Management’s Discussion and Analysis
40
Financial Sustainability The risk that the organization is not able to maintain financial sustainability targets. • SaskEnergy prioritizes the affordability of natural gas service while balancing the need to invest in system integrity, safety and modernization. • Financial sustainability may be challenged by regulatory changes, rising costs, evolving customer demand and broader economic conditions. • The Corporation manages this risk through disciplined business planning, rate design and delivery rate applications, ongoing engagement with its shareholder and the Saskatchewan Rate Review Panel, and proactive financial monitoring. Health & Safety The risk of a significant incident or asset failure impacting employee, contractor, and/or public health and safety. • Due to the nature of its operations, SaskEnergy faces inherent safety risks that require rigorous management and continual improvement. • The Corporation maintains robust safety, integrity, damage prevention and emergency management programs, supported by training, monitoring and a strong safety culture. Asset Lifecycle The risk associated with the ability to meet the required pace of asset renewal to safely, reliably and affordably serve the province of Saskatchewan. • SaskEnergy’s extensive infrastructure network requires sustained investment to manage aging assets, potential integrity risks and evolving service requirements. • Long-term asset lifecycle planning, integrity management programs and alignment with financial and rate strategies support prudent investment decisions. Abandonment The risk associated with future abandonment funding, including stranded assets, over a potential decreasing customer base. • Changes in customer demand, technology adoption, or energy policy may affect the utilization of portions of the gas system over time. • SaskEnergy continues to assess abandonment funding approaches and engage with the shareholder to develop long-term strategies that balance affordability, intergenerational equity, and financial sustainability.
Digital Technology Adoption The risk that the organization is unable to meet technology demands, negatively impacting customer experience, employee satisfaction and operational efficiencies. • SaskEnergy is modernizing core technology platforms, including its enterprise resource planning, asset management and customer contact systems. • As digital transformation progresses, emphasis is placed on governance, change management and business readiness to ensure successful adoption and value realization. Third-Party Risk The risk the organization is exposed to negative outcomes due to a third party failing to protect data or systems, or failing to provide agreed upon business activities, functions or services. • SaskEnergy conducts detailed due diligence before entering into contracts with third parties for services, including IT-related support, due to the risk of breaches at the third party which may implicitly impact the Corporation. • SaskEnergy has contract terms, service level agreements and a privacy program in place to mitigate third-party risk exposure. Additionally, the Corporation is focused on further formalizing its third-party risk management program to enhance monitoring and reviews over existing third-party contracts. • Strong incident management and business continuity plans provide a further layer of mitigation. Market Relevance The risk that SaskEnergy fails to evolve energy solutions for customers and capture additional revenue sources to maintain long-term relevance and viability. • Customer expectations, public policy and energy technology developments continue to evolve. • SaskEnergy mitigates this risk through strategic planning, energy efficiency programs, public engagement and evaluation of emerging energy opportunities such as renewable natural gas and associated infrastructure services.
Made with FlippingBook Ebook Creator