Management’s Discussion and Analysis
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Risk Management and Disclosure SaskEnergy is subject to risks in the transmission, storage, distribution and sale of natural gas, and the effectiveness in managing these risks is a key determinant of SaskEnergy’s overall corporate performance. The Corporation manages risk by thoroughly examining its operating activities, identifying existing and emerging risks, effectively communicating those risks throughout the Corporation, and actively managing them through its Enterprise Risk Management (ERM) process. The ERM process establishes roles, responsibilities, and a general strategy for the Corporation to manage risks. Risk management is the responsibility of all levels of management. However, the Board of Directors and Executive Committee set the tone and provide direction for the ERM process. The Executive Committee is responsible for formally identifying strategic risks impacting SaskEnergy’s goals, participating in risk assessment processes, and developing strategic risk management plans. The Board of Directors is responsible for the ERM Policy and framework. The Board oversees annual reports on risk management processes and controls, while ensuring key corporate initiatives appropriately address identified risks. SaskEnergy conducts an annual enterprise-wide risk assessment, which provides input into its strategic and business planning processes. Many of the risks SaskEnergy faces continue to evolve, requiring adaptive and flexible risk management strategies. The risks described below represent SaskEnergy’s top enterprise risks as identified in the most recent Enterprise Risk Register. Government Climate Policy The risk that government(s) impose new environmental or operational regulations that impair or restrict operations or prevent further development of the Corporation’s gas system. • Uncertainty related to future climate and energy policies continues to represent one of the most significant risks facing SaskEnergy. Federal, provincial and municipal governments are advancing policies and regulations related to emissions reductions, environmental performance and energy transition that may directly or indirectly impact the affordability, operation and expansion of the natural gas system.
• SaskEnergy responds to new regulations as efficiently as possible and participates in industry advocacy through organizations such as the Canadian Gas Association, while also engaging with governments, regulators, municipalities and other stakeholders to support pragmatic policy outcomes. • The Corporation remains committed to working collaboratively with communities and municipalities on the evolving role of energy in Saskatchewan. Cybersecurity The possibility of a cyberattack against the Corporation’s operating or information technology systems, which results in a loss or misuse of critical data and information. • SaskEnergy relies heavily on information and operational technology systems to operate its natural gas transmission and distribution infrastructure safely and reliably. As a critical infrastructure operator, the Corporation faces a constantly evolving cyber threat environment. • The Corporation perpetually intensifies efforts to address the risk of a cyberattack, keeping pace with the growing threat environment. Programs and processes preventing unauthorized access and monitoring for attacks will continue, as will efforts to increase the ability to successfully mitigate external threats. Workforce Talent The risk of lacking appropriately skilled resources to effectively execute SaskEnergy’s corporate plan. • SaskEnergy’s workforce requirements continue to evolve as digital capabilities, asset management practices and energy-related competencies become increasingly important. • The Corporation focuses on attracting, developing and retaining talent through competitive total rewards, learning and development programs, workplace flexibility, and fostering a safe, representative and supportive work environment. Project Execution Failure to effectively and responsibly deliver major projects and the subsequent impact on SaskEnergy’s plans. • SaskEnergy undertakes complex capital and technology projects that are critical to maintaining system reliability, safety and long-term affordability. • Strong investment governance, enterprise project portfolio management, and enhanced project oversight processes are in place to mitigate risks related to cost, schedule and delivery performance.
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