Management’s Discussion and Analysis
Customer Capital Contributions The Corporation receives capital contributions from customers to partially offset the cost of constructing facilities to connect them to the transmission and distribution systems. Generally, contributions related to transmission system projects tend to be larger but less frequent than contributions related to the distribution system. The volume and magnitude of customer contribution revenue can vary significantly period-over-period as various factors influence their receipt and recognition as revenue. Customer capital contribution revenue for the 12 months ending March 31, 2020 was $7 million above 2018-19 due to higher transmission customer connections year-over-year.
CUSTOMER CONTRIBUTION REVENUE
$70
$60
$50
$40
$30
$20
$10
$0
2015-16
2016-17
2017-18
2018-19
2019-20
Other Expenses SaskEnergy’s expenses are driven to a large degree by its investment in its transmission, distribution and storage systems. Depreciation expense, net finance expense and Saskatchewan taxes are directly tied to the investment in facilities. As the level of investment in facilities increases, these expenses also increase. Employee benefit costs and operating and maintenance costs are also driven by the investment in assets, although less directly. As the number of customers increases, and infrastructure to serve those customers grows, the
costs to operate and maintain the system increases. These expenses increase primarily because the amount of work to service and maintain the natural gas system grows as the kilometres of gas lines, number of service connections, and amount of compression equipment increases. Additional regulatory requirements and changing public perceptions have resulted in accelerated prevention, detection and mitigation initiatives, adding pressure to transmission, distribution and storage rates.
Other expenses, net finance expenses and other losses (gains), as reported in the consolidated financial statements, were as follows:
March 31, 2020
March 31, 2019
(millions)
Change
$
96
Employee benefits
$
89 $
(7)
164 109
Operating and maintenance
161
(3)
99 15
(10)
Depreciation and amortization
16
(1) (3)
Saskatchewan taxes
5
Impairment loss on trade and other receivables
2
$ $ $
390 $
366 $ 52 $ (11) $
(24)
55 $ 21 $
(3)
Net finance expenses Other losses (gains)
(32)
p.33
Made with FlippingBook Ebook Creator