Management’s Discussion and Analysis
Revaluation of Natural Gas in Storage At each reporting period, the Corporation measures the net realizable value of natural gas in storage held for asset optimization transactions based on forward market prices and anticipated delivery dates. The carrying amount of natural gas in storage is adjusted to reflect the lower of weighted average cost and net realizable value. Through much of 2019-20, the Corporation was able to purchase lower priced natural gas and
inject it into storage, which reduced the average cost of natural gas in storage. Additionally, higher forward market prices also positively affected net realizable value. Consequently, the net realizable value of asset optimization natural gas in storage was $7 million below cost at March 31, 2020, which is a $7 million increase from the revaluation adjustment at March 31, 2019.
Revenue Delivery revenue, transportation and storage revenue, customer capital contributions and other revenue, as reported in the consolidated financial statements, were as follows:
March 31, 2020
March 31, 2019
(millions)
Change
$
284 $
289 $
(5)
Delivery revenue
187
163
24
Transportation and storage revenue Customer capital contributions
36
29
7
-
4
(4) 22
Other revenue
$
507 $
485 $
Revenue
Delivery Revenue Delivery revenue is driven by the number of customers and the amount of natural gas they consume. Weather is the external factor that most affects delivery revenue, as residential and commercial customers consume natural gas primarily as heating fuel. Delivery revenue was $284 million for the 12 months ending March 31, 2020, which is $5 million lower than the 12-month period ending March 31, 2019. The weather in 2019-20 was two per cent colder than normal, and eight per cent warmer than 2018-19. The effects of the warmer weather reduced delivery revenue by $15 million compared to the prior year. The Corporation added 2,459 customers through the 12 months of 2019-20, which was lower than the 2,775 customers added during the previous fiscal period. The addition of new customers contributed an additional $1 million of revenue in 2019-20.
DELIVERY REVENUE
$350
7000
$300
6000
$250
5000
$200
4000
$150
3000
2000
$100
1000
$50
0
$0
2015-16 2016-17 2017-18 2018-19 2019-20
Delivery Revenue
Heating Degree Days
p.31
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