2020-21 SaskEnergy Annual Report

Management’s Discussion and Analysis

land. This has been a trend for several years now; however, as a fossil fuel provider that uses gas lines to deliver its product, the Corporation faces additional challenges due to growing opposition from members of the general public with respect to further development of fossil fuel infrastructure. • SaskEnergy’s land acquisition and engagement processes have focused on addressing the concerns of impacted stakeholders, including Indigenous groups, individual landowners and other members of the public. These processes will continue to adapt to address concerns and mitigate any impacts to specific projects. Natural Gas Line or Facility Failure The possibility of a natural gas line or facility failure and the impact to public safety. • Operating high pressure transmission lines and delivering natural gas to customer homes and businesses has an associated inherent risk to public safety in the event of a line rupture or other asset failure. • The current risk level has been reached after many years of building and continuously improving robust integrity management programs for all of the organization’s pressure containing assets. Efforts to execute on these programs and address this risk continue to be represented in a sizeable portion of the Corporation’s capital and operating and maintenance budgets. Cyber Security The possibility of a cyberattack against the Corporation’s operating or information technology systems that results in a loss of control or breach of data. • SaskEnergy’s business and the operation of the Corporation’s physical gas system heavily rely on information technology to safely and effectively operate. The threat of an attack that disrupts or gains access to SaskEnergy’s systems is constantly evolving; as an operator of critical infrastructure, this can be particularly appealing to those who are maliciously inclined. • The Corporation’s efforts to address the risk of a cyberattack have increased in recent years in order to keep pace with the growing threat environment. Programs and processes to prevent unauthorized access and monitor for attacks will continue, as will efforts to increase their maturity to successfully mitigate external threats.

• Recent years have seen enhanced regulations and activity from federal and provincial regulators regarding both pipeline operations and environmental standards. Further regulations are likely and may create additional compliance requirements or have other impacts on the organization. • SaskEnergy responds to new regulations as efficiently as possible; however, efforts to impact the scope or details of regulation are presently limited to industry advocacy and lobbying through participation with relevant industry associations. • SaskEnergy actively participates and engages with the Government of Saskatchewan’s Climate Change Committee to share information and proactively prepare for any upcoming regulatory impacts. Public Acceptance The risk to growth and system use as a result of changes in the public perception of natural gas. • The role of fossil fuels in the energy mix is an active and growing public debate both nationally and beyond. Private and public sector commitments to a net zero future are growing. While the acceptability of natural gas use presently remains high in the local market, concerns of that eroding are higher than desired. A proactive response to maintain a high level of acceptance is planned. • Primary mitigation efforts include corporate branding and marketing that highlight SaskEnergy’s energy efficiency programs, as well as operational sustainability projects that improve the Corporation’s own efficiency related to emissions. • Efforts to further address this risk will include investigation of other innovative methods for improving the sustainability of SaskEnergy’s product and operations and being active participants in new energy efficiency infrastructure developments as they arise. In addition, efforts to engage stakeholders and communicate our progress to the public will also be key actions. Interest Groups The risk to infrastructure development and maintenance due to public objection from a cultural, safety, environmental or societal perspective. • Public sentiment has changed — customers want a high level of service but many do not want the associated infrastructure nearby, or through their


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