Management’s Discussion and Analysis
Revenue Delivery revenue, transportation and storage revenue, and customer capital contributions, as reported in the consolidated financial statements, were as follows:
(millions)
March 31, 2024 March 31, 2023
Change
$
304 $
Delivery revenue
313 $
(9)
236
Transportation and storage revenue Customer capital contributions
235
1
28
57
(29) (37)
$
568 $
Revenue
605 $
Delivery Revenue Natural gas delivery rates are designed to recoup all distribution facility and operating costs necessary for delivery of natural gas to customers throughout the year and earn a return for its shareholder. Natural gas storage and transportation costs — as well as ongoing investments related to safety, system integrity and growing infrastructure — are factored into delivery rates. Other considerations impacting natural gas delivery services include regulatory code compliance and industry best practices regarding safety. To minimize the financial impacts of these on delivery service customers, the Corporation strives to make the most effective use of resources and technology, and to collaborate with other Crown corporations and executive government. Delivery revenue is primarily driven by the number of customers and the amount of natural gas they consume. Weather is the most significant external factor affecting delivery revenue, as residential and commercial customers consume natural gas primarily as heating fuel. Delivery revenue was $9 million lower than 2022-23, primarily due to weather being nine per cent warmer than normal through 2023-24, compared to seven per cent colder than normal through 2022-23. This was partially offset by the impact of rate increases effective August 1, 2022, and October 1, 2023 and increased consumption from the 2,579 customers added this year.
Delivery Revenue
Transportation and Storage Revenue The Corporation generates transportation revenue by receiving gas from customers at various receipt points in Saskatchewan and Alberta and delivering natural gas to customers at various delivery points in the province. The transportation toll structure consists of a receipt service charge, which customers pay when they put gas onto the natural gas transportation system, and a delivery service charge that customers pay when they take delivery from the natural gas transportation system. For receipt and delivery services, the Corporation offers both firm and interruptible transportation contracts. Under a firm service contract, the customer has a right to deliver or receive a specified quantity of gas on each day of the contract. With a firm contract, customers pay for the amount of capacity they have contracted for, whether they use it or not.
38
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