TransAlta Sells Interest in Meridian Power Plant.

CALGARY, Alberta -- TransAlta Corporation (NYSE:TAC) (TSX:TA) today announced its intention to sell its 50 per cent interest in the 220-megawatt gas-fired Meridian Cogeneration Facility located in Lloydminster, Saskatchewan for $110.0 million, to TransAlta Cogeneration, L.P. (TA Cogen). TA Cogen is a partnership owned 50.01 per cent by TransAlta and 49.99 per cent by TransAlta Power, L.P. (TransAlta Power).

"The sale of Meridian continues our drive to maintain our strong balance sheet and provide the company with increased financial flexibility," said Steve Snyder, president and CEO.

TA Cogen will finance the acquisition through the use of approximately $50.0 million of cash on hand and the issuance of approximately $30.0 million of units to each of TransAlta Corporation and TransAlta Power.

TransAlta expects to record a gain of approximately $10.0 million after-tax or $0.05 per common share. TransAlta will use the $55.0 million proceeds to repay short-term debt.

The transaction is expected to close on Dec. 1, 2004.

All currency is expressed in Canadian dollars except where noted.

TransAlta is among Canada's largest non-regulated power generation and wholesale marketing companies. We have coal-fired, gas-fired, hydro and renewable generation assets in Canada, the U.S., Mexico and Australia. With approximately 10,000 megawatts of capacity either in operation, under construction or in development, our focus is to efficiently operate our assets in order to provide our wholesale customers with a reliable, low-cost source of power.