Management’s Discussion and Analysis
Revaluation of Natural Gas in Storage At each reporting period, the Corporation measures the net realizable value of natural gas in storage held for asset optimization transactions based on forward market prices and anticipated delivery dates. The carrying amount of natural gas in storage is adjusted to reflect the lower of weighted average cost and net realizable value. Asset optimization natural gas in storage was recorded at
weighted average cost at March 31, 2021 and equaled net realizable value. With near term forward natural gas market prices increasing since March 2020, the $7 million unfavourable net realizable value adjustment recorded at March 31, 2020 was recovered, having a $7 million favourable impact on 2020-21 net income.
Revenue Delivery revenue, transportation and storage revenue, and customer capital contributions, as reported in the consolidated financial statements, were as follows:
March 31, 2021
March 31, 2020
Transportation and storage revenue Customer capital contributions
Delivery Revenue Delivery revenue is driven by the number of customers and the amount of natural gas they consume. Weather is the external factor that most affects delivery revenue, as residential and commercial customers consume natural gas primarily as heating fuel. Delivery revenue for the 12 months ending March 31, 2021 equaled 2019-20 as weather was two per cent colder than normal in both periods. The Corporation added 3,001 customers through the 12 months ending March 31, 2021, which was higher than the 2,459 customers added during the previous fiscal period. The addition of new customers contributed additional revenue in 2020-21 but was equally offset by decreasing revenue from commercial customers. In alignment with the Crown Sector Strategic Priorities, the Corporation continues to focus on providing the province’s population with efficient and timely access to natural gas service while keeping rates competitive.
Heating Degree Days
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