Management’s Discussion and Analysis
Regulatory Intensification Increasing regulatory requirements may make an industry or company stronger in the long run, but may be counterproductive to efficiency and service quality in the short-term. A number of new regulations impacting the Corporation’s operations have been introduced in recent years, and the potential for additional items is always a possibility. Greater transparency requirements, enhanced protection for stakeholders and the environment, as well as additional oversight for the industry are potential reasons behind the focus on regulation. Increasing regulation creates additional sensitivity to a company’s reputational risk if non-compliant. The Corporation is confident in its adaptability to the evolving regulatory environment, with continued efforts put toward improving efficiency and enhancing service. Focusing on data management through the Corporation’s Unified Management System enhances the use of data to make more informed investment decisions plus improves the ability to anticipate customer needs. Natural Gas Line, Facility or Operational Failure Natural gas line, facility or operational failure could disrupt the effective operation of SaskEnergy’s infrastructure, and have potentially negative effects on employee and public safety, the environment and customers. Operational hazards include severe weather conditions, fire, human error, mechanical failures, third- party gas line encroachment, hazardous materials, and acts of civil disobedience and sabotage. The occurrence of any of these events, many of which are not within control of the Corporation, could increase operating costs or reduce revenues. Some of the primary processes used to mitigate the Corporation’s facility and operational risks include system integrity programs, public awareness and safety programs, employee and operator training, as well as environmental policies and procedures. The financial impacts of these risks are also mitigated, where possible and appropriate, through insurance.
Cyber and Physical Security SaskEnergy relies on information technology
infrastructure in its business and physical system operations. A successful cyber-attack could have a cascading effect on the Corporation, including a loss or misuse of critical data and information leading to asset or revenue losses, damage to reputation and personal data breaches, which leads to further complications such as regulatory fines, litigation and significant costs of remediation. Cyber-attacks can disrupt and cause considerable financial and reputational damage to even the most resilient organization. The Corporation’s cyber security program comprises technologies, processes and controls that are designed to protect systems, networks and data from cyber-attacks. Effective cyber security reduces the risk of cyber-attacks, and protects corporate data and personal information from the unauthorized exploitation of systems, networks and technologies managed by internal and external parties. As a provincial operator of critical energy infrastructure, SaskEnergy operates a number of both manned and unmanned locations. Physical security measures are designed to deny unauthorized access to facilities, equipment and resources, and to protect personnel and property from damage or harm. This includes Strategic initiatives undertaken to mitigate cyber, physical and operational risks include business continuity and disaster recovery plans, information technology security processes and a security threat response plan. Interest Groups Public objection to industry infrastructure development from a cultural, safety, environmental, or societal perspective exposes SaskEnergy to the risk of higher costs, delays or even project cancellations. In recent years, the ability of landowners and interest groups to make claims and oppose projects in regulatory and legal forums has increased. This “not in my backyard” philosophy could impact the Corporation’s ability not only to develop new facilities, through delays and additional costs, but also to operate existing facilities, and could potentially affect the integrity and reliability of the natural gas system. Through various programs and strategies, including stakeholder engagement, Indigenous consultation, environmental assessments and public awareness, SaskEnergy works with landowners and other interest groups to identify and develop appropriate responses to concerns regarding expansion and development of infrastructure. protection from fire, flood, natural disasters, burglary, theft, vandalism and terrorism.
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