Management’s Discussion and Analysis
The commodity sales to customers, as reported in the condensed consolidated financial statements, was as follows:
Three months ended June 30,
(millions)
2025
2024
Change
Commodity sales
$
25 20
$
26 20
$
(1)
Commodity purchases
-
Realized margin on commodity sales Unrealized fair value adjustments
5
6
(1) (2) (3)
(7) (2)
(5)
Margin on commodity sales
$
$
1
$
The realized margin on commodity sales excludes the impact of unrealized fair value adjustments on derivative instruments. These adjustments can fluctuate significantly from one period to the next and do not necessarily represent the amount that will be paid upon settlement of the related natural gas contract. The Corporation’s realized margin on commodity sales for the three months ended June 30, 2025, was $1 million lower than in 2024, primarily resulting from sales volumes lower than the same three months in the prior year, due much warmer weather year over year. The commodity margin was largely unchanged from the prior year with both sales prices and cost of gas resulting in a margin of $0.67 per GJ through 2025 compared to $0.66 per GJ margin in 2024. However, as May 2025 was 31 per cent warmer than normal, sales volumes were down during the quarter compared to the prior year. The GCVA balance was $11 million owing to customers at June 30, 2025, which equals the balance at March 31, 2025 — as the market price of natural gas continues to keep the cost of gas lower than anticipated, maintaining the balance owed to customers in the short term. Commodity Fair Value Adjustments For the three months ending June 30, 2025, the fair value adjustment on commodity derivative instruments decreased the margin on commodity sales by $7 million. The unfavourable price differential of $0.17 per GJ between contract prices and market prices on future commodity purchase contracts at March 31, 2025, further declined $0.31 per GJ, to an unfavourable price differential of $0.48 per GJ at June 30, 2025. SaskEnergy segregates a portion of its natural gas purchase contracts for gas that will ultimately be sold to commodity customers. Under IFRS Accounting Standards, such own-use contracts are not required to be reported at market value. Asset Optimization Margin SaskEnergy uses its access to natural gas markets to execute purchases and sales of natural gas to generate margins. By utilizing off-peak transportation and storage capacity, SaskEnergy is able to find opportunities in the market to take advantage of pricing differentials between transportation hubs, delivery points and time periods. In most cases, the Corporation executes purchase and sales contracts at the same time, thereby mitigating much of the price risk that would normally be associated with such transactions. SaskEnergy also uses purchases and sales of natural gas to mitigate transportation constraints, which are executed at a cost. The asset optimization margin, as reported in the condensed consolidated financial statements, was as follows:
Three months ended June 30,
(millions)
2025
2024
Change
Asset optimization sales
$
33 27
$
13 12
$
20 15
Asset optimization purchases
Realized margin on asset optimization sales Unrealized fair value adjustments Revaluation of natural gas in storage
6 1
1 2
5
(1)
-
(1)
1 5
Margin on asset optimization sales
$
7
$
2
$
The realized margin on asset optimization sales for the three months ended June 30, 2025, which removes fair value adjustments on derivative instruments and the revaluation of natural gas in storage, totaled $6 million for the quarter,
6
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