Management’s Discussion and Analysis
Other Expenses SaskEnergy’s expenses are significantly driven by its investment in the Corporation’s transmission, distribution and storage systems. Depreciation and amortization expenses, net finance expense and Saskatchewan taxes are directly tied to the investment in these 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, as well as decommissioning activities at the asset’s end of life — 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.
(millions)
March 31, 2025
March 31, 2024
Change
$
126 $
Employee benefits
119 $
7
226 141
Operating and maintenance Depreciation and amortization
206 140
20
1
19
Saskatchewan taxes
19
-
(1)
Recovery on trade and other receivables
-
(1)
$ $ $
511 $
484 $
27
76 $
Net finance expenses
78 $
(2)
9 $
Other net losses
5 $
4
Employee Benefits Employee benefit costs were $7 million higher in 2025 than in 2024 as the new Collective Bargaining Agreement was effective February 2024, resulting in increased employee compensation in 2025. In addition, full-time equivalents are trending higher, as the Corporation strategically filled previously vacant construction and engineering positions to support growing customer demand for natural gas service. Vacant digital and technology positions were also filled to facilitate the Corporation’s commitment to innovation and digital transformation enabled by technology. These were partially offset by higher labour costs allocated to capital projects through 2024-25 compared to 2023-24, which decreased employee benefit expenses.
Operating and Maintenance Operating and maintenance expenses increased by $20 million compared to the 2023-24 fiscal year as third- party transportation costs rose along with increased expenses to support digital technology programs, customer facility modifications and customer energy efficiency programs. Inflation has impacted every part of operations, and the Corporation’s third-party transportation costs were an area of notable impact. Third-party transportation is utilized to serve customer needs when it is more cost effective than developing new assets for intra-provincial transportation. It is also utilized to support Alberta receipt services to facilitate imports of customer gas from Alberta receipt points. Third-party transportation service providers increased their transportation rates, which played a significant role in the increased operating expenses this year.
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