Employee Benefits
Employee benefit costs of $47 million were $4 million higher for the six months ended September 30, 2020 compared to the same period in the prior year, as vacant positions in strategic areas of the business have been filled to continue to meet the Corporation’s current and future business needs. Ongoing efficiency efforts and management of planned overtime and vacancies resulted in a reduction of full time equivalents in other areas partially offsetting these increases.
Operating and Maintenance
Operating and maintenance costs of $77 million for the six months ended September 30, 2020 are $1 million higher than the same period in 2019-20. Higher transportation contracted by the Corporation on TC Energy’s transportation system increased operating and maintenance expenses by $2 million in 2020-21 compared to 2019- 20. Growing demand for imported natural gas from Alberta is resulting in more natural gas being transported and over greater distances. In addition, the provision for bad debts increased $1 million and carbon tax payments are $1 million higher in 2020 compared to 2019. The provision for bad debt increased in 2020 as Saskatchewan’s unemployment rate increased, a result of the impact of COVID-19 and a subsequent economic downturn causing higher expected credit losses. SaskEnergy was able to partially mitigate the impact of increased costs through continued efficiency efforts of $3 million resulting from reducing contracts and consulting, sustenance and vehicle costs in 2020 compared to 2019.
Depreciation and Amortization
Balancing safety and system integrity with the growing demand for service continues through 2020-21. Strategic capital investments required to ensure the necessary infrastructure is in place to meet increasing load growth, has increased the capital asset base from the previous year, resulting in increased depreciation and amortization. For the six months ended September 30, 2020, depreciation and amortization was $57 million, which was $4 million higher than the same period in 2019-20.
Net Finance Expense
Net finance expenses were $27 million for the six months ended September 30, 2020 as higher debt retirement fund earnings and lower short-term debt interest expense was fully offset by higher long-term debt interest expense.
2020-21 Second Quarter Report
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