Revenue The delivery revenue, transportation and storage revenue, customer capital contributions and other revenue, as reported in the consolidated financial statements, were as follows:
15 Months
3 Months
12 Months
12 Months
Ended March
Ended March
Ended
Ended
December
December 31, 2014 2
31, 2016 1
31, 2016
31, 2015
Change
(millions)
Delivery revenue
$ 232
$ (17)
$ 289
$ 74
$ 215
Transportation and storage revenue
98
21
151
32
119
Customer capital contributions
33
4
61
24
37
Other revenue
16
(4)
14
2
12
$ 379
$ 4
$ 515
$ 132
$ 383
1 See note under table of Consolidated net income (loss) on page 31. 2 Certain comparative amounts have been reclassified to conform with the current fiscal year’s presentation.
Delivery Revenue Delivery Revenue is driven by the number of customers and how much natural gas they consume. As residential and commercial customers consume natural gas primarily as heating fuel, weather is the external factor that most affects delivery revenue. Based on weather data for the past 30 years, the quarters ended March, June and December 2015 were one per cent, five per cent and 13 per cent warmer than normal while the same three quarters in 2014 were 17 per cent colder, 21 per cent colder and two per cent warmer than normal. Delivery revenue of $215 million for the 12 months ended December 31, 2015 was $17 million below 2014. This was partially offset by the full year effect of a delivery rate increase effective September 1, 2014, a growing residential, commercial and industrial customer base, plus an increase in industrial customer load.
Delivery Revenue
Distribution system growth, measured by the number of customers added, contributes not only to increased revenue but also to operating cost pressures. The Corporation added 5,090 customers through the 12 months of 2015, which as expected was below the more than 7,300 customers added in each of the past three years. The cost pressure from serving these additional customers, combined with increased spending on safety and integrity programs were the primary drivers behind increases to SaskEnergy’s delivery service rates effective September 1, 2013, September 1, 2014 and also January 1, 2016. The Corporation continues to focus on efficiency initiatives to help offset the increasing rate pressures.
$250
6,400
6,100
$200
5,800
$150
5,500
$100
5,200
$50
4,900
$0
4,600
Delivery revenue of $74 million for the three months ended March 31, 2016 was below expectation as the 14 per cent warmer than normal weather through the three month winter heating season decreased heating load. The 4.5 per cent rate increase effective January 1, 2016 has partially offset the adverse impact of the warmer-than-normal winter. Transportation and Storage Revenue The Corporation generates transportation revenue by taking delivery of 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 in which customers pay when they put gas onto the pipeline transportation system, and a delivery service in which customers pay a separate toll when they take delivery off of the pipeline transportation system. When gas has been delivered to the system by customers, it is considered to be part of the TransGas Energy Pool (TEP) until it is delivered to the end-use customer. For its receipt and delivery service, 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. Under an interruptible contract, the customer may deliver or receive gas only when there is available capacity on the system. With a firm contract, customers pay for the amount of capacity they have contracted for whether they use the capacity or not. Under an interruptible contract, customers only pay receipt and delivery tolls when they deliver or receive gas. 2015 2014 2013 2012 2011 Delivery Heating Degree Days
35
2015-16 ANNUAL REPORT SASKENERGY
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