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45th Annual EEI Financial Conference

November 2, 2010

Brett GellnerChief Financial Officer

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This presentation may contain forward-looking statements, including statements regarding the business and anticipated financial performance of TransAlta Corporation. All forward-looking statements are based on our beliefs and assumptions based on information available at the time the assumption was made. These statements are not guarantees of our future performance and are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include cost of fuels to produce electricity, legislative or regulatory developments, competition, global capital markets activity, changes in prevailing interest rates, currency exchange rates, inflation levels, unanticipated accounting or audit issues with respect to our financial statements or our internal control over financial reporting, plant availability, and general economic conditions in geographic areas where TransAlta Corporation operates. Given these uncertainties, the reader should not place undue reliance on this forward-looking information, which is given as of this date. The material assumptions in making these forward-looking statements are disclosed in our 2009 Annual Report to shareholders and other disclosure documents filed with securities regulators.

Unless otherwise specified, all dollar amounts are expressed in Canadian dollars.

Forward looking statements

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OutlineAbout UsValue Proposition & StrategyMarkets, Contracting, and GrowthFinancial Strength & Capital AllocationSummary

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AUSTRALIA

UNITED STATES

CANADA

18 MWHydro under development286 MW

Generation Facilities:

Coal-fired under construction

Coal-fired plants

Gas-fired plants

Hydro plants

Wind-powered plants

Wind under construction

Geothermal

4,688 MW

1,843 MW

893 MW

950 MW

123 MW

164 MW

Biomass 25 MW

Net generation in operation 8,563 MW

Our assets and portfolio

54%

Coal48%

Renewables29%>50% EBITDA from low

carbon generation and growing; should lead to multiple expansion Gas

23%

2010eEBITDA

Diverse portfolio; strategically focused in Western Canada and U.S.; renewable focus across Canada

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TransAlta value proposition & strategy

Canada’s largest publically traded wholesale power

generator & marketer

Value

Maintaining a strong dividend

Investing in 10% after-tax IRR projects

Maximizing value of sustaining capital

Strategy

Maintaining investment grade credit ratios

Generating significant cash flow

Diversity of regions, fuels, contracts and age of assets

Environmental leadership

Developing and acquiring low carbon growth

opportunitiesOptimizing operations

Low to moderate risk profile

Yield, upside potential, and steady disciplined growth

Financial strength

Disciplined investment decisions

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Drive the baseEnhancing unit margins by improving plant performance on a sustained basis, driving productivity to lower costs, and optimizing contracts

Green our portfolioMaintaining a strong portfolio of low carbon greenfield opportunities but shifting focus to acquisitions

Reposition coalPursuing technologies that reduce the carbon intensity of coal

Executing on our strategic priorities will drive near and long-term value

Focused and disciplined strategic priorities

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Portfolio optimization

Asset by asset focus for enhancing returns; renegotiated contract at Sarnia with the Ontario Power Authority (OPA)

Operational stability

Coal life-cycle optimized on a unit by unit basis to deliver operational stability and avoid potential of stranded capital

Targeting 89 - 90% fleet availabilityYTD availability of 88.1% vs. 84.4%

Productivity investments used to offset inflationary pressures and improve performance

OM&A $44 million lower in YTD vs. 2009

Organization, maintenance plans and spend aligned to low pricing environment

Increased productivity &cost reductions

Drive the base

Enhancing returns and delivering shareholder value

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0500

1,0001,5002,0002,500

2000 2005 2010 2011eHydro Wind Geothermal Biomass

Hydro

Wind

134 MW

399 MW

Geothermal 87 MW

Net Capacity 620 MW

11 Facilities Under Advanced Development:

Total Capital Spend: $2.0B – $2.4B

6 Facilities Under Construction:

Wind

Hydro

Coal

Net Capacity

123 MW

18 MW

286 MW

427 MW

Total Capital Spend: $1.4B

Strategy focus:

WindGeothermalHydro upgrades: Run of riverNatural gas combined-cycleGreen coal – Project Pioneer

