2014 SaskEnergy Annual Report
Annual Report 2024-25
Community Aspiration Environmental sustainability and economic prosperity for future generations of Saskatchewan. Vision Providing critical energy to support a prosperous Saskatchewan. Mission SaskEnergy delivers natural gas and energy solutions responsibly to the residents, businesses, and industries of Saskatchewan.
Values
Safety We commit to our personal safety, the safety of our team, and the public.
Integrity We are accountable for our decisions, our actions, and the results.
Stewardship We align resources towards the greatest and most responsible impact.
Teamwork We collaborate, respect, and trust one another. We are diverse and inclusive.
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Contents
As the energy provider for the residents, businesses and industries of Saskatchewan, we are committed to delivering safe, reliable and accessible service, providing affordable rates and striving for customer service excellence. Along with our commitment to reducing the environmental impact of our natural gas system, we support our customers in achieving their energy efficiency goals.
5 Our Business 6 Corporate Profile 7 Letter of Transmittal 8 Chair’s Message 9 President’s Message 12 Looking Back at 2024-25 16 Committed to Customers and Communities 17 Financial and Operating Highlights 23 Management’s Discussion and Analysis
49 Consolidated Financial Statements 58 Notes to the Consolidated Financial Statements 86 Corporate Governance 88 Supplementary Information 90 Glossary of Key Success Measures 93 Glossary of Natural Gas Measurements 94 Saskatchewan Natural Gas Transmission Lines
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Celebrating 30 years of sharing the warmth After starting as a sweater recycling project in 1994, SaskEnergy’s Share the Warmth program has grown into a grant program that provides funding to charitable organizations that offer warm clothing, shelter, food services or mental health support to help vulnerable citizens manage our cold prairie winters. In celebration of 30 years of the program, Share the Warmth Days were held at six locations around the province to highlight the community-based organizations that received grants this year. More than 100 organizations received a Share the Warmth grant of up to $1,000 in honour of the milestone.
The organizations that participate in the Share the Warmth program throughout the province are essential to the communities they serve. I have watched this program grow over the last three decades and take great pride in the positive impact it has on the organizations that receive the grants as well as the people they support. — Mark Guillet, SaskEnergy President & CEO “ ”
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Our Business
Natural gas plays a critical role in meeting Saskatchewan’s energy needs and demand continues to grow. As a provincial Crown corporation, SaskEnergy is proud to provide safe, reliable and affordable energy to households, businesses, farms and industries. With a system that is more than 99.99 per cent reliable, we serve customers in communities across Saskatchewan through our 15,190 kilometres of transmission lines and 72,662 kilometres of distribution lines. Our more than 1,200 dedicated employees throughout the province are committed to providing ease of service and the best possible experience for each of our nearly 415,000 customers. We recognize our role in supporting the industries and residents of the province and continue to provide our customers with competitive rates — our delivery rates remain among the lowest in Canada. As SaskEnergy contributes to the economic prosperity of Saskatchewan people and communities, environmental responsibility remains a core focus of our business. Our commitment to reducing emissions from our operations extends to our customers, supporting their efforts to make their homes and businesses more energy efficient.
Delivering Value to our Customers SaskEnergy exists to serve the people of Saskatchewan. Our customers include:
Residential • Urban • Rural
Commercial • Retail businesses • Restaurants • Small hospitals • Curling rinks • Hotels • Warehouse buildings
Industrial • Potash mines • Power generation • Value-added agricultural sector • Enhanced oil recovery • Manufacturing • Large hospitals • Universities
As we work toward our vision of providing critical energy to support a prosperous Saskatchewan, we are guided by our two strategic imperatives.
Affordability • Lowest cost energy source in Saskatchewan • Stable and competitive rates • Top quartile of the lowest delivery rates across the country
Environmental Responsibility • Responsible energy company • Reduce our operational emissions by 35 per cent by 2030 • Support customers in reducing emissions by 170,000 tonnes carbon dioxide equivalent (CO 2 e) by 2030
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Corporate Profile
Crown Investments Corporation of Saskatchewan
SaskEnergy Incorporated
Many Islands Pipe Lines (Canada) Limited
TransGas Limited
Bayhurst Gas Limited
Transmission and Storage
Natural Gas in Storage
Interprovincial Transmission
BG Storage Inc. * Storage Joint Arrangement
SaskEnergy Incorporated (SaskEnergy or the Corporation) is a Saskatchewan Crown corporation governed by The SaskEnergy Act . It is a designated subsidiary of Crown Investments Corporation of Saskatchewan (CIC). CIC is also a Crown corporation and effectively operates as the Province’s holding company for commercial Crown corporations (such as SaskPower, SaskTel and SGI) and various commercial investments. SaskEnergy’s primary business is the sale and delivery of natural gas through its distribution utility. SaskEnergy owns and operates the distribution utility, which includes the legislative franchise to distribute natural gas within the province of Saskatchewan. The Provincial Cabinet regulates SaskEnergy’s delivery service and commodity rates. All rate changes are subject to review by the Saskatchewan Rate Review Panel, an independent body, prior to receiving Provincial Cabinet approval. SaskEnergy’s corporate structure includes three wholly owned subsidiaries, as follows * : TransGas Limited (TransGas) owns and operates the transmission utility and has the exclusive legislative franchise to transport natural gas within the province of Saskatchewan. TransGas also owns and operates a natural gas storage business, which is integrated with the transmission gas line system. Bayhurst Gas Limited (Bayhurst) owns a natural gas storage facility in the northwestern area of Saskatchewan. Many Islands Pipe Lines (Canada) Limited (MIPL) is a federally regulated transmission company that owns eight transmission gas line interconnections to Alberta, two into the United States, one into Manitoba, and one interconnect between the MIPL system and the federally regulated Foothills Saskatchewan system. MIPL is regulated by the Canada Energy Regulator.
