Management’s Discussion and Analysis
System expansion capital projects provide incremental capacity for the transmission and distribution systems, through the installation of new or expanded gas line or facility assets, thus enabling demand growth and the addition of new customers. Lower investment of $78 million in system expansion projects through 2022 are a result of higher spending in 2021 on the Pierceland supply project and the 86-kilometre gas line from Rosetown to Vanscoy — which increases the Corporation’s gas line capacity from Rosetown to the Saskatoon Bypass gas line and east of the city. Both these projects were in-service in 2021-22. Risk management capital projects concentrate on mitigating the likelihood of a negative consequence occurring on the SaskEnergy system, such as damage or loss of gas containment. These consequences typically include damage to infrastructure, environment and potential harm to or loss of human life. Risk management spending of $54 million is approximately one-third of the Corporation’s 2022 year-to-date capital additions and increased $2 million over 2021 expenditures. Risk management efforts ensure safe and reliable service and rely on the Corporation’s inline inspection programs, which determine where the Corporation conducts system integrity digs the following year. Over many years of conducting inline inspection and integrity digs, the Corporation is realizing cost savings from balancing cost and re-inspection intervals while still actively managing and monitoring risk. The Corporation is able to focus integrity program investments on appropriate components of the system and still maintain a high level of natural gas deliverability to its customers. The Corporation’s programs typically focus on gas lines equal to and larger than six inches and equal to or greater than five kilometers, which are considered well suited for integrity runs. Most gas lines below these thresholds are considered “difficult to inspect” or do not meet cost/benefit levels from an industry perspective and are monitored through other integrity measures and methods. With half the Corporation’s transmission gas lines falling within the scope of the inline inspection program, 20 inline inspections were conducted over 560 kilometers of the Corporations natural gas lines throughout the nine months ending December 31, 2022. SaskEnergy’s Leak Detection and Repair (LDAR) program seeks to minimize natural gas leaks, which results in more environmentally friendly and efficient operations, as well as increased safety of the system. Advanced technology used for this program, identifies more leaks at lower concentrations, typically before they are detectable by the public and well in advance of becoming hazardous. Currently, over 90 per cent of underground leaks are typically found by the Corporation. Based on integrity analysis and previous leak survey findings, SaskEnergy knows where to look and is able to focus on those areas of the system proactively. This allows integrity work to be scheduled rather than conducted under emergency conditions, which are performed at a cost premium. The success of early detection of leaks and more efficient surveys allows SaskEnergy to take a risk-based approach to prioritize repairs, maximize operational resources and minimize safety risks. Approximately one quarter of the entire distribution system, which includes natural gas mains, services, meter sets, and regulator stations, are surveyed annually. Through the nine months ending December 31, 2022, leaks were detected by the Corporation through the LDAR program. The Corporation has recently adopted a practice to install a small meter bypass fitting on residential customers’ natural gas services. SaskEnergy is required to exchange natural gas meters in compliance with Measurement Canada regulations. To perform work on a meter set with the new bypass fitting, a temporary flexible hose with an inline regulator is installed and allows meter exchange work to be performed without interrupting gas service to the customer. The initiative will result in a more efficient meter upgrade process and a significantly improved customer experience. The improved customer experience is achieved by the elimination of a customer appointment to perform typical meter exchanges: Technicians are no longer required to relight customer appliances because the natural gas service is not interrupted during the meter exchange; technicians are no longer required to enter the customer premise; the technician’s time on site is reduced with the use of a bypass fitting and the volume of gas released to the atmosphere is reduced when an exchange is completed with a bypass meter installed. The bypass fittings are currently being installed during new natural gas service installations, existing customer upgrades and riser alterations. The Corporation’s service upgrade program focused on Regina, Saskatoon and Humboldt areas with 2,664 upgrades completed through the nine months ending December 31, 2022, with bypass fittings being installed in Saskatoon and Humboldt. Reliability of natural gas in service includes property purchases for corporate business and the enhancement and/or extension of the life of property through renovations, modifications and/or upgrades. These projects give customers a degree of confidence that natural gas demand will be met without failure or loss of service. Reliability of natural gas service spending increased in 2022 by $5 million as the Corporation’s investment returned to normal levels, after having to reallocate resources to customer-focused service upgrade and alteration projects in 2021. With the restoration of reliability investment programs in 2022, the Corporation focused on district regulator station, town border station and odorant facility upgrades.
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