19. Provisions (millions)
2014
2013
Balance, beginning of year
$ 18
$ 71
Provisions made Provisions settled
52
7
(2)
(3)
Change in discount rate Unwinding of discount
1 2
18
2
Balance, end of year
$ 71
$ 95
The Corporation has estimated the future cost of decommissioning certain natural gas facilities. For the purposes of estimating the fair value of these decommissioning obligations, it was assumed that the costs will be incurred between 2015 and 2109. The undiscounted cash flows required to settle the obligations total $253 million (2013 – $235 million). Discount rates between 1.0% and 2.9% were used to calculate the carrying amount of the obligation (2013 – 1.3% and 3.8%). No funds have been set aside by the Corporation to settle these obligations. 20. Equity advances The Corporation does not have share capital. However, the Corporation has received advances from CIC, which reflect an equity investment in the Corporation, to form its equity capitalization.
21. Commitments and contingencies
a. Commitments At year end, the Corporation forecasted to spend $238 million (2013 – $300 million) on capital projects during 2015, and the Corporation had $51 million (2013 – $80 million) of outstanding contractual commitments for the procurement of goods and services in the future. b. Leases As at December 31, 2014 future minimum lease payments for operating leases entered into by the Corporation, as lessee, were as follows: (millions) 2015 2016 2017 2018 2019 Thereafter
Minimum lease payments $
1
$
–
$
–
$
–
$
–
$
–
c. Contingencies The Corporation remains involved in litigation in relation to a home explosion and other incidents during 2011 in Regina, Saskatchewan. The Corporation does not expect the outcomes to result in any material financial impact.
22. Unrealized market value adjustments (millions)
2014
2013
Change in fair value of debt retirement funds
$
(7) (6)
$
7
Change in fair value of natural gas derivative instruments
(75) (12)
Change in revaluation of natural gas in storage to net realizable value
13
$
–
$ (80)
Unrealized market value adjustments represent the net income impact of measuring certain financial and derivative instruments at fair value subsequent to initial recognition (Note 10) and measuring natural gas in storage at the lower of weighted average cost and net realizable value (Note 6). These adjustments represent the change in the carrying amount of the related item during the year and are dependent on the market prices and expected delivery dates at year end.
62
Consolidated Financial Statements
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