Management’s Discussion and Analysis
Transportation and Storage Revenue The Corporation generates transportation revenue by receiving gas from customers at various receipt points in Saskatchewan and Alberta, and delivering natural gas to customers at various delivery points in the province. The transportation toll structure consists of a receipt service charge, which customers pay when they put gas on to the natural gas transportation system, and a delivery service charge that customers pay when they take delivery off of the natural gas transportation system. For receipt and delivery services, the Corporation offers both firm and interruptible transportation contracts. Under a firm service contract, the customer has a right to deliver or receive a specified quantity of gas on each day of the contract. With a firm contract, customers pay for the amount of capacity they have contracted for whether they use it or not. Under an interruptible contract, customers may deliver or receive gas only when there is available capacity on the system and only pay receipt and delivery tolls when they deliver or receive gas. Integral to the Corporation’s transmission system are several strategically located natural gas storage sites, which have the capacity to provide operational flexibility along with a reliable and competitive natural gas storage service. Delivery revenue increased by $3 million as domestic customers increased contracting for firm delivery service, which was partially offset by $1 million as interruptible delivery service contracts were reduced. Export customers decreased both firm and interruptible contracts by $4 million. Customer Capital Contributions The Corporation receives capital contributions from customers to partially offset the cost of constructing facilities to connect them to the transmission and distribution systems. Generally, contributions related to transmission system projects tend to be larger but less frequent than contributions related to the distribution system. The volume and magnitude of customer contribution revenue can vary significantly period-over-period as various factors influence their receipt and recognition as revenue. Customer capital contributions for the 12 months ending March 31, 2021 were $13 million higher than the same period ending March 31, 2020 as a capital project for a transmission customer was completed in the fourth quarter and the related customer contribution was recognized.
TRANSPORTATION AND STORAGE REVENUE
450
$180 $200
400
$160
350
$100 $120 $140
300
250
200
$60 $80
150
100
$40
50
$20
0
$0
2016-17
2017-18
2018-19
2019-20
2020-21
Transportation and Storage Revenue
Transmission Volumes
Included in transportation and storage revenue is storage revenue of $10 million for the 12 months ending March 31, 2021, which approximated 2019-20. The abundance of natural gas, coupled with small or even negative differentials between current and forward natural gas prices, limits the demand for natural gas storage to those customers with relatively low load factors who use the service to mitigate receipt transportation charges.
CUSTOMER CAPITAL CONTRIBUTIONS
$70
$60
$50
$40
$30
$20
$10
$0
2017-18
2018-19
2019-20
2020-21
2016-17
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