Management’s Discussion and Analysis
BUSINESS & TECHNOLOGY OPTIMIZATION Optimization supports better workflow, decision-making and enhanced customer and employee experience. Trusted information is securely available to staff, customers and stakeholders through integrated
business processes and systems. Investments increase effectiveness and/or create internal efficiencies that enable SaskEnergy to create value.
March 31, 2019 Actual
March 31, 2020 Actual
March 31, 2020 Target
Strategic Measure
Efficient Operations SaskEnergy continues to focus on efficiency while maintaining a sustainable level of spending to achieve strategic goals and high customer service levels. In alignment with the Crown Sector Priority of financial stability, and a continued emphasis on operational efficiency, SaskEnergy is committed to the cost-effective delivery of natural gas services to its customers. In 2019-20, the Corporation realized approximately $3.3 million in efficiency and process improvement savings. Process improvement initiatives related to construction and procurement activities were the key drivers for the savings. INDUSTRY OVERVIEW SaskEnergy monitors a number of important factors that could influence financial performance. Energy Complex Volatility The year ended with the entire global energy complex in a state of uncertainty. Pandemic-related demand destruction combined with a geo-political supply glut has resulted in crude oil prices falling by more than 60 per cent. With producers significantly reducing capital spending and consumers facing an unknown period Efficient Operations Distribution - Operation, Maintenance and Administration Costs per Customer Transmission - Operation, Maintenance and Administration Costs per Book Value of Assets Managed
324 $
330
$
$
342
6.6%
6.3%
6.7%
The metric for distribution operations was better than target. Customer growth was lower than planned but was offset by savings in efficiency initiatives, vacancy and overtime management. The transmission operations efficiency metric was slightly better than target, resulting from ongoing resource management efforts. Technical architecture development is needed to support business solutions so that high quality service delivery is both adaptable and sustainable. Strategies are being developed to streamline processes and use technology to create efficiencies for customers and employees. of reduced demand, pipeline companies and processors face uncertainty upstream and downstream. With global storage levels and US production at all-time highs, the fall in natural gas prices preceded the broader global slow down. The fall in oil prices may result in higher natural gas prices as the gas associated with oil production may come off the market if oil producers shut-in production.
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