Management’s Discussion and Analysis
Other Expenses SaskEnergy’s expenses are driven to a large degree by its investment in its transmission, distribution and storage systems. Depreciation and amortization expense, net finance expenses and Saskatchewan taxes are directly tied to the investment in facilities. As the level of investment in facilities increases, these expenses also increase. Employee benefit expenses, and operating and maintenance expenses, are also driven by the Corporation’s investment in facilities, although less directly. As the number of customers increases, infrastructure to serve those customers grows, and the costs to operate and maintain the system rise
in correlation with the increasing kilometres of gas lines, number of service connections and amount of compression equipment. Additional regulatory requirements and changing public expectations have resulted in accelerated prevention, detection and mitigation initiatives — adding pressure to transportation and storage, and delivery service rates. To mitigate these cost pressures, SaskEnergy continues to proactively target efficiencies and other savings to provide cost-effective delivery of natural gas to its customers.
Other expenses, net finance expenses and other net losses, as reported in the consolidated financial statements, were as follows:
(millions)
March 31, 2024 March 31, 2023
Change
$
119 $
Employee benefits
109 $
10
206 140
Operating and maintenance Depreciation and amortization
198 146
8
(6)
19
Saskatchewan taxes
18
1
-
Loss on trade and other receivables
7
(7)
$ $ $
484 $
478 $
6 5 3
78 $
Net finance expenses
73 $
5 $
Other net losses
2 $
Employee Benefits Employee benefit costs were $10 million higher for the 12 months ending March 31, 2024 compared to the prior year, as full-time equivalents are trending higher, due to the Corporation filling previously vacant positions.
Operating and Maintenance Operating and maintenance expenses were $8 million higher than 2022- 2 3, as the Corporation focuses on leveraging technology and enhancing customer service offerings. The modernization of technology solutions to cloud computing arrangements typically involves ongoing licensing and hosting fees compared to the historical purchase model. Customer experience enhancements focused on a new mobile app, online appointment booking and two-hour arrival windows for meter exchanges contributed to rising costs in 2023-24.
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