* As of December 31, 2024, all assets and liabilities of BG Storage Inc. were transferred to its shareholder, Bayhurst Gas Limited. BG Storage Inc. now exists as a shelf company.
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Letter of Transmittal
Regina, Saskatchewan June 2025
Her Honour the Honourable Bernadette McIntyre, S.O.M. Lieutenant Governor of Saskatchewan Province of Saskatchewan
May it please Your Honour: I have the honour to submit herewith the annual report of SaskEnergy Incorporated for the fiscal year ending March 31, 2025, in accordance with The SaskEnergy Act . The Financial Statements included in this annual report are in the form approved by Crown Investments Corporation of Saskatchewan as required by The Financial Administration Act, 1993 and have been reported on by the auditors.
Respectfully submitted,
Honourable Jeremy Harrison Minister Responsible for SaskEnergy Incorporated
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Chair’s Message
On behalf of the SaskEnergy Board of Directors, I am pleased to join the Minister Responsible for SaskEnergy, the Honourable Jeremy Harrison, in presenting SaskEnergy’s 2024-25 Annual Report. The Crown sector is a vital part of the Government of Saskatchewan’s plan for growth over the next decade, and beyond. With one of the fastest growing economies in Canada and a record high provincial population, the people and industries of Saskatchewan rely on Crown corporations more than ever before. During 2024-25, SaskEnergy produced strong results in key focus areas such as safety, reliability, affordability, environmental responsibility and ease of service for customers. Through strong financial management, the Corporation continues to act in the best interests of the province,
supporting economic growth and the strong quality of life for which Saskatchewan is known. As a Board, we will continue to support these efforts and ensure SaskEnergy is aligned with the Government of Saskatchewan’s Crown Sector Strategic Priorities and the Saskatchewan Growth Plan. Through its long-standing commitment to our province and its people, SaskEnergy is an integral part of Saskatchewan’s growth and success, providing the energy Saskatchewan needs. I would like to acknowledge the contributions of Leanne Gailey, who left the Board this year. Each of our Directors is committed to the effective and transparent stewardship of SaskEnergy, and their time and efforts are greatly appreciated. On behalf of the Board, thank you to SaskEnergy’s Executive team and employees throughout the province for their dedication to serving customers and providing essential energy for a prosperous Saskatchewan.
Susan Barber, K.C. Chair, SaskEnergy Board of Directors
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President’s Message
At SaskEnergy, it is our vision to provide critical energy to residents, businesses and industries as we support a prosperous Saskatchewan. As we meet the province’s demand for energy, we remain focused on our strategic imperatives — balancing our emissions reduction efforts with our ability to provide affordable natural gas service to our customers. In 2024-25, SaskEnergy made progress on our commitment to reducing our emissions from operations by 35 per cent by 2030, achieving more than double our year-over-year emissions reductions compared to the previous year. We also assisted our customers in reducing their own energy use, decreasing their end-use emissions and saving them money. Through our many energy efficiency programs, we provided $5 million in rebates to residential and commercial customers for energy-efficiency improvements to their homes and businesses, allowing them to reduce emissions by 18,900 tonnes of carbon dioxide equivalent.
At the same time, our strong operating and financial results, paired with ongoing efficiencies efforts, ensured that the average total natural gas bills for residential customers remain competitive, with our delivery rates among the lowest in Canada. The demand for natural gas in Saskatchewan remains significant, with no sign of slowing down. It continues to be the preferred energy option for homes and businesses, and our growing industrial customer base consistently turns to natural gas to fuel their business in our province. This past year, we invested in infrastructure and system expansion to strengthen our reliability and support customer growth. This included projects to serve new and expanding customer demand in enhanced oil recovery, potash production and power generation. SaskEnergy remains dedicated to strengthening Saskatchewan’s economy and investing in the communities we serve. In 2024-25, we purchased nearly $300 million in goods and services from local vendors, which accounted for 66 per cent of our procurement spending. In addition, $33.2 million in contracts were awarded to Saskatchewan businesses with Indigenous ownership or Indigenous workforce representation. Investing in our communities also means supporting the people of Saskatchewan through partnerships, sponsorships and community events. This year, we proudly celebrated the 30th anniversary of our Share the Warmth program. From humble beginnings as a sweater recycling project, Share the Warmth has grown into a grant program that provides funding to charitable organizations focused on offering warm clothing, shelter, food services or mental health support to help vulnerable citizens manage our cold prairie winters. In honour of this milestone, more than 100 organizations across the province received Share the Warmth grants of up to $1,000. As we look to the future, we must ensure that we are prepared for the evolving nature of our industry and the growing expectations of our customers and stakeholders. Each of our more than 1,200 employees has contributed to our success over the past year, and each has a valuable role to play in supporting SaskEnergy’s goals and vision in the coming years. Thank you to our employees for their dedication to serving the people of Saskatchewan, to our Executive team for their leadership, and to our Board of Directors for their governance and support throughout this past year.
