Management’s Discussion and Analysis
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Outlook For 2026-27, SaskEnergy’s strategic focus continues to be on delivering safe, reliable and affordable energy to Saskatchewan. This includes updated strategic imperatives, moving from Affordability and Environmental Responsibility in previous years, to Affordability and Financial Sustainability. This shift reflects the Corporation’s focus on balancing affordability for customers, with the need to strengthen financial sustainability to support long-term service delivery and infrastructure investment. As operating and capital cost pressures continue to outpace revenue growth, SaskEnergy is sharpening its focus on maintaining competitive rates for customers, while safeguarding its financial capacity to sustain operations, reinvest in core assets, and respond to a rapidly evolving energy landscape and changing economic environment. Going forward, SaskEnergy anticipates modest growth in natural gas demand, driven largely by the industrial and power generation sectors. While residential customer connections are expected to continue increasing, overall demand and revenue growth from this segment is forecast to remain stable due to ongoing energy efficiency improvements. These dynamics reinforce the need for prudent financial management, as system growth and customer expectations must be supported within increasingly constrained financial margins from the core business revenues associated with natural gas distribution and transmission. Affordability remains a top priority, with operational excellence serving as a key lever to limit future delivery rate pressures while preserving the Corporation’s financial health. SaskEnergy will continue to make capital investments in Saskatchewan, focusing on the safety and reliability of the transmission and distribution systems, meeting future customer demand, improving customer experience, and supporting emissions reduction activities as part of core operations. Earnings pressure is expected to persist in 2026-27, as SaskEnergy addresses rising operating costs associated with maintaining a safe and reliable system, strengthening cybersecurity, and investing in digital technologies to enhance customer service and internal efficiencies. These investments are necessary to protect critical infrastructure, improve service delivery and enable more efficient supporting processes, but they further underscore the importance of cost control, prioritization and revenue optimization under the Corporation’s financial sustainability imperative.
System Expansion System expansion capital projects provide incremental capacity for the transmission and distribution systems through the installation of new or expanded gas lines or facility assets, thus enabling demand growth and the addition of new customers. In 2025-26, SaskEnergy invested $29 million more in system expansion projects compared to the same period in 2024-25, due to some large multi-year system expansion projects coming to a close in the fiscal year, including an additional compression facility east of Regina and expansions at its existing Bayhurst and Unity compressor stations. Reliability of Natural Gas Service SaskEnergy’s network of transmission and distribution infrastructure requires regular monitoring, 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. 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 projects include enhancements, modifications or upgrades to facilities to meet natural gas demand and maintain service. Total service reliability spending decreased by $18 million compared to the prior year. The Corporation focused investment on purchasing construction equipment, system improvement work on town border stations, and network improvements in 2025-26. Business and Technology Optimization Business and technology optimization ensures that every investment in information technology, every resource allocated and every application in development or production, meets the Corporation’s business goals. The 2025-26 investment in business and technology optimization of $12 million was slightly higher than the prior year and focused on a network system upgrade project with the goal to improve work management business processes, support foundational core systems integrations, and execute ongoing enhancements.
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