While commodity stocks generally elicit thoughts of miners, growers and drillers, power generation firms shouldn't be left out of the group. Today's robust energy markets include electric power trading -- and like any oil company, generation firms ultimately see their profitability ebb and flow with electric rates beyond their control. One of the most interesting generation firms out there is TransAlta ( TAC), a Canadian merchant generation utility that owns around 8,700 megawatts of capacity -- nearly a quarter of which is green hydro power. TransAlta has long-term contracts in place for much of its output capacity, a feature that vastly reduces risks to TAC and makes earnings highly predictable. Even so, those contracts limit the upside TransAlta can enjoy in inflationary environments where rates are rising. As a result, the company is working toward developing new generation assets that won't be tied down by power purchase agreements. Despite a healthy balance sheet and a dividend that rings in at 5.69% right now, short-sellers have made big bets against this stock. The company's short interest ratio currently rings in at a massive 32.5, suggesting that it would take more than six weeks of buying for short-sellers to cover at current volume levels. With a C hold rating from TheStreet Ratings, TransAlta is one of the top-rated independent power producer stocks. To see this week's trades in action, check out the Resource Stock Short Squeezes 2011 portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.