Mark Guillet, K.C. President and Chief Executive Officer
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With a natural gas system that has served Saskatchewan for more than 70 years, SaskEnergy plays a critical role in meeting the current and future needs of the industries that support economic growth in the province. Affordability and reliability drive that demand, especially in the power production sector. SaskPower’s Great Plains Power Station near Moose Jaw officially went into service in December 2024. The 360-megawatt plant is served by a natural gas system expansion, including a 30.5-kilometre transmission line and new meter station, which increased capacity to support residential, commercial and industrial growth in the Moose Jaw area. With the Aspen Power Station under construction near Lanigan, natural gas continues to be an important part of the electricity generation mix, ensuring a reliable source of fuel when wind and solar power aren’t available. SaskEnergy is set to soon begin construction on a 90-kilometre transmission line to enhance reliability for our customers in the surrounding areas, increasing spare capacity for anticipated residential, commercial and industrial growth — including the new power station. Providing critical energy to support a prosperous Saskatchewan
Photo courtesy of SaskPower.
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Looking Back at 2024-25
3,422 new distribution customers added to our system
91% and 90% customer satisfaction rating for SaskEnergy and TransGas, respectively
A Top Employer for 2025 third consecutive year being recognized as one of Canada’s Top 100 Employers and one of Saskatchewan’s Top Employers
Enhancing customer experience • 65,600 downloads of mobile app — rating of 4.7/5 • Nearly 66,000 new online account registrations • 28,000 additional customers enrolled in paperless billing
18,000 tonnes carbon dioxide equivalent (CO 2 e) year-over-year reductions in greenhouse gas (GHG) emissions from operations
Investing in our communities supported 622 programs and events in 268 communities across Saskatchewan
21.5% reduction in our operations emissions from 2019 making strong progress on our roadmap to 35% by 2030 target
18,900 tonnes CO 2 e reduction in residential and commercial customer GHG emissions through natural gas conservation programs
$123 million dedicated to system reliability and integrity initiatives
Carbon monoxide safety distributed more than 1,000 carbon monoxide (CO) alarms across Saskatchewan through CO alarm program
Expanding renewable electricity
Signed Memorandum of Understanding with the First Nations Power Authority to explore energy security solutions for First Nations communities and increase Indigenous economic participation through cleaner energy initiatives
four new ground-mounted solar arrays installed this year (total of eight), now generating power for facilities in Asquith, Rosetown, Moosomin and Saskatoon
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Looking Back at 2024-25
Affordable energy average total natural gas bills for residential customers remain competitive, with delivery rates among the lowest in Canada
$5 million in rebates to Saskatchewan residential and commercial customers who made energy-efficiency improvements to their homes and businesses, including through the purchase of new high-efficiency natural gas appliances
1,420 income-qualified homeowners assisted with free furnace maintenance through the Tune-Up Assistance Program
Lowest recorded line hits causing an unplanned natural gas release — 129 line hits, a 16 per cent decrease over last year
$5.6 million in cost savings through more efficient procurement practices, including negotiation and collaboration with other Crown corporations and government agencies
$299.5 million in goods and services purchased from Saskatchewan vendors, making up 66 per cent of all corporate purchase orders
$33.2 million in contracts awarded to businesses with Indigenous ownership or providing Indigenous labour
Customer-driven growth Completed a 23-kilometre gas line expansion to bring natural gas service to Zagime Anishinabek First Nation. SaskEnergy worked closely with Zagime Anishinabek leadership, Elders and residents from the early planning stages through construction. The milestone project brought service to a 10,000 square foot greenhouse and seven homes — enabling year-round greenhouse operation and lowering heating costs for residents.
• 360 distribution customer projects • Strengthening system reliability and supporting customer growth with investment in transmission infrastructure and gas line expansions in the Regina area • Completed projects to support new and expanding customer operations in enhanced oil recovery, potash production and power generation
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There are a lot of choices to make when you’re looking at how you can build a more efficient home. It doesn’t have to be all or nothing, they all add up to savings. The Homes Beyond Code rebate from SaskEnergy, combined with the monthly energy savings we achieved because of it, allowed us to make our budget go further. Building to a higher standard gives me a lot of comfort. Since moving in, we’re definitely seeing a lot of savings — we’ve been really impressed! — Emma Orr, homeowner and Homes Beyond Code rebate recipient ” Supporting our customers in reducing emissions and energy costs
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SaskEnergy’s Homes Beyond Code rebate program is designed to encourage home builders and buyers to think long-term, making energy efficient choices beyond the minimum building code for new homes — building towards a more sustainable future for Saskatchewan. Making energy efficient choices when selecting building materials and appliances lowers energy use, reduces emissions and saves homeowners money over the long term. In the program’s first year, more than 170 applications were approved, and close to $310,000 in rebates were delivered. This resulted in an average annual reduction in energy use of 27 gigajoules (GJ) per home — saving 150 tonnes carbon dioxide equivalent (CO 2 e) through improved energy efficiency, which is equal to the average annual emissions from 30 homes.
