2020-21 SaskEnergy Annual Report

Management’s Discussion and Analysis

relating to long-term debt maturities. The Corporation borrowed an additional $150 million in long-term debt at a premium of $10 million to support its capital investment requirements. SaskEnergy’s debt-to-equity ratio at the end of March 31, 2021 of 58 per cent debt and 42 per cent equity is within the Corporation’s long-term target range of 58 to 63 per cent debt. On April 13, 2021, the Corporation entered into an agreement with the Province to borrow an additional $50 million of long-term debt with an interest rate of 2.8 per cent, maturing in 2052.

work is also contributing to the reduced investing activity; however, the risk profile of the Corporation has not been negatively impacted as a result. Financing Activities Cash provided by financing activities declined $36 million through the 12 months ending March 31, 2021 compared to 2019-20. The Corporation used $57 million for interest payments, $16 million for dividend payments, decreased short-term debt by $15 million and paid $34 million

CAPITAL ADDITIONS Capital additions, as reported in the consolidated financial statements, were as follows:

March 31, 2021

March 31, 2020



Strategic Customer growth System expansion


61 $

55 $



149 204

(74) (68)


Operational Risk management

56 23 15

83 27 15



Reliability of natural gas service


Business and technology optimization

94 $

125 $ 329 $

( 31) ( 99)


230 $

Capital additions

and preliminary capital expenditures on an 85-kilometre gas line from Rosetown to Vanscoy. Completion of this project, which will increase gas line capacity from Rosetown to the Saskatoon South Bypass gas line, is planned for 2021-22. Risk management spending on the distribution system declined $27 million year-over-year as the timing of some service upgrade projects have been adjusted to meet changing requirements. None of the reductions impacted SaskEnergy’s ability to safely deliver natural gas to its customers.

Capital additions through the 12 months ending March 31, 2021 were $99 million lower than the 2019-20 investment. Many system expansion projects planned for 2020-21 were reduced or deferred by the Corporation and its customers, due to the uncertainty of the impact of a suppressed oil and gas market and COVID-19 resulting in lower than expected load growth. System expansion initiatives decreased $74 million in 2020-21 compared to 2019-20 primarily due to the lower than planned load growth. In addition, several large projects were completed in 2019-20, including the project to address growth in and around the City of Saskatoon


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