2014 SaskEnergy Annual Report

Meeting Operational Challenges Summer saw flooding in a number of communities in southeastern Saskatchewan and a well co-ordinated emergency response from SaskEnergy field and office staff in the area. The significant rainfall over this period also accelerated ground shifting in communities where certain soil conditions are present, including resort communities along Last Mountain Lake. Even with increased monitoring of buried infrastructure within those communities, significant effort was required later in the year to respond to an incident at Regina Beach, upgrade pipeline infrastructure and develop longer- term plans to mitigate the risks presented by ongoing ground movement. The discussion and collaborative efforts with these communities were valued. Finally, a system failure at the Prud’homme Storage Cavern in October resulted in infrastructure damage and the unplanned release of approximately 650 terajoules of gas, a situation effectively managed through our Incident Command System and resolved with the assistance of expert third-party contractors. My thanks to everyone — employees, contractors, emergency responders, local officials and residents of the affected communities — involved in overcoming each of these challenges. The spirit of teamwork and co-operation is greatly appreciated, and the lessons learned from each of these circumstances have been captured and included as part of SaskEnergy’s future direction. Public and Employee Safety Results Proactive efforts yielded favourable results for SaskEnergy/ TransGas in 2014, most notably in safety-related initiatives. On the public safety front, the Corporation collaborated with SaskPower and SaskTel to reduce dangerous third-party contacts with buried infrastructure. Through a variety of innovative programs, SaskEnergy saw provincial line contact numbers drop by 23 per cent from 2013 rates — a notable accomplishment, which will be shared with our Canadian Gas Association peer companies. The Corporation also continued to see positive trending in reducing workplace injuries and accidents, recording its best-ever corporate safety performance in 2014, with a Total Recordable Injury Frequency Rate of 2.22. This accomplishment builds on our commitment to the provincial Mission: Zero target and validates the proactive safety programs and processes in place across SaskEnergy and TransGas.

Efficiencies through Collaboration Thanks to an ongoing focus on efficiency/productivity initiatives, SaskEnergy has realized $32 million in incremental savings over the last five years including $4.6 million in 2014, maintaining a flat internal resourcing level while effectively meeting the demands of a growing provincial economy. These savings have been key in allowing SaskEnergy to offer the lowest residential delivery levels in Canada for the better part of the last decade. Many of these savings are the result of collaborative initiatives, including work with SaskPower and SaskTel to streamline a joint servicing approach in the development of new residential subdivisions, and expansion of the joint line locating program, which sees one qualified technician locating multiple buried lines, rather than each company performing this service individually. Over the coming years, these collaboration efforts — whether with peer Crown corporations, private sector companies, technology partners, industrial customers or urban developers — represent continued opportunities for SaskEnergy and TransGas to enhance service delivery and increase the value we provide. Identifying and Mitigating Risk From a leadership perspective, 2014 reinforced the need for a continued proactive approach in risk identification and mitigation, an area where SaskEnergy/TransGas has shown favourable results related to system integrity programming, damage prevention initiatives and strategic projects to actively upgrade infrastructure. While ongoing success in this endeavor requires constant vigilance and mobilization of our entire team, I am confident that SaskEnergy is up to the challenge. The past year also provided numerous opportunities to appreciate the men and women of SaskEnergy/TransGas for their skill, ingenuity and ability to work together to deliver results. I am proud to support the excellent work done by these teams across Saskatchewan.

Sincerely,

[Original signed by D. Kelln]

Doug Kelln President and Chief Executive Officer, SaskEnergy

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2014 Annual Report SaskEnergy

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