2015-16 SaskEnergy Annual Report

Integrated Information Systems In today’s increased use of information systems, the Corporation is at risk both internally and externally. The organization is at risk (phishing, whaling attempts, spam, malware, etc.) from external parties that may threaten the successful operation of our information systems. These threats are addressed through a number of security processes and controls. Internally, the Corporation’s information systems have become increasingly integrated throughout operations, increasing the risk that a failure in one system could lead to a failure in another system, impacting the Corporation’s ability to meet operational requirements. The Corporation mitigates this risk through its project prioritization process and project management methodology related to system development. The Corporation also has up-to-date business continuity and disaster recovery plans for critical operations as well as information technology processes. Employer/Employee Relationship The Corporation’s relationship with its employees is important to the continued safe operation of its transmission, storage and distribution systems. Possible consequences of a deteriorating relationship with employees include loss of productivity and labour disruption. SaskEnergy maintains open dialogue with its union through joint union-management committees, the collective bargaining process, a focus on safety and providing an environment that offers employees a healthy work/life balance. Emerging Strategic Business Landscape Recent transformations in the natural gas business landscape present both uncertainties and opportunities that affect SaskEnergy’s short and long-term strategy. The Corporation develops integrated strategic risk mitigation through long-term strategic planning, the customer dialogue process and relationships with industry associations. The Corporation’s strategic plans identify and monitor emerging risks, advances in technology and changing customer expectations. There is less reliance on historical data or the status quo and increasing focus on strategic risk factors that may deter the Corporation from its ability to realize strategic objectives. Business Plan Execution Successfully implementing business plan targets is heavily dependent on managing efficiency, productivity and cost pressures. The risk of not meeting efficiency and productivity targets has financial and performance implications. SaskEnergy stresses accountability of results — whether it’s managing vacant positions, collaborating with other Saskatchewan Crown corporations or actively managing transportation cost pressures. In order to meet business plan targets, employees are engaged in compiling each business plan, while a leadership network reinforces accountability for efficiency and productivity targets by keeping them at the forefront of daily management of the Corporation. The result is a strong performance management system with the entire organization working toward business plan targets. Operational Compliance Operational risk results from the inability to achieve or maintain compliance with legislation, regulations, codes and standards. A proactive culture of compliance with current legislation and regulations pertinent to corporate governance, business functions and service delivery can mitigate operational risk. Legislative and regulatory compliance is an ongoing responsibility of the Board, Executive, employees and all contractors working for or at SaskEnergy. The Board, CEO and Executive team are committed to staying informed of changes in legislative and regulatory requirements as well as communicating and implementing such changes. Changes are monitored through industry association memberships, environmental assessments, participation in pipeline regulatory forums and through a management system that monitors act and regulation updates. Ongoing review and training ensures everyone has a clear understanding of their roles and responsibilities related to legislation, regulations, codes and standards. It is the responsibility of each individual to ensure that they comply and participate in regular, ongoing review of policies and procedures. Transportation and Delivery Rate Adjustment Transportation and delivery rates cover the operating costs SaskEnergy incurs to provide transportation, delivery and customer service to its natural gas customers. Operating costs have and will continue to rise related to transportation and storage, as the Province is now a net importer of natural gas; public safety requirements; plus rising interest and depreciation expenses due to increasing capital spending, resulting from provincial growth. These escalating operating costs may trigger rate increases that are seen as unacceptable or unmanageable from a customer’s perspective. While SaskEnergy cannot control or manage some third-party costs, through efficiency and productivity it can minimize the impact of rate changes on customers and pass the benefits on to customers. Transportation and delivery rate adjustments are managed through multi-year rate strategies, the annual business planning process, participation in regulatory forums, a strong relationship with the Saskatchewan Rate Review Panel and Shareholders as well as a strong Customer Dialogue process.



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