SASKENERGY 2017-18 ANNUAL REPORT
Delivery Revenue Delivery revenue is driven by the number of customers and the amount of 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. The weather in 2017-18 was five per cent colder than normal, but 12 per cent colder than 2016-17, which was a warmer than normal year. The colder weather and distribution system growth were the primary drivers contributing to delivery revenue of $271 million for the 12 months ending March 31, 2018, which was $31 million higher than the 12-month period ending March 31, 2017. The Corporation added 3,706 customers through the 12 months of 2017-18, which was less than the 4,000 customers added during the previous fiscal period; however, the addition of new customers is estimated to have contributed an additional $3 million of revenue in the current year. A 3.6 per cent rate increase in 2017-18 and an 8.6 per cent increase in 2016-17 also contributed to the favourable variance. Delivery rate increases are implemented to address growing capital and operating costs incurred to continue providing high quality, safe and reliable service to customers. In alignment with the Crown Sector Strategic Priorities, the Corporation continues to focus on providing the province’s growing population with efficient and timely access to natural gas service while keeping rates competitive. DELIVERY REVENUE
charge that customers pay when they put gas on to the pipeline transportation system, and a delivery service charge, which customers pay when they take delivery off of the pipeline transportation system. Gas delivered to the system by customers is considered to be part of the TransGas Energy Pool (a notional point where producers, marketers and end users can match supplies to demand) until it is delivered to the end-use customer. For receipt and delivery services, 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. 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 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 revenue was $137 million for the 12 months ending March 31, 2018, $3 million higher than in 2016-17. Industrial customer and power generation related load growth continues to increase demand for natural gas within the province and is driving higher transportation revenue. Transportation revenue rates remain unchanged since January 1, 2016. Storage revenue is down slightly compared to the previous year due to a continuing decline in the contracted demand for storage services. The apparent abundance of natural gas, coupled with small or even negative differentials between current and forward gas prices, limits the demand for natural gas storage to those customers with relatively low load factors who use the service to mitigate receipt transportation charges. TRANSPORTATION AND STORAGE REVENUE
5000 4000 2000 3000 1000 0 6000 7000
$300
$250 $200 $100 $150
$50 $0
$100 $80 $120 $140 $160
250 200 100 150 300 350 400
12 months ending
Heating Degree Days
Delivery Revenue ($ millions)
$20 $0 $40 $60
Transportation and Storage Revenue The Corporation generates transportation revenue by receiving gas from customers at various receipt points in Saskatchewan and Alberta, and delivering natural gas to customers at various delivery points in the province. The transportation toll structure consists of a receipt service
50 0
12 months ending
Transmission Volumes
Transportation & Storage Revenue ($ Millions)
30
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