; text-indent: -0.25in">&nbsp;</TD></TR>

<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 0 107.1pt">The Company or the Plant Owners:</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 0 107.1pt">&nbsp;</P></TD>
    <td style="font: 10pt/115% Arial, Helvetica, Sans-Serif; padding-left: 0.25in; text-indent: -0.25in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 0 107.1pt">TransAlta Corporation</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 0 107.1pt">110-12<SUP>th</SUP> Avenue S.W.</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 0 107.1pt">Calgary, AB T2P 2M1</P></TD>
    <td style="font: 10pt/115% Arial, Helvetica, Sans-Serif; padding-left: 0.25in; text-indent: -0.25in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <td style="font: 10pt/115% Arial, Helvetica, Sans-Serif; padding-left: 107.1pt">&nbsp;</TD>
    <td style="font: 10pt/115% Arial, Helvetica, Sans-Serif; padding-left: 0.25in; text-indent: -0.25in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 0 107.1pt">Attention: Chief Legal Officer<BR>
        Email:-John_Kousinioris@transalta.com</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 0 107.1pt">&nbsp;</P></TD>
    <td style="font: 10pt/115% Arial, Helvetica, Sans-Serif; padding-left: 0.25in; text-indent: -0.25in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt 1in; text-indent: 0in">&nbsp;</p>

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<p style="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt 1in; text-indent: 0in">&nbsp;</p>

<p style="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt 1in; text-indent: 0in">Any such notices shall be effective
upon receipt. Each Party shall provide notice to the other Party of any change in its address or bank account information in accordance
with the notice provisions of this Section 11(k).</P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(l)</TD><TD><U>Interpretation</U>. The insertion of headings is solely for convenience of reference and shall not affect the interpretation
of any provision. Unless the context otherwise requires, words used herein importing the singular number only shall include the
plural and vice versa, and words importing the use of any gender shall include all genders. Where the word &quot;including&quot;
or &quot;includes&quot; is used in this Agreement, it means &quot;including (or includes) without limitation&quot;. The Parties
agree that the Company may fulfill its obligations hereunder through its Affiliates, provided that the liability of the Company
for performance by its Affiliates shall not be affected thereby. The terms &ldquo;this Agreement&rdquo;, &ldquo;hereof&rdquo;,
&ldquo;hereunder&rdquo; and similar expressions refer to this Agreement and not to any particular section or other portion hereof
and include any agreement supplemental thereto. &ldquo;Person&rdquo; shall be interpreted broadly and includes any individual,
partnership, association trust, body corporate or other entity. References to &ldquo;Section&rdquo; followed by a number or a letter
means and refers to the specified section or clause in this Agreement. All currency amounts in this Agreement are stated and shall
be paid in Canadian dollars</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(m)</TD><TD><U>Assignment</U>. Subject to Section 11(n), the Company may assign this Agreement with the prior written consent of the other
Parties, such consent not to be unreasonably withheld or delayed. It shall be reasonable for the Province to withhold consent if
the Province has reasonable grounds for insecurity with respect to the prospective assignee&rsquo;s ability to meet the obligations
in this Agreement. Notwithstanding the foregoing, (i) the Company and the Plant Owners may assign this Agreement to an Affiliate
that is controlled, directly or indirectly, by the Company without the consent of the other Parties provided the Company remains
liable to perform any obligations in this Agreement that such Affiliate fails to perform; and (ii) the Company or any Plant Owner
may assign the benefit of this Agreement, in whole or in part, as security for any indebtedness or financing of the Company or
any such Plant Owner without the consent of the other Parties. The Province may not assign this Agreement without the prior written
consent of the Parties. Notwithstanding the foregoing sentence, the Province may assign this Agreement to an Affiliate that is
controlled, directly or indirectly, by the Province without the consent of the other Parties provided the Province remains liable
to perform any obligations in this Agreement that such Affiliate fails to perform.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(n)</TD><TD><U>Transfer of Ownership of Plants. </U>The Company or the Plant Owners may transfer title to or ownership interest in all
the Plants with the consent of the Province, not to be unreasonably withheld, provided that the new owner agrees to be bound by
the terms of this Agreement, in which case the Company and the Plant Owners shall be released from their obligations hereunder.
It shall be reasonable for the Province to withhold consent if the Province has reasonable grounds for insecurity with respect
to the new owner&rsquo;s ability to meet the obligations in this Agreement. The Company or the Plant Owners may transfer ownership
of less than all the Plants, with the consent of the Province not
be unreasonably withheld, provided that (i) the new owner agrees to be bound by the terms of this Agreement in respect of such
transferred Plant or Plants and (ii) the Company remains liable to perform any obligations in this Agreement that such new owner
fails to perform. Notwithstanding the foregoing, the Company and the Plant Owners may transfer title to or an ownership interest
in all or less than all the Plants to an Affiliate that is controlled, directly or indirectly, by the Company without the consent
of the other Parties provided the Company remains liable to perform any obligations in this Agreement that such Affiliate fails
to perform.</TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(o)</TD><TD><U>Execution by Counterpart/Facsimile/PDF</U>. This Agreement may be executed in one or more counterparts (including delivery
in electronic PDF form), all of which shall be considered one and the same agreement. If a Party delivers a counterpart in electronic
PDF form, that Party shall promptly thereafter deliver to the other Party an originally executed counterpart.</TD></TR></TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(p)</TD><TD><U>No Third Party Beneficiary.</U> Notwithstanding anything contained herein to the contrary, the provisions of this Agreement
are not intended to be for the benefit of any other person to whom obligations are owed by, or who may have any claim against,
the Company, except for the Province. No such person shall obtain any rights under this Agreement or shall, by reason of this Agreement,
be permitted to make any claim against the Company nor shall any provision of this Agreement be, or construed to be, for the benefit
of any other third party.</TD></TR></TABLE>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt 1in; text-indent: -0.5in"><B><I>[The remainder of this
page has been left intentionally blank. Signature pages follow.]</I></B></P>


