Management’s Discussion and Analysis
providing safe and reliable service to customers. In alignment with the Crown Sector Strategic Priorities, the Corporation continues to focus on providing the province’s growing population with efficient and timely access to natural gas service while keeping rates competitive.
A 3.4 per cent rate increase effective April 1, 2019 contributed approximately $9 million of additional delivery revenue compared to the prior year, which partially offset the impact of warmer weather. Delivery rate increases are implemented to address growing capital and operating costs incurred to continue
Transportation and Storage Revenue The Corporation generates transportation revenue by receiving gas from customers at various receipt points in Saskatchewan and Alberta, and delivering natural gas to customers at various delivery points in the province. The transportation toll structure consists of a receipt service charge that customers pay when they put gas on to the natural gas transportation system, and a delivery service charge, which customers pay when they take delivery off of the natural gas transportation system. For receipt and delivery services, the Corporation offers both firm and interruptible transportation. Under a firm service contract, the customer has a right to deliver or receive a specified quantity of gas on each day of the contract. With a firm contract, customers pay for the amount of capacity they have contracted for whether they use it or not. Under an interruptible contract, customers may deliver or receive gas only when there is available capacity on the system and pay receipt and delivery tolls when they deliver or receive gas. Integral to the Corporation’s transmission system are several strategically located natural gas storage sites, which have the capacity to provide operational flexibility along with a reliable and competitive natural gas storage service. Transportation and storage revenue was $187 million for the 12 months ending March 31, 2020, $24 million higher than in 2018-19. Industrial customer and power generation related load growth continued to increase contracted demand for natural gas within the province and drove the $24 million increase in transportation revenue compared to the prior year.
TRANSPORTATION & STORAGE REVENUE
450
$180 $200
400
$160
350
$100 $120 $140
300
250
200
$60 $80
150
100
$40
50
$20
0
$0
2015-16 2016-17 2017-18 2018-19 2019-20
Transportation & Storage Revenue
Transmission Volumes
Storage revenue is comparable with the previous year as the decline in contracted demand for storage services has stabilized. The apparent abundance of natural gas, coupled with small or even negative differentials between current and forward gas prices, limits the demand for natural gas storage to those customers with relatively low load factors who use the service to mitigate receipt transportation charges.
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