Green our portfolio: Growth strategy

Maintain investment focus on low carbon growth opportunities andfocus on multiple options for long-term sustainability

Renewable portfolio growthMW

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TransAlta’s growth investments deliver long-term sustainable cash flow and earnings growth

Tracking

Merchant

Unit 1 - Q4 2011

Unit 2 - Q4 2012

15%+

$68 MM

46 MW

(23 MW each)

Efficiency Uprates

Alberta

Keephills 1 and 2

Uprates

Tracking

Merchant

Q4 2012

15%+

$27 MM

15 MW

Efficiency Uprate

Alberta

Sundance 3 Uprate

10%+10%+10%+10%+Unlevered after tax IRR

AlbertaBritish Columbia

AlbertaNew BrunswickLocation

Tracking

Merchant

Q2 2011(3)

$988 MM (3)

225 MW (1)

Supercritical Coal

Keephills 3

Tracking

LTC

Q1 2011

$48 MM (2)

18 MW

Hydro

Bone Creek

Ahead of schedule

LTC/Merchant

Q4 2010

$135 MM

69 MW

Wind

Ardenville

Tracking

LTC

Q4 2010

$100 MM

54 MW

Wind

Kent Hills 2

On time / On budget

Contract Status

Commercial Operations Date

Total Project Cost

Size

Type

Projects

(1) 450 MW gross size(2) Bone Creek’s capital spend prior to the acquisition was $23 MM which does not form part of our total project cost(3) Keephills 3 capital spend increased from $888 MM to $988 MM and its COD was revised from Q1 2011 to Q2 2011

Executing on our growth

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Repositioning coal - Alberta

Federal government mandating the phased end of coal-fired electricity generation in CanadaCoal-fired facilities to close at the latter of 45 years of age or PPA expiryOpportunities to replace coal with a mix of natural gas and clean coal technology

Strong competitive advantages in Alberta to navigate federal governments mandate to phase-out coal

Competitive advantages:

AB coal sites are ideal for development of large scale natural gas-fired generation and future clean coal

• Existing infrastructure; gas lines and quality water supply• Access to transmission capacity• Centrally located

20+ experience in building natural-gas facilitiesProject Pioneer - leading the world in carbon capture and storage (CCS)CCS supported by federal and provincial governments

Alberta coalfacilities

Alberta

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Over 50% of installed base in Alberta is coal; vast economic coal reservesCoal to play a longer-term role in Alberta with application of new technologySequestration capability provides potential to apply CCS on existing coal facilities

Advancing Canada’s first large-scale project to retrofit a power plant to capture and store 1M tonnes of CO2 by 2015

Repositioning coal - Alberta

Project PioneerLargest scale pilot in North AmericaAwarded over $770M of government fundingPotential to remove 90% of CO2 from emission streamPartners include: Governments of Canada and Alberta; Alstom, Capital Power, and EnbridgeFEED study to be completed by the end of 2010

Carbon Capture and Storage

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Demonstrating environmental leadership

Repositioning coal - Washington

Memorandum of Understanding signed with the state of Washington to negotiate an agreement on a transition plan for Centralia with the primary objective to reduce Centralia’s GHG emissions

Committed to maintaining power generation grid stability and protecting local jobs and investments in Washington state

Agreement to be cost of service with fixed and secure returns

Transition expected to commence in 2012; replacement capacity to include natural gas-fired generation and renewables

April 2010 2012 2025

MoU signed with state of Washington

Start transition based on defined schedule

Centralia fully transitioned to cleaner fuel sources

Transition planning underway Transition underway

Transition Timeline

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Markets & Contracting

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$30

$40

$50

$60

$70

$80

$90

$100

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Market outlook: Alberta

(CAD$/MWh)

Figures as of Oct. 14, 2010

Reserve margins

Expect demand to grow at ~2.5% per year for the next three years

Power prices

Forward market driven off of soft natural gas pricesNatural gas prices likely to remain low out to 2011+ $1/GJ = ~ $8 - 10 / MWh

