ACHIEVING GROWTH SaskEnergy continues to build on the foundation of its core businesses of transmission, distribution and storage services to support a growing residential, commercial and industrial customer base. In addition, the Corporation seeks new opportunities to facilitate provincial economic growth through partnerships and technology developments. The measures within the mandate of Achieving Growth represent the Corporation’s commitment to facilitating growth in Saskatchewan.
March 31, 2021 Target
March 31, 2020 Target
March 31, 2019 Target
March 31, 2018 Target
March 31, 2017 Target
March 31, 2017 Actual
March 31, 2016 Actual
Strategic Measure
Business Growth Investment
2.9%
Core Growth – SaskEnergy and TransGas Revenue Growth
3.8%
3.3%
3.4%
3.4%
3.5%
3.5%
Diversified Non-Core Business
1%
Return on Non-Core Assets
N/A
4.4%
9.1%
10.8%
11.1%
11.1%
$5.9
Total Capital Investment (millions)
$15.3
$13.6
$4.4
$4.5
$4.4
$4.4
2.4%
Percentage of Third-Party Capital Investment
25%
1%
1%
1%
1%
1%
31%
22%
31%
36%
36%
37%
37%
Associated Gas Capture as a Percentage of 2014 Saskatchewan Sourced Volume
Business Growth Investment The Core Growth measure recognizes the fundamental importance of core revenue growth in the Corporation’s two utilities as a key indicator of the continued success of the business. In prior years, it was the growth in the provincial economy that directly contributed to a larger distribution customer base and greater demand for natural gas from industrial facilities. In 2016-17, the distribution utility increased its active customer base by 4,000 customers and the transmission utility increased provincial load by seven per cent. The slowdown in provincial growth has impacted the rate of growth in the Corporation’s utility businesses as reflected in the result for the Core Growth metric for 2016-17. Diversified Non-Core Business The Non-Core Business measures reflect the value of developing new revenue streams within the commodity and unregulated business environment. Efforts in this area create a wider revenue base and strongly align SaskEnergy with the Crown Sector Priority of forming partnerships and joint ventures with the private sector to facilitate growth in the Saskatchewan economy. The Return on Non-Core Assets metric was introduced in 2016-17 and tracks the return earned by the Corporation from its investment in non-core assets. Given the current low natural gas price environment and a general lack of optimism in forward pricing of the natural gas commodity, the Corporation recorded write-downs in the fourth quarter on some of its natural gas storage assets in Bayhurst. There was also a write-down on certain waste heat recovery assets given the ongoing operational issues related to the reliability of the heat exchanger technology. Given these write-downs, the return on non-core assets was lower than anticipated. SaskEnergy endeavors to work with private sector partners to grow its non-core business. However, the economic climate has caused those in the industry to proceed cautiously, resulting in very little activity in the sector in 2016-17. The results for the metric related to third-party capital investment are a reflection of this environment. The slowdown in the oil industry also impacted plans for liquefied natural gas (LNG) and compressed natural gas (CNG) initiatives. The metric for Associated Gas Capture as a Percentage of Saskatchewan Sourced Volume was new for 2016-17. This metric was designed to reflect the efforts being undertaken on flare gas capture to satisfy some of the Saskatchewan demand for natural gas while reducing greenhouse gas emissions. Further upside comes from the opportunity to mitigate third-party transport costs to import the supply from Alberta. Although progress is being made on projects to acquire associated gas and convert it into CNG or LNG at the wellhead, the low price environment for natural gas is causing third-party investors to proceed slowly and with caution.
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2016-17 ANNUAL REPORT SASKENERGY
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