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Committed to Customers and Communities
Our success is aligned with our vision of providing critical energy to support a prosperous Saskatchewan. This means delivering safe, reliable and affordable energy to our customers, while strengthening and investing in the province’s economy and in the communities we serve. We are committed to reducing emissions from our operations and assisting our customers in minimizing their own carbon footprints. We strive to build meaningful relationships with customers, communities, stakeholders and Indigenous groups as we support economic prosperity for future generations. And, as one of Canada’s Top 100 Employers, we provide a welcoming work environment for our employees, recognizing that a strong, representative workforce is key to our success. SaskEnergy’s commitment to corporate responsibility includes four focus areas — Prosperity, People, Environment and Governance.
Focus Area: Prosperity As we meet the demand for energy in Saskatchewan, SaskEnergy focuses on providing affordable and reliable natural gas service to our customers. We invest in the rural, urban and Indigenous communities where we live and work — through community grants and sponsorships, local procurement, public education, and engagement with stakeholder and Indigenous groups. Focus Area: People We take pride in our employees as they drive our success. SaskEnergy strives to provide a safe and engaging workplace where people want to build their careers. We are committed to maintaining a representative workforce, to recognizing the value of our employees, and investing in our team so they can meet customer needs and expectations. Focus Area: Environment As SaskEnergy provides safe and reliable energy to the province’s residents, businesses and industries, environmental responsibility remains a priority in our long-term corporate sustainability. Our environmental responsibility efforts are focused on reducing emissions from our operations, supporting customers in reducing end-use emissions, and protecting the local environment — including plant life, wildlife, native prairie, water bodies and species at risk.
Focus Area: Governance We are committed to high standards of governance that are consistent with regulatory expectations and evolving best practices. This is reflected in the way we conduct our business, serve our communities, and in our approach to managing risks.
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Financial and Operating Highlights
CONSOLIDATED FINANCIAL INFORMATION ($ millions)
2024-25
2023-24
2022-23
324 249
Delivery
304 236
313 235
Transportation and storage Net commodity sales realized Realized asset optimization margin Customer capital contributions
45 20 40
42 12 28
45 29 57
Total revenue and margins
678 126 226 141
622 119 206 140
679 109 198 146
Employee benefits
Operating and maintenance Depreciation and amortization
19
Saskatchewan taxes
19
18
(1)
(Recovery) loss on trade and other receivables
-
7
76
Net finance expenses
78
73
9
Other net losses Total expenses
5
2
596
567
553 126
Income before unrealized market value adjustments
82
55
8
Market value adjustments CONSOLIDATED NET INCOME
(34)
(66)
90 31
21 21
60 45
Dividends declared
3,834
Total assets
3,633
3,580
410
Cash provided by operating activities Cash used in investing activities Cash used in financing activities Property, plant and equipment additions
345
304
(355)
(269)
(225)
(73)
(62)
(75)
326
246
207
1,863 59/41 6.4%
Total net debt
1,826 59/41
1,802 59/41
Debt/Equity ratio
Rate of return on equity
4.4% 10.2%
OPERATING STATISTICS Distribution energy (petajoules) Residential/Farm
37 33
35 31
40 34
Commercial
197 267
Industrial
192 258
181 255
TOTAL
Transmission energy (petajoules) Domestic
394
389
381
5
Export
11
51
TOTAL
399
400
432
Number of customers Distribution
414,499
411,077
408,498
139
Transmission
135
141
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Financial and Operating Highlights
Operating Summary – Distribution
2024-25
2023-24
2022-23
6,755 2,557 5,571 (0.8%)
Sales in million cubic metres 1
6,513 2,565 5,103 8.7%
6,474 2,641 5,954 (6.8%)
Residential annual average usage (cubic metres)
Degree days 2
Percentage (colder) warmer than normal NATURAL GAS LINE (kilometres) SaskEnergy Incorporated
72,662
72,232
71,936
1 Retail, industrial and asset optimization. 2 A unit measuring the extent to which the temperature falls below 18° Celsius. Normal weather for the 12 months ending March 31, 2025 would have been 5,526 degree days.
Operating Summary – Transmission
2024-25
2023-24
2022-23
1.64
Peak day natural gas flows (petajoules)
1.70
1.63
Feb. 18
Date of peak day flow Storage cavern sites Storage caverns Storage field sites 1
Jan. 12
Dec. 22
5 2
6
6
18 2
19
19
2
2 3
3
NATURAL GAS LINE (kilometres) TransGas Limited Transmission
14,550 4
14,676
14,674
167 473
Gathering
167 473
167 473
Many Islands Pipe Lines (Canada) Limited
0 5
Bayhurst Gas Limited
22
22
TOTAL
15,190 4,5
15,338
15,336
SYSTEM COMPRESSION TransGas Limited stations
22
22
22
2
Many Islands Pipe Lines (Canada) Limited stations
2
2
17
Mobile compressor units
17
17
COMPRESSION HORSEPOWER TransGas Limited
73,068 11,760 84,828
73,068 3 11,760 84,828
76,068 11,760 87,828
Many Islands Pipe Lines (Canada) Limited
TOTAL
1 Includes Bayhurst Gas Limited and Bayhurst Gas Storage Inc. 2 Reduction due to the deactivation of Regina Storage Cavern site. 3 Reduction due to Totnes Field compression sale and abandonment. 4 Reduction due to planned abandonment of transmission lines. 5 Reduction due to planned abandonment of gathering lines for Totnes and Pierceland storage fields.
