SASKENERGY 2017-18 ANNUAL REPORT
18. COMMITMENTS AND CONTINGENCIES a. Commitments As at March 31, 2018, the Corporation had $83 million (2017 - $77 million) of outstanding contractual commitments for the procurement of goods and services in the future. During the period, the Corporation entered into commodity contracts for the physical purchase of natural gas that qualify as own-use contracts. As at March 31, 2018, own-use natural gas derivative instruments had the following notional values and maturities for the next five fiscal years:
(millions)
2019
2020
2021
2022
2023
Total
OWN-USE PHYSICAL NATURAL GAS CONTRACTS Notional value
(49) $
(278)
$
(46) $
(60) $
(64) $
(59) $
Notional value – estimated undiscounted net cash outflow
b. Contingencies The Corporation is involved in litigation in relation to a natural gas incident that occurred in 2014 in the community of Regina Beach, Saskatchewan. The Corporation does not expect the outcomes to result in any material financial impact.
19. UNREALIZED MARKET VALUE ADJUSTMENTS
(millions)
2018
2017
$
46 (12)
Change in fair value of natural gas derivative instruments Change in revaluation of natural gas in storage to net realizable value
$
63 13 76
$
34 $
Unrealized market value adjustments represent the net income impact of measuring certain financial and derivative instruments at fair value subsequent to initial recognition (Note 9) and measuring natural gas in storage at the lower of weighted average cost and net realizable value (Note 6). These adjustments represent the change in the carrying amount of the related item during the period and are dependent on the market prices and expected delivery dates at the end of the reporting period.
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