Actuals Current Market

0%

5%

10%

15%

20%

25%

2007 2008 2009 2010 2011 2012 2013 2014

Actual Forecast

1% load growth

2% load growth

3% load growth

Forward prices are soft due to low natural gas prices and capacity additions; long-term fundamentals remain strong, driven by oil sands recovery

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$0

$10

$20

$30

$40

$50

$60

$70

2006 2007 2008 2009 2010 2011 2012 2013 2014

Market outlook: PacNW

Improvements in demand; forward pricing continues to track natural gas prices

(USD$/MWh)

Forward prices track natural gas movements+ $1 / MMBtu = ~ $7 - 9 / MWh

Reserve margins Power prices

Expect demand to grow at ~1.5% per year for the next three years

Actuals Current Market

Figures as of Oct. 14, 2010

20%

30%

40%

50%

60%

2007 2008 2009 2010 2011 2012 2013 2014

Reserve Margins*

Actual Forecast

1% load growth

3% load growth2% load growth

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Alberta PPAs and long-term contracts provide solid base for stable earnings and support TransAlta’s low to moderate risk business strategy

Approx. target contracting level of 90%

Merchant contracting strategy targets 25% / yr

PPAs, long and medium-term contracts:

~70% of generation in 2010

Average contract life ~12 years

PPAs, long & medium-term contracts

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2010 2011 2012 2013

Contracted Open

Total MWs

94% contracted for 2010, leverage to power price recovery in key markets

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0

500

1,000

1,500

2,000

2,500

3,000

3,500

2010 2011 2012 2013

Contracted To be contracted Open

\

Merchant MWs

Approx. levels only

Merchant MWs

Merchant hedging strategy designed to minimize impacts of adverse market conditions while allowing for upside potential

Approximate target level - 90%

AB: $65 - $70PACNW: $55 - $60

~81%2012

AB: $65- $70PACNW: $55 - $60

~88%2011

AB: $60 - $65PACNW: $50 - $55

~94%2010

Merchant Portfolio Contracted Price (As of Oct. 2010)

Total Portfolio % ContractedYear

Capacity adjustments

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Capital Allocation Plan

Dividend

Provide shareholders sustainable dividend

growth

Share Buyback

Provide shareholders incremental return of

capital in absence of value-creating investment

opportunities

Growth Investment

Projects must deliver unlevered, free cash, after

tax IRR >10%

Portfolio Optimization

Divest or improve non-core and underperforming

assets

We remain disciplined in how we manage our balance sheet and allocate capital

Capital plan and funding

Sources & Uses of Capital 2010 – 2012

NCI$200M

Dividends$750M

Announced growth capex

$500M

Sustaining capex$1B

Available$550M

Cash flow from operations:~$3B

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$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

Credit Lines Utilized Credit Lines Available

35%

40%

45%

50%

55%

60%

2006 2007 2008 2009 Q32010

0%5%

10%15%20%25%30%35%

2006 2007 2008 2009 Q32010

012345678

2006 2007 2008 2009 Q32010

Execute our plan while maintaining long-term financial strength and stability

Range:4 - 5x

Cash flow to interest

Maintain financial strength

Range:55 - 60%

Debt to capital

Range:20 - 25%

Cash flow to debt

Committed credit lines

Sept. 30, 2009 Sept. 30, 2010

$B

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Disciplined and consistent value proposition and strategy

Strong yield supported by significant free cash flow both near-term and long-term

Well positioned to capitalize on market recovery through operational excellence; stronger availability, lower costs, and disciplined contracting

Diversified fuels and geographies provide strong competitive advantages and a broader platform for future growth

Deep pipeline of organic growth opportunities maintained while shifting focus to acquisitions