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Financial and Operating Highlights
Quarterly Financial and Operating Highlights 2024-25 CONSOLIDATED FINANCIAL INFORMATION ($ millions)
March 31, 2025
Q1
Q2
Q3
Q4
119 $
324 249
Delivery
$
61 $
48 $
96 $
Transportation and storage Net commodity sales realized Realized asset optimization margin Customer capital contributions
62
61
64 12
62 24 11 13
45 20 40
6 1 3
3 2
6
12
12
Total revenue and margins
133
126
190
229
678 126 226 141
Employee benefits
32 49 34
28 53 35
30 55 35
36 69 37
Operating and maintenance Depreciation and amortization
19
Saskatchewan taxes
5
6
4 2
4
(1)
(Recovery) loss on trade and other receivables
-
(2)
(1)
76
Net finance expenses
19
19
19
19
9
Other net losses Total expenses
-
2
-
7
139
141
145
171
596
CONSOLIDATED INCOME (LOSS) before unrealized market value adjustments
$ $
(6) $
(15) $
45 $
58 $ 16 $
82 31
Dividends declared
4 $
4 $
7 $
410
Cash provided by operating activities Cash used in investing activities
79
60
87
184
(355)
(36) (61)
(73)
(106)
(140)
(73)
Cash (used in) provided by financing activities Property, plant and equipment additions
13 71
18 98
(43)
326
32
125
OPERATING STATISTICS Distribution energy (petajoules) Residential/Farm
37 33
5 5
2 2
13 11 52 76
17 15 55 87
Commercial
197 267
Industrial
45 55
45 49
TOTAL
1% colder
Weather (compared to last 30 years) Transmission energy (petajoules) Domestic
4% warmer 50% warmer 1% warmer
9% colder
394
82
80
110
122
5
Export
-
1
1
3
TOTAL
82
81
111
125
399
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Financial and Operating Highlights
Quarterly Financial and Operating Highlights 2023-24 CONSOLIDATED FINANCIAL INFORMATION ($ millions)
March 31, 2024
Q1
Q2
Q3
Q4
114 $
304 236
Delivery
$
57 $
43 $
90 $
Transportation and storage Net commodity sales realized Realized asset optimization margin Customer capital contributions
59 15
58
60
59 14
42 12 28
5 5 7
8 4 7
1 4
2
10
Total revenue and margins
136
118
169
199
622 119 206 140
Employee benefits
28 48 35
26 47 35
28 53 35
37 58 35
Operating and maintenance Depreciation and amortization
19
Saskatchewan taxes
5
6 1
4
4 2
-
Loss (recovery) on trade and other receivables
-
(3)
78
Net finance expenses Other net losses (gains)
19
19
21
19
5
1
(2)
3
3
Total expenses
136
132
141
158
567
CONSOLIDATED INCOME (LOSS) before unrealized market value adjustments
$ $
- $ 4 $
(14) $
28 $
41 $
55 21
6 $
Dividends declared
6 $
5 $
345
Cash provided by operating activities Cash used in investing activities Cash used in financing activities Property, plant and equipment additions
84
58
67
136
(269)
(32) (33)
(79)
(85) (14)
(73) (15)
(62)
-
246
29
78
75
64
OPERATING STATISTICS Distribution energy (petajoules) Residential/Farm
35 31
5 5
2 2
11 10 49 70
17 14 53 84
Commercial
192 258
Industrial
45 55
45 49
TOTAL
13% warmer 33% warmer 15% warmer 1% warmer 9% warmer
Weather (compared to last 30 years) Transmission energy (petajoules) Domestic
389
85
82
104
118
11
Export
4
5
2
-
TOTAL
89
87
106
118
400
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Financial and Operating Highlights
Quarterly Year-Over-Year Analysis Operating results typically fluctuate from quarter to quarter due to variations in economic conditions and seasonal factors. Consequently, one quarter’s results may not accurately predict future performance. Natural gas consumption exhibits distinct seasonal patterns, as customers predominantly use natural gas for heating during the cold winter months, particularly in the third and fourth quarter. The quarterly year-over-year analysis, excluding market value adjustments, follows:
First Quarter (three months ending June 30)
first quarter continued through the second quarter of 2024. Additionally, operating and maintenance expenses increased due to inflationary increases to third-party transportation costs. Customer capital contributions grew year-over-year, reflecting increased activity among distribution utility customers compared to the second quarter of 2023. Third Quarter (three months ending December 31) Net income for the third quarter was $45 million, which is $17 million higher than $28 million in 2023. The year-over-year impacts highlighted in previous quarters persisted throughout the third quarter. In addition to these items, net commodity sales transitioned to being higher in 2024, resulting from weather conditions being 14 per cent colder than the previous year. The Corporation’s energy efficiency programs saw increased customer activity, partly due to three new programs introduced in 2024-25. Additionally, the Residential Equipment Replacement Rebate program experienced a surge in activity, with December seeing the second highest monthly customer participation since its introduction in 2019.
