Management’s Discussion and Analysis
With the AECO daily index increasing to an average of $2.37 per GJ throughout 2020-21 compared to $1.53 per GJ the year prior, the effect was a higher average commodity purchase cost in 2020-21, which decreased the realized margin on commodity sales. Meanwhile the GCVA balance was $6 million owing from customers at March 31, 2021 compared to $13 million owing to customers at March 31, 2020, also a result of the AECO daily index increasing commodity purchase costs and reducing the realized margin. The Corporation partially mitigates the impact of increasing natural gas market prices through physical swap sales contracts, which had a favourable impact on the 2020-21 margin compared to 2019-20.
COMMODITY REVENUE
$120
$100
$80
$60
$40
$20
$0
Residential
Small Commercial
Large Commercial
Industrial
Physical Swap Sales
Other
2020-21
2019-20
Commodity Fair Value Adjustments For the 12 months ending March 31, 2021, the fair value adjustment on commodity derivative instruments increased the margin on commodity sales by $8 million as the $4 million favourable fair value position at March 31, 2020 increased to $12 million favourable at March 31, 2021. The favourable price differential between contract prices and market prices on future commodity
purchase contracts increased to $0.33 per GJ at March 31, 2021 compared to a favourable price differential of $0.08 per GJ at March 31, 2020. SaskEnergy segregates a portion of its natural gas purchase contracts for gas that will ultimately be sold to commodity customers. Under IFRS, such contracts are not required to be reported at market value.
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