Financial strength and flexibility

Summary

Well positioned to deliver strong results throughout market cycles

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Appendix

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Performance goals

Annual Metrics

4.6X

21.2%

56.7%

Annual Metric

$230 MM

$0.17

$7.51/MWh

Annual Metric

91.0%

Q3 2010

Annual Metrics

5.8X

23.6%

50.1%

Annual Metric

$194 MM

$0.34

$7.78/MWh

Annual Metric

83.9%

Q3 2009

Decreased due to low pricing in core markets, lower Energy Trading gross margins, slightly higher OM&A costs in the quarter

>10%/yrComparable EPS Grow Earnings and Cash Flow

TBD$295 - $340Sustaining CapexMake Sustaining Capex Predictable

Maintained strong balance sheet, financial ratios and ample liquidity

4 - 5X

20 - 25%

55 - 60%

Cash Flow to InterestCash Flow to DebtDebt to Invested Capital

Maintain InvestmentGrade Ratings

TBD

>10%/yr>10%/yr>10%/yr

Comparable ROCETSRIRR

Deliver Long-termShareowner Value

Higher operating cash flow due to favorable changes in working capital

Decreased year-over-year due to less major maintenance activities in 2010 and increased capacity

TBD

Increased availability due to lower planned and unplanned outages at our Sundance plant, lower planned outages at our Mississauga and Windsor facilities, and lower unplanned outages at Centralia

2010 Goals

$850 – 950* MMOperating Cash Flow

90%AvailabilityAchieve top decile operations

1.0 by 2015Injury Frequency RateImprove Safety

Offset InflationOM&A/installed MWhEnhanceProductivity

Measures ReviewFinancial ratios

*Estimate revised to $800 - $900 million

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$(196)$74$12$107Free cash flow (deficiency)

$1.69$2.28$0.98$1.05Cash flow from operating activities per share

$595$664$241$233EBITDA

$463$558$178$184Funds from operations

12,742

91.0

$0.29

$230

$0.17

$0.17

$38

$38

$98

$380

$700

Q3 2010

11,610

83.9

$0.29

$194

$0.34

$0.34

$66

$66

$120

$380

$666

Q3 2009

33,439

84.4

$0.87

$334

$0.52

$0.49

$102

$97

$219

$1,107

$2,007

YTD2009

35,857

88.1

$0.87

$502

$0.71

$0.57

$156

$126

$287

$1,137

$2,008

YTD2010

Availability (%)

Comparable earnings per share

Basic and diluted earnings per share

Comparable earnings

Operating income

Production (GWh)

Cash dividends declared per share

Cash flow from operating activities

Net earnings

Gross margin

Revenue

Results ($M)

Q3 2010 - Highlights

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(6)---Settlement of commercial issue, net of tax

$0.34

198

$66

-

-

$66

Q3 2009

$0.17

220

$38

-

-

$38

Q3 2010

1-Change in life of Centralia parts, net of tax

$0.49

198

$97

-

$102

YTD2009

220Weighted average common shares outstanding in the period

$0.57

$126

(30)

$156

YTD2010

Earnings on a comparable basis

Earnings on a comparable basis per share

Income tax recovery related to the resolution of certain outstanding tax matters

Net earnings

Results ($M)

Comparable earnings

Q3 2010

25

Net earnings

$38

(2)

12

(5)

(13)

(15)

(5)

(4)

4

$66Q3 2010

$156Net earnings, 2010

(12)Other

15Decrease in income tax expense / increase in income tax recovery

7(Increase) decrease in non-controlling interest

(28)

(2)

44

(20)

50

$102YTD 2010

Decrease in Energy Trading gross margins

(Increase) decrease in OM&A costs

Increase in depreciation expense

Increase in net interest expense

Increase in Generation gross margins

Net earnings, 2009

Q3 2010

26

$12

-

(1)

(7)

(58)

(116)

$194

Q32009

$74

-

(13)

(44)

(169)

(202)

$502

YTD2010

$(196)

(8)

(19)

(40)

(169)

(294)

$334

YTD2009

$107Free cash flow (deficiency)

-Other income

-Non-recourse debt repayments

(15)Distribution to subsidiaries’ non-controlling interests

(49)Cash dividends paid on common shares

(59)Sustaining capital expenditures

Add (Deduct):

