MANAGEMENT’S DISCUSSION AND ANALYSIS
ACHIEVING GROWTH SaskEnergy’s growth strategy continues to build on the foundation of its core businesses of transmission, distribution and storage services to support a growing residential, commercial and industrial customer base. In addition, the Corporation seeks new opportunities to
facilitate provincial economic growth through partnerships and technology developments. The measures within the mandate of Achieving Growth represent the Corporation’s commitment to facilitating growth in Saskatchewan.
March 31, 2017 Actual
March 31, 2018 Actual
March 31, 2018 Target
March 31, 2019 Target
March 31, 2020 Target
March 31, 2021 Target
March 31, 2022 Target
Strategic Measure Business Growth Investment Core Growth – SaskEnergy and TransGas Revenue Growth Diversified Non-Core Business Return on Non-Core Assets Total Capital Investment (millions) Percentage of Third-Party Capital Investment Associated Gas Capture as a Percentage of 2014 Saskatchewan Sourced Volume
1.5%
2.9%
2.1% 3.0% 3.0% 3.0% 3.0%
(5.5%)
1%
(1.4%)
(1.0%)
1.5% 4.9% 11.2%
$2.7
$5.9
$12.7
$41.0
$15.6
$6.8
$3.2
6%
2%
20% 59% 41%
2%
0%
31%
31%
35% 36% 36% 37% 37%
Business Growth Investment The Core Growth 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 prior years, it was the growth in the provincial economy that directly contributed to a larger distribution customer base and greater demand for natural gas from industrial facilities. In 2017-18, the distribution utility increased its active customer base by 3,706 customers (4,000 customers in 2016-17) and the transmission utility increased provincial load by 2.3 per cent from 2016-17. The slowdown in provincial growth continued to impact the rate of growth in the Corporation’s utility businesses in 2017-18 as reflected in the result for the Core Growth metric.
Diversified Non-Core Business The Non-Core Business measures reflect the value of developing new revenue streams within the commodity and unregulated business environment. Efforts in this area have historically created a wider revenue base; however, the low natural gas price environment and a general lack of optimism in forward pricing of the natural gas commodity have limited opportunities in recent years. The Return on Non-Core Assets metric tracks the return earned by the Corporation from its investment in non-core assets. The lack of optimism in future gas prices resulted in further write-downs of the Corporation’s natural gas storage assets in Bayhurst, negatively impacting this metric.
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