Management Discussion and Analysis
The following chart shows AECO natural gas prices:
AECO Monthly Index Historical Prices
$4.00
Limited Export Capicity from Alberta
Forward Price at June 30, 2021
$3.50
2015-Present Average Price $2.08/GJ
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
CONSOLIDATED FINANCIAL RESULTS Consolidated Net Income
Three months ended June 30,
(millions)
2021
2020
Change
Loss before unrealized market value adjustments
$
(5)
$
(4)
$
(1)
15
Impact of fair value adjustments Revaluation of natural gas in storage
8 4 8
7
-
(4)
$
10
Consolidated net income
$
$
2
The loss before unrealized market value adjustments in 2021 was consistent with 2020. This was a result of realized asset optimization margins improving in 2021, increasing transportation and storage revenue and additional distribution system customer capital contributions. This was fully offset by delivery revenue decreasing, employee benefit costs increasing and additional net finance expenses in 2021. Realized asset optimization margins improved in 2021 as a component of the Corporations transport capacity was secured through asset optimization contracts that expired in 2020 resulting in no impact in 2021. Transportation and Storage revenue increased in 2021 as domestic customers increased firm transportation contracting on receipt and delivery services. Higher distribution system customer connections and their related customer capital contributions were recognized in 2021 compared to the prior year. Employee benefit costs increased compared to the prior year as certain vacant positions were filled in key areas of the Corporation. Net finance expenses increased in 2021 as debt retirement fund earnings decreased and long term debt interest costs increased. Stronger natural gas market prices resulted in the price differential between contract prices and future market prices on commodity purchase contracts improving $0.20 per GJ in 2021 compared to 2020, resulting in a favourable fair value adjustment. In addition, as natural gas market prices continued to increase in 2021, natural gas in storage was recorded at weighted average cost, which was lower than net realizable value at June 30, 2021 and March 31, 2021. There was no revaluation of natural gas in storage and no impact on consolidated net income.
p.4
Made with FlippingBook Ebook Creator