CALGARY - TransAlta Corp. and a U.S. company are partnering up to build new natural gas-fired power plants that will help meet burgeoning electricity demand driven by growing energy development in western Canada.

The Calgary-based power generator announced the agreement Friday with Iowa-based MidAmerican Energy Holdings Co., a subsidiary of billionaire Warren Buffett's company, Berkshire Hathaway.

"It's a unique opportunity for TransAlta to be much more aggressive about the size and number of plants that we could develop. We like MidAmerican's disciplined approach to development and, more importantly, we share a common view on returns," TransAlta CEO Dawn Farrell told analysts on a conference call to discuss the company's third-quarter results.

"We believe the partnership will bring significant benefits to both MidAmerican and TransAlta shareholders."

Farrell said Canada will need more than $200 billion in new power generation investment over the next two decades.

"If you look at Canada, there's a huge potential for expansion of (liquefied natural gas), which potentially will need power. There's lots of opportunities here in Alberta in the oilsands as the oilsands guys build up their plans over the next 10 to 15 years. There's opportunities in Saskatchewan," she said.

"And many of those projects are fairly big projects with fairly big price tags, so I think as we look at Canada and its expansion over the next 10 years and the kind of generation that's required, that offers some pretty big opportunities."

TransAlta and MidAmerican have a relationship dating back more than decade, including investments in geothermal generation in California and several U.S. gas-generating assets. The deal announced Friday is MidAmerican's first foray into the Canadian market.

"At MidAmerican, we have been seeking an entry point to the Canadian electricity generation market, where we see strong potential for growth," said MidAmerican CEO Greg Abel in a release.

The agreement encompasses all new natural gas-fuelled generation opportunities considered by either TransAlta or MidAmerican in Canada, including TransAlta's proposed Sundance 7 project, an up to 800-megawatt project based in Alberta.

All development and construction or acquisition of approved projects will be funded on a 50-50 basis and TransAlta will be responsible for construction management, operation and maintenance of projects that proceed.

Farrell said it's too soon to know just how big the partnership with MidAmerican may become.

In a research note, Desjardins analyst Jeremy Rosenfield said "notionally, we view MidAmerican’s support as a positive development that could accelerate some of (TransAlta's) growth."

TransAlta shares rose more than three per cent to $15.71 on the Toronto Stock Exchange Friday.

Meanwhile, TransAlta said net income attributable to common shareholders in the third quarter was $56 million, or 24 cents per diluted share, compared to $50 million, or 22 cents per share, in the same 2011 period.

Revenue fell to $538 million in the three months ended Sept. 30 from $629 million in the same year-earlier period.

Comparable earnings were $41 million, or 18 cents per share, down from $61 million, or 27 cents per share, in the 2011 period.

"Comparable results for the quarter were primarily driven by strong availability across the fleet as generation gross margins increased by $51 million compared to the same period last year," the company said in a release.

Lower operations, maintenance and administrative costs also benefited the company during the quarter. However, the gains were partially offset by higher planned major maintenance and a loss in energy trading, while lower prices in the Alberta and Pacific Northwest markets were also a factor, it said.

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