Management’s Discussion and Analysis
Capital Additions
(millions)
March 31, 2025
March 31, 2024
Change
$
128 $
Customer growth System expansion Risk management
55 $
73
48 99 52 11
52 94 46 10
(4)
5 6 1
Reliability of natural gas service
Business and technology optimization
$
338 $
Capital additions
257 $
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SaskEnergy is committed to providing solutions and services that benefit customers and Saskatchewan, leveraging the Corporation’s expertise and Saskatchewan’s private sector. The Corporation deploys its strategic capital to fund customer growth and create new business capabilities. Fulfilling customer demand for additional natural gas capacity is a core responsibility for the Corporation and demand is forecasted to increase as a result of the growing industrial and power generation sectors. Key focus areas include maintaining the safety and reliability of the natural gas transmission and distribution systems, enhancing customer experience, and supporting the emissions reduction strategy. Capital additions through the twelve months ended March 31, 2025, were $81 million higher than the investment made in 2024, primarily due to customers increasing demand for natural gas services and the Corporation focusing investment on the purchase of equipment, system improvements and technological advancements. Investment in customer growth projects of $128 million was $73 million higher than 2023-24 investment levels, as the Corporation continues to focus on investments that connect power generation and potash mining customers to the transmission system and urban and rural customers to the distribution systems. System expansion capital projects provide incremental capacity for the transmission and distribution systems, through the installation of new or expanded gas lines or facility assets, thus enabling demand growth and the addition of new customers. Investments in system expansion projects are slightly below prior year and focused on compressor station renewal and expansion projects along with distribution system infrastructure reinforcement projects in the Regina area, which will increase available delivery capacity in east Regina and position the Corporation to meet new customer demand. Capital investment in safety and system integrity continues to be a top priority. SaskEnergy takes a long-term view and uses a risk-based approach to determine project priorities and the appropriate level
of total integrity spending. Industry comparable data also provides reference, as the industry as a whole has progressively elevated safety and system integrity capital investment over the last number of years. 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 expenditures for 2024-25 have slightly increased compared to the previous year, with a focus on system improvement projects, cathodic protection, as well as measurement and service replacement initiatives. SaskEnergy’s transmission and distribution infrastructure necessitates regular monitoring and inspection, enhancements and modifications, as well as replacements, to ensure service reliability for customers, prevent public safety incidents, and comply with increasing regulatory requirements. Recent years have also seen an increase in the cyber threat landscape and as a critical infrastructure operator, the Corporation has developed a robust Enterprise Security program that addresses both cyber and physical risks. This program requires continual improvement to mitigate risks and ensure secure systems for reliable operations. Reliability of natural gas service spending slightly increased in 2024-25, as the Corporation focuses investment on purchasing construction equipment, system improvement work on town border stations, compressor stations and network improvements. Business and technology optimization ensures that every investment in information technology, every resource allocated and every application in development or in production, meets the Corporation’s business goals. The 2024-25 investment in business and technology optimization is comparable to 2023-24 expenditures and focused on upgrading the customer information system and work management system, which centers on work management business processes, foundational core systems integrations and execution of ongoing enhancements.
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