The Corporation reported a net loss of $6 million in June 2024, which is $6 million unfavourable compared to the income of $nil in 2023. The commodity rate adjustment to $3.20 per GJ effective October 1, 2023, lowered net commodity sales year-over-year. Employee benefit costs increased in 2024 due to a new Collective Bargaining Agreement effective February 2024, resulting in higher employee compensation. Full-time equivalent employees rose in 2024 as the Corporation filled previously vacant positions in construction and engineering to support growing customer demand for natural gas services, and in the digital, technology, and security areas to aid digital transformation. The Corporation’s unfavourable results were partially mitigated by higher delivery service revenues, driven by rate increases effective October 1, 2023, to address inflation. The Corporation continues its focus on operating efficiencies to help reduce rate pressure. Higher transportation and storage revenues resulted from increasing intra-provincial delivery service revenues, as customers executed higher contract demand to meet their operating requirements. Additionally, a two per cent average rate increase for transportation and storage services was implemented effective April 1, 2024, to address the expansion of the transmission system and meet the growing demand for natural gas services in Saskatchewan.
Fourth Quarter (three months ending March 31)
Net income for the fourth quarter of 2024-25 was $58 million, which is $17 million higher than the $41 million in the final quarter of fiscal 2023-24. Trends present in the first three quarters continued, with net commodity sales increasing further due to February 2025 being 23 per cent colder than normal and February 2024 being 15 per cent warmer than normal. The asset optimization margin also increased through the quarter, due to opportunities arising from the favourable natural gas price differential between Western Canada and other markets which allowed optimization of under-utilized transportation volumes at off peak periods.
Second Quarter (three months ending September 30)
The net loss for the second quarter of 2024 was $15 million, which is $1 million higher than the $14 million loss in 2023. Year over year impacts such as the lower commodity rate, warmer weather, higher employee benefit costs, higher delivery rates and higher demand and rates for transportation services highlighted in the
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While homes are running more efficiently thanks to high- efficiency appliances and improved building materials and practices, our customer base continues to grow and industry in the province is expanding, driving the need for more energy than ever before. SaskEnergy’s natural gas system is designed and built to support this growth, as well as the extreme weather conditions Saskatchewan winters can bring our way — so customers can rely on our service when they need it most. With the winter of 2024-25 six per cent colder than average, natural gas use in the province reached near- record levels. In February, the daily average for natural gas delivered was 1.42 petajoules/day, the third highest on record. It takes year-round planning and maintenance from teams across SaskEnergy to make sure that residential, commercial and industrial customers across the province have the gas they need when they need it. Even on the coldest days of the year. Energy that can be relied on, even during the most extreme weather
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Management’s Discussion and Analysis
Managements Discussion and Analysis Contents 23 Introduction 24 Strategic Scorecard Measures 32 Operating Environment
42 Outlook 43 Risk Management and Disclosure 47 Critical Accounting Policies and Estimates 48 Accounting Policy Changes
33 Consolidated Financial Results 40 Liquidity and Capital Resources 41 Capital Additions
Introduction The Management’s Discussion and Analysis (MD&A) highlights the key factors influencing SaskEnergy’s consolidated financial performance for the 12 months ending March 31, 2025. Based on financial and operating results, the MD&A provides insights into the Corporation’s past performance and future prospects from management’s perspective. The MD&A is presented as at May 22, 2025, and should be read alongside the Corporation’s audited consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (IFRS ® Accounting Standards). The MD&A contains forward-looking statements, which are subject to inherent uncertainties and risks, as described in the Risk Management and Disclosure section of the MD&A. These forward-looking statements reflect the Corporation’s best estimates and assumptions based on information available at the time. However, actual results and events may vary significantly from those included in, contemplated by, or implied by such statements. The Corporation’s financial results are subject to variation, especially given the volatility of natural gas prices. To compare financial performance from period
to period, the Corporation uses the following measures: income before unrealized market value adjustments; realized margin on commodity sales; and, realized margin on asset optimization sales. Each measure removes the impact of fair value adjustments on financial and derivative instruments and the revaluation of natural gas in storage to the lower of cost and net realizable value. Unrealized market value adjustments vary considerably with the market prices of natural gas, significantly impact the Corporation’s consolidated net income and may obscure other business factors that are important to understand the Corporation’s financial results. The measures mentioned above are non-IFRS measures, meaning they lack a standardized definition and may not be comparable to similar measures presented by other entities. The discussion of the Corporation’s results in the MD&A, set out on the following pages, is a comparison of the results for the 12 months ending March 31, 2025, to the results for the 12 months ending March 31, 2024, unless otherwise noted.
23
Management’s Discussion and Analysis
Strategic Scorecard Measures Natural gas plays a critical role in Saskatchewan’s energy and economic systems, and demand for it continues to grow. Safe, reliable and convenient service continue to be the hallmark of SaskEnergy’s natural gas delivery to the people, businesses and industries of Saskatchewan. These efforts are a critical part of core work and SaskEnergy has built a strong foundation to meet the increasing demand for energy in Saskatchewan. Recognizing its role in meeting Saskatchewan’s current and future needs, the ability to affordably provide energy is something that remains a focus for SaskEnergy. Moving forward, SaskEnergy will continue to meet the increasing energy needs of the province while focusing on financial stewardship, emissions reductions goals, and assisting customers with programs that lower their energy usage. These hallmarks are represented in our strategic imperatives, which are focused on balancing the challenges of affordability and environmental responsibility. SaskEnergy’s strategy is anchored by the Crown Sector Strategic Priorities, which provide direction and outline the shareholder’s expectations to allow for the alignment of goals. SaskEnergy utilizes a Balanced Scorecard
approach in organizing its strategic objectives and in measuring overall corporate performance. To support the achievement of its strategic imperatives, SaskEnergy has identified a mix of key objectives and outcomes among four quadrants — Organizational, Operational, Financial and Customer. To monitor success in each quadrant, a number of measures have been identified. Targets for each measure have been set to benchmark success in achieving SaskEnergy’s strategic goals. The final scorecard, including metrics and targets for the five-year planning horizon, is presented to SaskEnergy’s Board of Directors as part of the annual Corporate Plan approval. The CIC Board reviews the plan and confirms alignment with the Crown Sector Strategic Priorities prior to its approval. Progress toward these targets is monitored and reported throughout the year, allowing management to take corrective action to achieve the targets. The following discussion outlines the Corporation’s 2024-25 performance relative to its strategic scorecard targets for the 12 months ending March 31, 2025, which are further defined in the Glossary of Key Success Measures.
