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TransAlta Corp. will fast-track its transition to cleaner power — with forecasts of handsome government rewards for its renewables portfolio — and plans to mothball some coal plants in the near term, which is expected to boost low electricity prices.

The Calgary-based power producer signed a letter of intent with Tidewater Midstream and Infrastructure Ltd., which has agreed to build a $150-million natural gas pipeline from its processing facility in central Alberta to TransAlta power plants.

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The 120-kilometre pipeline — with initial capacity of 130 million cubic feet of gas per day and the potential for expansion — will supply some of the fuel TransAlta will need to produce power at its Sundance and Keephills facilities after it converts the coal-fired plants to natural gas generation.

The company is hunting for more pipeline projects to meet its needs for gas.

After securing the pipeline deal and receiving clarity on federal rules, TransAlta plans to convert six of its coal-fired generating units to natural gas by 2022, a year earlier than planned.