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<P STYLE="font: 10pt/normal Arial, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 12pt"><B>IN WITNESS</B> of the foregoing, this Agreement has
been executed by each Party as of the date specified above.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0"><B>HER MAJESTY THE QUEEN IN RIGHT OF ALBERTA, </B>as represented
        by the Minister of Energy</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="line-height: 115%"><B>TRANSALTA CORPORATION </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Per:</TD>
    <TD STYLE="width: 43%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&ldquo;<I>Margaret Ellen McCuaig-Boyd</I>&rdquo; </TD>
    <TD STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 6%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Per:</TD>
    <TD STYLE="width: 41%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&ldquo;<I>Brett Gellner</I>&rdquo; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0">Signature</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Signature</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Margaret Ellen McCuaig-Boyd</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Brett Gellner </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0">Print Name</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Print Name</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Minister of Energy </TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Chief Investment Officer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0">Title</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">Title</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 3pt 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding: 3pt 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding: 3pt 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding: 3pt 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding: 3pt 5.4pt; line-height: normal">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding: 3pt 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%"><B>TRANSALTA GENERATION PARTNERSHIP</B>,<B> by its manager, TRANSALTA CORPORATION</B></FONT></TD>
    <TD STYLE="padding: 3pt 5.4pt; line-height: normal">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding: 3pt 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%"><B>TRANSALTA COGENERATION L.P., by its general partner, TRANSALTA COGENERATION LTD.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">Per:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">&ldquo;<I>John Kousinioris</I>&rdquo; </FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">Per:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">&ldquo;<I>John Kousinioris</I>&rdquo;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">Signature</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">&nbsp;</P></TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">Signature</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">John Kousinioris</FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">John Kousinioris </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">Name</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">&nbsp;</P></TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">Name</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">Chief Legal and Compliance Officer and Corporate Secretary </FONT></TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">Director</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">Title</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">&nbsp;</P></TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">Title</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">&nbsp;</P></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%"><B>KEEPHILLS 3 L.P.</B>,<B> by its general partner, TRANSALTA CORPORATION</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">Per:</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">&ldquo;<I>Brett Gellner</I>&rdquo;</FONT></TD>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">Signature</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">&nbsp;</P></TD>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">Brett Gellner </FONT></TD>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">Name</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">&nbsp;</P></TD>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal"><FONT STYLE="font-size: 10pt; line-height: 115%">Chief Investment Officer</FONT></TD>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">Title</P>
        <P STYLE="font: 10pt/115% Arial, Helvetica, Sans-Serif; margin: 3pt 0 0">&nbsp;</P></TD>
    <TD STYLE="vertical-align: top; padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; line-height: normal">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="line-height: 115%">&nbsp;</TD></TR>
</TABLE>