24
Management’s Discussion and Analysis
Community Aspiration
Environmental sustainability and economic prosperity for future generations of Saskatchewan.
Vision Providing critical energy to support a prosperous Saskatchewan.
Mission SaskEnergy delivers natural gas and energy solutions responsibly to the residents, businesses, and industries of Saskatchewan.
Strategic Imperatives
Affordability • Top quartile of the lowest delivery rates across the country
Environmental Responsibility • Reduce operational emissions by 35 per cent by 2030 • Support customers in reducing emissions by 170,000 T/CO 2 e by 2030
Quadrant
Strategic Action
• Organizational Culture • Safety • Workforce Development • Digital Transformation
We strive for organizational excellence with specific emphasis on:
Organizational
• Reliability • Operational Excellence • Environment and Energy Solutions • Customer Centric Service
We strive for efficiency with specific emphasis on:
Operational
Outcomes
• Responsible Debt Management • Regulated Return on Equity – Distribution • Regulated Return on Equity – Transmission & Storage • Residential and Business – ”SaskEnergy is the best energy value choice for me. Service is seamless and easy to access when I need it.” • Industrial – ”Natural gas service is reliable and affordable. It allows our company to operate efficiently and contribute to the economy.”
We ensure accountability and financial sustainability through:
Financial
Our success comes from serving:
Customer
25
Management’s Discussion and Analysis
Organizational The right organizational structure, technology and a talented workforce are crucial to SaskEnergy’s ability to continue delivering value to its customers. The Corporation’s organizational design creates the environment, and provides the resources, to achieve our imperatives and fulfill our long-term vision. The focus is on optimizing the organization today while building the teams and skills relevant for the future. Organizational Strategic Measures For the year ended March 31 2024 Actual 2025 Actual 2025 Target 2026 Forecast 2027 Forecast 2028 Forecast 2029 Forecast 2030 Forecast Safety Culture
100% Composite Score
100% Composite Score
100% Composite Score
100% Composite Score
100% Composite Score
100% Composite Score
Safety Index (new measure for 2024-25) Workforce Development
96.0%
N/A
Below Public Sector Average
Non-Survey Year
Public Sector Average
Non-Survey Year
Above Public Sector Average
Non-Survey Year
Above Public Sector Average
Non-Survey Year
Employee Experience
Vacancies Filled by Internal Applicants (new measure for 2024-25) Representative Workforce - Women in Management Roles Representative Workforce - Indigenous Workforce Representation
67.0%
N/A
52.0% 54.0% 56.0% 58.0% 60.0% 60.0%
37.0%
38.5%
40.0% 41.0% 42.0% 43.0% 44.0% 45.0%
13.0%
12.8%
13.5% 14.0% 14.5% 15.0% 15.5% 16.0%
Safety Culture SaskEnergy is committed to personal safety, the safety of its people and the safety of the public. Success is achieved when a strong safety culture instills safe practices, and the individual and collective decisions of employees and contractors bear safety in mind. Hazard identification, risk assessment and mitigation, and sharing learnings to promote awareness and continuous improvement are safety priorities throughout the organization and demonstrate the Corporation’s commitment to worker and public safety. In 2024-25, a new measure was introduced to assess SaskEnergy’s safety performance. The Safety Index is an equal weighted measure of the Corporation’s performance across two leading and two lagging safety indicators. The outcome in each of the four measures is granted a weighting of 25 per cent and the sum of the weighted results determines the overall index score on a 100-point scale. The index result for the year was slightly below target at 96 per cent, as the two lagging measures included in the index — Total Recordable
Injury Frequency (TRIF) and Preventable Vehicle Collisions (PVC) — were lower than target. Both measures targeted improvements year over year, however results remained steady and therefore did not meet the stretch goals included in the target. Performance in the leading indicators measuring management time in the field and hazard and near miss reporting were both strong, exceeding and equaling their respective targets. Workforce Development SaskEnergy takes pride in its people, recognizing employees drive the success of the organization. With more than 1,200 employees across Saskatchewan, the Corporation’s goal is to provide a workplace that offers challenging opportunities for growth and provides a safe, inclusive and engaging environment where all ideas are valued, respected and welcomed. SaskEnergy was named one of Canada’s Top 100 Employers for 2024, the third year in a row.
