Decommissioning and Other Provisions (Notes)

12 Months Ended

Dec. 31, 2019

Other Provisions, Contingent Liabilities And Contingent Assets [Abstract]

The change in decommissioning and other provision balances is as follows:


	Decommissioning and restoration	Other	Total
Balance, Dec. 31, 2017	437	33	470
Liabilities incurred	5	17	22
Liabilities settled	(31)	(10)	(41)

Accretion	24	—	24
Acquisition of liabilities (Big Level)	—	8	8
Revisions in estimated cash flows	2	3	5
Revisions in discount rates	(37)	—	(37)
Reversals	—	(5)	(5)
Change in foreign exchange rates	7	3	10
Balance, Dec. 31, 2018	407	49	456
IFRS 16 transition adjustment	—	(2)	(2)
Liabilities incurred	7	7	14
Liabilities settled	(34)	(9)	(43)

Accretion	23	—	23
Acquisition of liabilities	16	3	19
Disposition of liabilities	(23)	(9)	(32)
Revisions in estimated cash flows⁽¹⁾	96	7	103
Revisions in discount rates	16	—	16
Reversals	—	(1)	(1)
Change in foreign exchange rates	(7)	—	(7)
Balance, Dec. 31, 2019	501	45	546

(1) During 2019, the Corporation adjusted the Centralia mine decommissioning and restoration provision as management no longer believes that the fine coal recovery and reclamation work will occur as originally proposed. Refer to Note 3(A)(III) for further details. In addition, due to the changes in estimated useful lives, described in Note 3(A)(IV), the discount rates used for the Canadian coal and mining operations decommissioning provisions were changed. The use of a lower inflation rate decreased the corresponding liabilities.


	Decommissioning and restoration	Other	Total
Balance, Dec. 31, 2018	407	49	456
Current portion	35	35	70
Non-current portion	372	14	386
Balance, Dec. 31, 2019	501	45	546
Current portion	36	22	58
Non-current portion	465	23	488

A. Decommissioning and Restoration

A provision has been recognized for all generating facilities and mines for which TransAlta is legally, or constructively, required to remove the facilities at the end of their useful lives and restore the sites to their original condition. TransAlta estimates that the undiscounted amount of cash flow required to settle these obligations is approximately $1.3 billion, which will be incurred between 2020 and 2073. The majority of the costs will be incurred between 2020 and 2050. At Dec. 31, 2019, the Corporation had provided a surety bond in the amount of US$147 million (2018 – US$139 million) in support of future decommissioning obligations at the Centralia coal mine. At Dec. 31, 2019, the Corporation had provided letters of credit in the amount of $128 million (2018 – $122 million) in support of future decommissioning obligations at the Alberta mine.

B. Other Provisions

Other provisions also include provisions arising from ongoing business activities and include amounts related to commercial disputes between the Corporation and customers or suppliers. Information about the expected timing of settlement and uncertainties that could impact the amount or timing of settlement has not been provided as this may impact the Corporation’s ability to settle the provisions in the most favourable manner.