Management’s Discussion and Analysis
slightly higher in 2025 than the prior year as the Corporation continues its focus on cathodic protection, measurement and service replacement projects. Reliability of Natural Gas Service SaskEnergy’s network of transmission and distribution infrastructure requires regular monitoring and inspection, maintenance, upgrading and replacement to maintain service reliability for customers, avoid public safety incidents, and meet growing regulatory requirements. Recent years have also seen an increase in the cyber threat landscape and as a critical infrastructure operator, the Corporation has developed a robust Enterprise Security program that addresses both cyber and physical risks. This program requires continual improvement to mitigate risks and ensure secure systems for reliable operations. Reliability of natural gas in service includes enhancements, modifications or upgrades to facilities, ensuring that natural gas demand will be met without failure or loss of service. Reliability of natural gas service spending increased by $ 4 million in 2025, as the Corporation focuses investment on purchasing construction equipment, system improvement work on town border stations and network improvements. Business and Technology Optimization Business and technology optimization ensures that every investment in information technology, every resource allocated and every application in development or in production, meets the Corporation’s business goals. The 2025 year-to-date investment in business and technology optimization is $2 million higher than 2024 and focused on the work management system upgrade project, which centers on work management business processes, foundational core systems integrations, and execution of ongoing enhancements. Outlook Safe, reliable, and affordable energy is crucial for the prosperity of Saskatchewan’s people, businesses, and industries. Addressing the impacts of inflation while continuing to provide affordable energy is increasingly challenging. Upholding the integrity and reliability of our system, expanding to meet our customers’ growing needs, and enhancing customer service is essential for SaskEnergy’s present and future success. These goals are supported by both operational efforts as well as our substantial capital investment program. Expectations for natural gas demand growth in 2025-26 remain consistent with recent years reflecting a modest increase from the growing industrial and power generation sectors. Meanwhile, the number of new customers connecting to SaskEnergy’s distribution system is expected to remain similar to recent years at around 3,000 in 2025-26. As a result, overall distribution and transmission revenue growth is expected to be small, absent the effect of the transportation and storage rate changes from April 1, 2025. Overall, lower earnings are forecasted in 2025-26 than the prior year as asset optimization margins are expected to moderate due to changing market opportunities, and the modest revenue growth noted above is surpassed by increased operating costs. Affordability remains a top priority for SaskEnergy and its focus on operational excellence will look to offset that cost growth as much as possible.
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