26
Management’s Discussion and Analysis
Employee Experience SaskEnergy recognizes that its employees are critical to achieving its objectives and is committed to the attraction, retention and engagement of employees. Employee experience is primarily dependent on a positive corporate culture, supportive managers/ supervisors, trust in leadership and opportunities to perform meaningful work. SaskEnergy conducts an employee engagement survey every second year, with the most recent iteration completed late in 2024-25. The survey gauges SaskEnergy’s employee perceptions of various workplace dimensions with results compared against data from other public sector companies in Canada. Compared to the 2022-23 survey scores, results improved in all 19 work dimensions measured, with a nearly double digit increase in a number of dimensions. This included an eight per cent improvement in Overall Engagement. However, the score remained one per cent shy of the public sector benchmark which was its target. Action plans to focus on improvement of the organization’s key drivers of engagement will be developed as SaskEnergy strives to achieve its future goals. Vacancies Filled by Internal Applicants An additional new scorecard measure was introduced in 2024-25 to evaluate the number of vacancies filled by existing in-scope and out-of-scope employees. This is a benchmark of mobility and career opportunities inside the organization. Hiring internally supports employee retention and engagement, as internal candidates feel valued and motivated by the opportunity to grow and advance within the Corporation. Hiring internally also reduces time and costs given existing employees’ knowledge and experience, including their familiarity with people and processes. With 67 per cent of vacancies filled by internal applicants, the organization far exceeded its target of 52 per cent of internal hires, an indication of the strength of past development efforts.
Representative Workforce SaskEnergy’s goal is to continue to foster an inclusive work environment rooted in the belief that, through varying perspectives, better decisions are made, and better outcomes are achieved. The communities that SaskEnergy serve include people from diverse backgrounds, and the Corporation aspires to obtain a workforce reflective of that same diversity. Women in Management Roles was reported as 37 per cent in 2024-25, a decline from the 2023-24 results of 38.5 per cent and the 2024-25 target of 40 per cent. The percentage of Indigenous employees as a share of SaskEnergy’s workforce increased slightly to 13 per cent in the year, however it did not rise enough to meet its target of 13.5 per cent. The Saskatchewan Human Rights Commission’s recommended target is 15.2 per cent provincially, but SaskEnergy also recognizes that this demographic is trending higher in the province and as such is striving to meet a long-term target that exceeds it. SaskEnergy aims to provide opportunities to qualified people, and is committed to the attraction, retention and engagement of its employees. Maintaining a representative workforce will continue to be a priority as the recruiters and hiring managers, with support from all levels of the organization, remain committed to increasing diversity and inclusiveness in the workforce.
27
Management’s Discussion and Analysis
Operational SaskEnergy strives to pair effective processes with optimized resources to meet customer expectations for affordable, reliable service and deliver on its sustainability commitments. Operational Strategic Measures For the year ended March 31 2024 Actual 2025 Actual 2025 Target 2026 Forecast 2027 Forecast 2028 Forecast 2029 Forecast 2030 Forecast
Operational Excellence Distribution - Operating and Maintenance Costs per Customer vs. Saskatchewan Consumer Price Index (CPI) (% Growth) (new measure for 2024-25) Transmission - Operating and Maintenance Costs per Asset Value vs. Saskatchewan Consumer Price Index (% Growth) (new measure for 2024-25) Residential Delivery Rates Reliability Unplanned Distribution Customer Outage Events Greener Energy Provider Cumulative GHG Emissions Reduction Relative to 2019 Baseline (Tonnes CO 2 e) Customer GHG Savings (Tonnes CO 2 e/year) from Natural Gas Conservation Programs
Change equal to or below Sask. CPI Growth Change equal to or below Sask. CPI Growth
Change equal to or below Sask. CPI
Change equal to or below Sask. CPI
Above Sask. CPI Growth
2.5% above Sask. CPI
2.0% above Sask. CPI
1.5% above Sask. CPI
N/A
Change equal to or below Sask. CPI
Change equal to or below Sask. CPI
Change equal to or below Sask. CPI
Change equal to or below Sask. CPI
Change equal to or below Sask. CPI
Below Sask. CPI Growth
N/A
Competitive Competitive
Competitive Competitive Competitive Competitive Competitive Competitive
18
31
36
35
35
34
33
32
2.5% reduction (19.5% cumulative)
2.5% reduction
3.0% reduction
2.5% reduction
2.5% reduction
2.5% reduction
21.5%
17.0%
18,900
19,200
22,000 23,000 24,000 26,000 26,000 26,000
Operational Excellence Operational excellence includes standardization, simplicity and ease of use in the delivery of services. It is about providing services in a way that reduces costs, thereby keeping rates reasonable, but also delivering an enhanced customer experience. Processes are viewed through the lens of customer value, and resources are allocated to those functions that support it. The organization updated its measures related to Operating and Maintenance spending in 2024-25 to transition from static cost targets for its Distribution and Transmission businesses to ones that compare the changes in spending to the rate of provincial inflation. For the Distribution business the result did not achieve target, as the average cost of serving customers rose more than the rate of inflation. Positive results from
a number of efficiency initiatives were achieved in the year, however expenses rose driven by increased focus on technology improvements, greater investment in supporting customer energy efficiency, and increased staffing requirements to maintain safe, reliable and convenient service for customers. Results in the Transmission business were positive, as the increase in Operating and Maintenance Costs per Book Value of Assets Managed was less than the provincial inflation. Management of operating expenses has been effectively matched with the overall system growth, driven by increased demands from industrial customers in recent years.
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