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<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: center"><B>Schedule A: TransAlta</B></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">Net book value provided by company:</P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"><B>$<FONT STYLE="background-color: black">XXXXXXXXXXXXXXXXXXXX</FONT>
</B></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"><I>*Note, Sheerness 1 and 2 have been doubled to represent
50% ownership by TransAlta cogen.</I></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">Pro-rated by percentage of life remaining after 2030
to give proxy for 2030 NBV: divided by remaining years under federal end-of-life as of November 2016, then multiplied by years
stranded:</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><B>$<FONT STYLE="background-color: black">XXXXXXXXXXXXXXXXXXX</FONT><BR>
<BR>
</B></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">Deducted by 10% for sub-critical units and 20% for
super-critical units:</P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"><B>$<FONT STYLE="background-color: black">XXXXXXXXXXXXXXXXXX</FONT>
</B></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"><B>Unit-by-unit breakdown: </B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%; border: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif"><B>Unit </B></FONT></TD>
    <TD STYLE="width: 25%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><B>Federal end-of-life</B></P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P></TD>
    <TD STYLE="width: 25%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif"><B>Pro rata factor</B></FONT></TD>
    <TD STYLE="width: 25%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif"><B>Flat deduction (10%/20%)</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">Sheerness 1 (50%)</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif">2036</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif">30%</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">$ <FONT STYLE="background-color: black">XXXXXXXXXXXX</FONT></P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">Sheerness 2 (50%)</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: right"><B>&nbsp;</B></P></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif">2040</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif">42%</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">$ <FONT STYLE="background-color: black">XXXXXXXXXXXX</FONT></P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">Genesee 3 (50%)</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif">2055</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif">64%</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">$ <FONT STYLE="background-color: black">XXXXXXXXXXXX</FONT></P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">Keephills 3 (50%)</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif">2061</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif">69%</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">$ <FONT STYLE="background-color: black">XXXXXXXXXXXX</FONT></P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt"><FONT STYLE="font: 11pt Calibri, Helvetica, Sans-Serif"><B>Total</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-size: 11pt">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><B>$ </B><FONT STYLE="background-color: black">XXXXXXXXXXXX</FONT></P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">Discount 2030 NBV back to net present value (NPV) at
3% in 2016:</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><FONT STYLE="background-color: black"><B>XXXXXXXXXXXXXXX</B></FONT><B>
</B></P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">Annuity payment (over 14 years):</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><B>$39,851,704.60</B></P>

<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</p>

<p style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</P>


</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>mcr.htm
<DESCRIPTION>MATERIAL CHANGE REPORT DATED DECEMBER 2, 2016
<TEXT>
<html>

<head>

<title>JA Filed by Filing Services Canada Inc. 403-717-3898</title>
</head>

<body>

<P STYLE="font: 11pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: center">&nbsp;</P>

<P STYLE="font: 11pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: center"><B>Exhibit 99.1&nbsp;</B></P>

<P STYLE="font: 11pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: center"><B>Form 51-102F3</B></P>

<P STYLE="font: 11pt/115% Arial, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: center"><B>MATERIAL CHANGE REPORT</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Item 1</B></FONT></TD>
    <TD STYLE="width: 85%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Name and Address of Company</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">TransAlta Corporation (&ldquo;TransAlta&rdquo; or the &ldquo;Company&rdquo;)</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">110 &ndash; 12<SUP>th</SUP> Avenue SW</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">Calgary, Alberta T2P 2M1</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Item 2</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Date of Material Change</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">November 24, 2016</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Item 3</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>News Release</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">News release disseminated via Marketwire on November 24, 2016.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Item 4</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Summary of Material Change</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">On November 24, 2016, the Company entered
        into an agreement (the &ldquo;Off-Coal Agreement&rdquo;) with the Government of Alberta (the &ldquo;Government&rdquo;) on transition
        payments for the cessation of coal-fired emissions from the Keephills 3, Genesee 3 and Sheerness coal-fired plants on or before
        December 31, 2030. Additionally, TransAlta reached an understanding with the Government pursuant to a Memorandum of Understanding
        (the &ldquo;MOU&rdquo;) to collaborate and cooperate in the development of a policy framework to facilitate the conversion of coal-fired
        generation to gas-fired generation, facilitate existing and new renewable electricity development through supportive and enabling
        policy, and ensure existing generation and new electricity generation are able to effectively participate in the recently announced
        capacity market to be developed for the Province of Alberta.</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD></TR>
</TABLE>

