ACHIEVING GROWTH Achieving Growth includes all areas of our business — continuing to build on the foundation of the core business of transmission, distribution and storage service to support a growing residential, commercial and industrial customer base as well as finding new opportunities through partnerships and technology developments. The measures within Achieving Growth represent the Corporation’s commitment to facilitating growth in Saskatchewan.
Achieving Growth
March 31, 2021 Target
March 31, 2016 Actual 1
March 31, 2020 Target
December 31, 2015 Target
March 31, 2019 Target
December 31, 2015 Actual
March 31, 2018 Target
December 31, 2014 Actual
March 31, 2017 Target
Strategic Measure
Business Growth Investment
4.3%
4.3%
2.2%
3.8%
3.3%
3.3%
3.4%
3.4%
3.5%
Core Growth – SaskEnergy and TransGas Revenue Growth
Diversified Non-Core Business
9.3%
Return on Equity 2
10.6%
19.6
12.3%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
4.4%
6.2%
9.1% 10.8% 11.1%
Return on Non-Core Assets 2
$15.0
Total Capital Investment (millions) Percentage of Third-Party Capital Investment Associated Gas Capture as a Percentage of 2014 Saskatchewan Sourced Volume 3
$87.0
$45.6
$15.3
$13.6
$52.1
$4.4
$4.5
$4.4
25%
87%
66%
25%
1%
79%
1%
1%
1%
N/A
N/A
N/A
22%
31%
35%
36%
36%
37%
$24.7
Net Revenue (millions)
$22.1
$30.5
$29.9
N/A
N/A
N/A
N/A
N/A
1 For the 15 months ended March 31, 2016 2 Return on Equity has been discontinued and is replaced by the Return on Non-Core Assets Metric starting in 2016-17 3 This is a new metric implemented January 1, 2016
Business Growth Investment The Business Growth Investment 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 this regard, provincial growth has directly contributed to an increased distribution customer base and increased demand for natural gas from industrial facilities. In 2015, the Distribution Utility increased its active customer base by 5,090 customers and transmission load increased by 6.4 per cent. This provincial growth has fueled the growth of the Corporation’s utility businesses and favourably impacted the result for the Core Growth metric for 2015. Diversified Non-Core Business The Diversified 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 Equity result for the period is measured before the impacts of market value adjustments on net income. The expectations for this metric included several non-core projects that did not proceed during the year due to the low natural gas price environment. This is negatively impacting the Return on Equity result for 2015. The Return on Equity and Net Revenue metrics have been discontinued and are replaced by the Return on Non-Core Assets metric starting in 2016-17, which tracks the return earned by the Corporation from its investment in non-core assets. The results for the metric related to third-party capital investment are also reflective of the low price environment for natural gas. A sustained low gas price makes natural gas projects uneconomical as investors see limited up-side potential in these projects given the current pricing environment. The slowdown in the oil industry also impacted plans for another Saskatchewan straddle plant, a potential processing plant and additional customers switching from diesel fuel to natural gas to power drilling rigs.
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2015-16 ANNUAL REPORT SASKENERGY
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