$230Cash flow from operating activities

Q32010

($M)

Free cash flow

27

$0

$200

$400

$600

$800

$1,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 Thereafter

CDN MTN US Notes

1

Minimal debt refinancing over the short-term provides ample financial flexibility

(CDN $M)

Based on June 30, 2010 FX rate of $1.0529 CAD/US

Debt profile supports balance sheet

1 1

11

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TBD

2011e*

$125 - 140Major Maintenance

$20 - 25Mine

$10 - 15Productivity capital

TBD

2012e*

$120 - 140

$275 - 320

2010e

Routine capital

Sustaining

($M)

Sustaining capex slightly reduced due to changes in natural gas plant major maintenance schedule

2010 Sustaining capital

*Estimates will be provided at TransAlta’s 2010 Investor Day.

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160 – 170*

$55 - 70

$0 - 5*

$55 - 65

Natural Gas and

Renewables

2,465 – 2,475

$135 - 145

$65 - 70

$70 - 75

Coal

2,625 - 2,645GWh lost

$190 - 215Total$65 - 75Expensed

$125 - 140

Total

Capitalized

($M)

2010 Major maintenance plan

* Natural gas fleet only

Major maintenance

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All projects tracking on time and on budget

$1183$10 - 15$8166Summerview 2

$ 772---$6053Sun 5 uprate

185

66

MW

$308$10 - 15$228 Total

$1131---$87Blue Trail

2012e Total2010e 2011e2009Completed

$68$20 - 30$25 - 35$5 - 15$246KI & K2 uprates

$27$10 - 20$10 - 15$0 - 5-15Sun 3 uprate

427

69

225

18

54

MW

$100$80 - 85$18Kent Hills 2

$484$50 - 55$4Bone Creek

$9885$20 - 30$225 - 245$231Keephills 3

$135 $105 - 115$27Ardenville

$30 - 50

2012e

$1.4B

Total

$465 - 520

2010e

$55 - 80

2011e

$282

2009

Total

In Progress

Growth capital

1. Blue Trail capital spend prior to 2009 was $26M2. Sun 5 uprate capital spend prior to 2009 was $17M3. Summerview II capital spend prior to 2008 was $25M4. Bone Creek capital spend prior to the acquisition was $23M which does not form part of our total project cost; total project cost includes

associated recoveries5. Keephills 3 capital spend prior to 2009 was $476M

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Advanced development

Over 600 MW of renewable energy in advanced development for TransAlta’s 2010 - 2013 pipeline

* TransAlta’s ownership** Based on initial estimates of Canadian Hydro

LOCATION PROJECT CAPACITY FUEL TYPE RESOURCE & TURBINE CAPEX RANGE PPA / MW SITE CONTROL Applied Secured SECURED $ MM LTC

Saskatchewan ANEDC 175 Wind TBD $420 - $470 PPA/LTCNew Brunswick NB - 1 54 Wind $100 - $155 PPA/LTCNew Brunswick NB - 2 54 Wind $100 - $155 PPA/LTCCalifornia Black Rock 1-3 87* Geothermal In Progress $450 - $500 PPA/LTCAlberta Dunvegan** 100 Hydro $500-$600 MerchantBritish Columbia Clemina Creek** 11 Hydro $30-$40 PPA/LTCBritish Columbia Serpentine Creek** 10 Hydro $30-$40 PPA/LTCBritish Columbia English Creek** 5 Hydro $10-$20 PPA/LTCOntario Yellow Falls** 8* Hydro $30-$40 PPA/LTCQuebec New Richmond** 66 Wind $180-$200 PPA/LTCQuebec St. Valentin** 50 Wind $150-$170 PPA/LTC

TOTAL MW : 620 TOTAL COST: $2.0 B - $2.4 B

2012

TBD

TBD

TBD

TBD

2010/11

2012

Projects in Advanced DevelopmentTARGET

COMMERCIALOPERATION DATE

2012

ENVIRONMENTAL AND PERMITS

2013/14

20122010/11