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<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse"><TR STYLE="vertical-align: top"><TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Item 5.1</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Full Description of Material Change</b></font></td></tr>
<tr style="vertical-align: top">
<td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</td>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 85%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">On November 24, 2016, TransAlta entered
        into the Off-Coal Agreement with the Government on transition payments for the cessation of coal-fired emissions from the Keephills
        3, Genesee 3 and Sheerness coal-fired plants on or before December 31, 2030. Additionally, TransAlta announced that it has reached
        an understanding with the Government pursuant to the MOU to collaborate and cooperate in the development of a policy framework
        to facilitate the conversion of coal-fired generation to gas-fired generation, facilitate existing and new renewable electricity
        development through supportive and enabling policy, and ensure existing generation and new electricity generation are able to effectively
        participate in the recently announced capacity market to be developed for the Province of Alberta.</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The successful development of a future
        policy framework will set a clear path for the investments that TransAlta will make in its existing coal, hydro and wind fleets
        and will allow the Company to make additional investments in gas conversions, hydro and wind development in the province. TransAlta
        is committed to converting Sundance Units 3 to 6 and the Keephills 1 and 2 to gas-fired generation on or before 2023. TransAlta
        has also commenced the development of a pumped hydro project at its existing Brazeau facility and expects to begin stakeholder
        consultations in the near future. The Company is targeting 2021 for the commencement of construction of the project, subject to
        receiving a long-term contract.</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">Under the terms of the Off-Coal Agreement,
        TransAlta will receive annual cash payments of approximately $37.4 million, net to TransAlta, commencing in 2017 and terminating
        in 2030. Receipt of the payments is subject to a number of terms and conditions, including that TransAlta maintains prescribed
        spending on investment and investment related activities in Alberta, maintains a significant business presence in Alberta (including
        through the maintenance of prescribed employment levels), maintains spending on programs and initiatives to support the communities
        surrounding the plants and the employees of the Company negatively impacted by the phase-out of coal generation and that the Company
        fulfills all obligations to affected employees. The Off-Coal Agreement requires TransAlta to cease all coal-fired emissions at
        the affected plants on or before December 31, 2030. The affected plants are not, however, precluded from generating electricity
        at any time by any method other than the combustion of coal.</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">On November 24, 2016, TransAlta also
        entered into the MOU with the Government pursuant to which the Government committed to cooperate and work collaboratively to advance
        the objectives of the Alberta Climate Leadership Plan. Specifically, the parties undertook to, among other things:</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </FONT><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><I>Coal-to-Gas Conversions </I>&ndash; collaborate on the development
        of a policy environment to facilitate the economic and environmentally responsible conversion of some coal-fired generation to
        natural gas-fired generation in Alberta, including securing regulatory cooperation from the Government of Canada so as to enable
        the conversion of coal-fired generation to gas-fired generation; </FONT></P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 0.5in; text-align: justify">&nbsp;</P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </FONT><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><I>Support for Renewable Electricity </I>&ndash; collaborate to facilitate
        both existing and new renewable electricity development through supportive and enabling policy, including policy that addresses
        the value of the carbon reductions in the generation of electricity from existing wind and hydro generation, the development of
        effective supporting mechanisms to ensure that existing renewables generation is not adversely impacted by the implementation of
        a capacity market in Alberta, and the development of regulatory clarity and alignment so as to permit the economic and timely development
        of hydro-electric projects within Alberta (including through the establishment of contractual assurances in the form of capacity
        payments); and </FONT></P>
        <P STYLE="font: 11pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 0.5in"><I>&nbsp;</I></P>
        <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font: 11pt Symbol">&#183;</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </FONT><FONT STYLE="font: 11pt Arial, Helvetica, Sans-Serif"><I>Opportunity Under a Capacity Market </I>&ndash; work to ensure
        existing incumbents and new electricity generation are able to effectively participate in capacity payment auctions to be established
        as part of the development of a capacity market. </FONT></P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">The MOU does not create any legally binding
        obligations between the Government and TransAlta and does not impose any obligations on, or constrain the discretion and authority
        of, the Government.</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</p>
        <p style="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 10.5pt inherit,serif; margin: 0; color: #002C40"><B>&nbsp;</B></p>

