Management’s Discussion and Analysis
SaskEnergy is committed to providing solutions and services that benefit customers and Saskatchewan, leveraging the Corporation’s expertise and Saskatchewan’s private sector. The Corporation deploys its strategic capital to fund customer growth and create new business capabilities. Fulfilling customer demand for additional natural gas capacity is a core responsibility for the Corporation and demand is forecasted to increase as a result of the growing industrial and power generation sectors. Key focus areas include maintaining the safety and reliability of the natural gas transmission and distribution systems, enhancing customer experience, and supporting the emissions reduction strategy. Capital additions through the nine months ended December 31, 2024, were $11 million higher than the investment made in 2023, primarily due to customers increasing demand for natural gas services and the Corporation focusing investment on the purchase of equipment, system improvements and technological advancements. Customer Growth Investment in customer growth projects of $52 million was $11 million higher than 2023 investment levels, as the Corporation continues to focus on investments that connect customers to the transmission and distribution systems. System Expansion System expansion capital projects provide incremental capacity for the transmission and distribution systems, through the installation of new or expanded gas line or facility assets, thus enabling demand growth and the addition of new customers. Investment in system expansion projects equals 2023 and focuses on distribution system infrastructure reinforcement projects in the Regina area, which will increase available delivery capacity in east Regina and position the Corporation to meet new customer demand. Risk Management Capital investment in safety and system integrity continues to be SaskEnergy’s top priority. SaskEnergy takes a long-term view and uses a risk-based approach, to determine project priorities and the appropriate level of total integrity spending. Industry comparable data also provides reference, as the industry as a whole has progressively elevated safety and system integrity capital investment over the last number of years. Risk management capital projects concentrate on mitigating the likelihood of a negative consequence occurring on the SaskEnergy system, such as damage or loss of gas containment. These consequences typically include damage to infrastructure, environment and potential harm to or loss of human life. Risk management spending of $73 million is the Corporation’s highest category of capital investment year-to-date, and intensified in 2024 compared to 2023, as the Corporation focuses on system improvement projects and cathodic protection, measurement and service replacement projects. Reliability of Natural Gas Service SaskEnergy’s network of transmission and distribution infrastructure requires regular monitoring and inspection, maintenance, upgrading and replacement to maintain service reliability for customers, avoid public safety incidents, and meet growing regulatory requirements. Recent years have also seen an increase in the cyber threat landscape and as a critical infrastructure operator, the Corporation has developed a robust Enterprise Security program that addresses both cyber and physical risks. This program requires continual improvement to mitigate risks and ensure secure systems for reliable operations. Reliability of natural gas in service includes enhancements, modifications or upgrades to facilities, ensuring that natural gas demand will be met without failure or loss of service. Reliability of natural gas service spending decreased by $10 million in 2024, as the Corporation focuses investment on purchasing construction equipment, system improvement work on town border stations and network improvements. Business and Technology Optimization Business and technology optimization ensures that every investment in information technology, every resource allocated and every application in development or in production, meets the Corporation’s business goals. The 2024 year-to-date investment in business and technology optimization is comparable to 2023 expenditures and focused on a work management system upgrade project, which centers on work management business processes, foundational core systems integrations, and execution of ongoing enhancements.
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