Management’s Discussion and Analysis
Risk is the likelihood of a negative consequence, such as damage or loss of gas containment, occurring on the SaskEnergy system. These consequences typically include damage to infrastructure, environment, and potential harm to or loss of human life. Risk management spending decreased $3 million in 2022 as the Corporation’s investment in distribution system service upgrade and alteration programs returned to normal levels in 2022. The prior year’s approach was higher than normal as there was a return to regular public interactions with customers in 2021. Reliability of natural gas in service includes property purchases for corporate business and the enhancement and/or extension of the life of property through renovations, modifications and/or upgrades. These projects give customers a degree of confidence that natural gas demand will be met without failure or loss of service. Reliability of natural gas service spending increased in 2022 by $1 million as the Corporation’s investment level returned to normal levels in 2022 after having to reallocate resources from system integrity projects in 2021 to customer-focused service upgrade and alteration reliability projects in 2021, a result of a return to regular public interactions with customers in 2021. Business and technology optimization ensures that every investment in information technology, every resource allocated, and every application in development or production meets business goals and is comparable to the prior year. OUTLOOK SaskEnergy is entrusted with a key provincial asset in the natural gas transmission and distribution system and must ensure standards for safety and reliability are maintained. Safe and reliable service has always been a core priority for SaskEnergy and it will continue to be going forward. This is especially important now as the transition to cleaner energy may cause instability in other areas of the energy sector. The Corporation will continue to mature in the progress of addressing its emissions from operations and assisting customers in meeting their own sustainability goals. SaskEnergy recognizes customers are at the centre of its existence, and it is important to proactively anticipate customer needs and expectations. The Corporation is committed to making it easy for customers to interact, transact and receive service when and how they want it. Modest incremental growth is expected from SaskEnergy’s industrial customers in 2022-23, primarily in the value-added agricultural sector and from gas- fired power generation. The number of residential customers connecting to SaskEnergy’s distribution system is expected to be 3,000 new customers in 2022-23. However, customers continue to reduce their natural gas consumption by becoming more energy efficient, which results in little-to-no revenue growth from distribution utility customers. Continued focus on core operations and operational excellence will safeguard SaskEnergy’s financial strength into the future. In 2022-23, income from operations is projected to be $70 million, which is a decrease of $12 million from the 2021-22 result. The decrease is primarily due to the gain recognized as a result of the Corporation obtaining title to SaskEnergy’s head office building in 2021-22. Initiatives targeted to support emissions reductions from both internal operations and customer-focused initiatives also create cost pressure for SaskEnergy. The Corporation will achieve cost savings through business process improvements, leveraging technology, and collaboration with other Crown corporations and executive government. SaskEnergy is committed to providing solutions and service that benefit customers and Saskatchewan by leveraging the Corporation’s expertise and the province’s private sector. Throughout 2022-23, SaskEnergy will make $245 million in net capital investments in the province, including maintaining the safety and reliability of the natural gas transmission and distribution systems, meeting regulatory compliance, and optimizing the Corporation’s business systems.
13
Made with FlippingBook Ebook Creator