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<p style="font: 10.5pt inherit,serif; margin: 0; color: #002C40"></P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</p>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; width: 15%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Item 5.2</B></FONT></TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; width: 85%">
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0"><B>Disclosure for Restructuring Transactions</B></P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">Not applicable.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Item 6</B></FONT></TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Reliance on Section 7.1(2) of National Instrument 51-102</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">Not applicable.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Item 7</B></FONT></TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Omitted Information</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">Not applicable.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Item 8</B></FONT></TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Executive Officer</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">The name and business number of the executive officer who
        is knowledgeable about the material change and this report is:</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">John Kousinioris</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">Chief Legal and Compliance Officer and Corporate Secretary</P>
        <P STYLE="font: 11pt/normal Arial, Helvetica, Sans-Serif; margin: 0">Telephone: (403) 267-3641</P></TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Item 9</B></FONT></TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif"><B>Date of Report</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%">&nbsp;</TD>
    <td style="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">December 2, 2016</FONT></TD></TR>
</table>

<p style="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</p>

<p style="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0"></p>

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<p style="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</p>

<p style="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0"><B><I>Forward-Looking Statements</I></B></P>

<P STYLE="font: 9pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: justify"><font style="font-family: Arial, Helvetica, Sans-Serif"><i>This
material change report contains forward-looking statements and forward-looking information within the meaning of applicable
securities laws. The use of any of the words &quot;expect&quot;, &quot;anticipate&quot;, &quot;continue&quot;,
&quot;estimate&quot;, &quot;may&quot;, &quot;will&quot;, &quot;project&quot;, &quot;should&quot;, &quot;believe&quot;,
&quot;plans&quot;, &quot;intends&quot; and similar expressions are intended to identify forward-looking information or
statements. More particularly, and without limitation, this news release contains forward-looking statements and information
relating to: the development of a policy framework by Alberta to (i) facilitate the conversion of coal-fired generation to
gas-fired generation, (ii) facilitate existing and new renewable electricity development through supportive and enabling
policy, and (iii) ensure existing generation and new electricity generation are able to effectively participate in the
recently announced capacity market; the transition payments for the cessation of coal-fired emissions from the Keephills 3,
Genesee 3 and Sheerness coal-fired plants on or before December 31, 2030, including the amount and timing of such payments;
the ability of the Company to make additional investments in gas conversions, hydro and wind development in the Province of
Alberta; the conversion of Sundance Units 3 to 6 and the Keephills 1 and 2 to gas-fired generation on or before 2023 and
the timing of construction and</i></font><font style="font-family: Times New Roman, Times, Serif"> </font><font style="font-family: Arial, Helvetica, Sans-Serif"><i>the
ability of the Company to receive a long-term contract associated with such conversions; and the Company&rsquo;s continued
ability to supply competitive capacity and energy to the Alberta market. By their nature, forward-looking information
requires us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that
predictions and other forward-looking information will not prove to be accurate and readers are cautioned not to place undue
reliance on our forward-looking information as a number of factors could cause actual future results, conditions, actions or
events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking
information. Some of the factors that could cause such differences include: operational risks involving our facilities;
changes in market prices where we operate; the ability of the Company to satisfy the conditions to the transition payments;
equipment failure and our ability to carry out repairs in a cost effective and timely manner,
including unplanned outages at generating facilities and associated capital investments; the effects of weather; failure to obtain
necessary regulatory approvals in a timely fashion; legislative or regulatory developments and their impacts, including as it pertains
to the Government of Alberta&rsquo;s implementation of the Climate Leadership Plan; increasingly stringent environmental requirements
and their impacts; increased competition; global capital markets activity (including our ability to access financing at a reasonable
cost); changes in prevailing interest rates; currency exchange rates and inflation levels and commodity prices. Readers are cautioned
not to place undue reliance on these forward-looking statements, which reflect TransAlta&rsquo;s expectations only as of the date
of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether
as a result of new information, future events or otherwise, except as required by law.</i></font></P>


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