Management’s Discussion and Analysis
service contract, the customer has a right to deliver or receive a specified quantity of gas on each day of the contract. With a firm contract, customers pay for the amount of capacity they have contracted for, whether they use it or not. Under an interruptible contract, customers may deliver or receive gas only when there is available capacity on the system and only pay receipt and delivery tolls when they deliver or receive gas.
Integral to the Corporation’s transmission system are several strategically located natural gas storage sites, which have the capacity to provide operational flexibility along with a reliable and competitive natural gas storage service.
Transportation and storage revenues of $130 million, for the six months ended September 30, 2025, are $7 million higher than the same period in 2024. An average rate increase of just over three per cent for transportation and storage services was implemented effective April 1, 2025, to address expansion of the transmission system and meet growing demand for natural gas services in Saskatchewan. Customer Capital Contributions The Corporation receives capital contributions from customers to offset the cost of constructing facilities to connect them to the transmission and distribution systems. Generally, contributions related to transmission system projects tend to be larger but less frequent than contributions related to the distribution system. The volume and magnitude of contribution revenue can vary significantly period-over-period, as numerous factors influence their receipt and recognition as revenue. Customer capital contributions were $21 million higher in 2025, resulting from the completion of a few significant transmission utility customers connections early in the year. Other Expenses SaskEnergy’s expenses are driven to a large degree by its investment in its transmission, distribution and storage systems. Depreciation and amortization expense, net finance expenses and Saskatchewan taxes are directly tied to the investment in facilities. As the level of investment in facilities increases, these expenses also increase. Employee benefit expenses, and operating and maintenance expenses, are also driven by the Corporation’s investment in facilities, although less directly. As the number of customers increases, infrastructure to serve those customers grows, and the costs to operate and maintain the system rise in correlation with the increasing kilometres of gas lines, number of service connections and amount of compression equipment. Additional regulatory requirements and changing public perceptions have resulted in accelerated prevention, detection and mitigation initiatives – adding pressure to transmission and storage, and delivery service rates.
Other expenses, net finance expenses and other net losses, as reported in the condensed consolidated financial statements, are as follows:
Three months ended September 30,
Six months ended September 30,
(millions)
2025
2024
Change
2025
2024
Change
Employee benefits
$
29 59 36
$
28 53 36
$
(1) (6)
$
62
$
60
$
(2)
Operating and maintenance Depreciation and amortization
116
102
(14)
-
71 12
69 11
(2) (1)
Saskatchewan taxes
7
6
(1) (8)
$ $ $
131 $
123
$ $ $
$ $ $
261 $
242
$ $ $
(19)
Net finance expenses
18
$ $
19
1
38
$ $
38
-
Other net losses
4
2
(2)
5
(2)
(7)
Employee Benefits Employee benefit costs are trending slightly higher in 2025 than 2024 levels as a result of inflationary wage and salary increases and a small increase in the number of full time equivalents as the Corporation was able to fill previously vacant positions.
8
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