SASKENERGY 2018-19 ANNUAL REPORT
Delivery Revenue Delivery revenue is driven by the number of customers and the amount of natural gas they consume. As residential and commercial customers consume natural gas primarily as heating fuel, weather is the external factor that most affects delivery revenue. The weather in 2018-19 was 10 per cent colder than normal, and five per cent colder than 2017-18. The colder weather and distribution system growth were the primary drivers contributing to delivery revenue of $289 million for the 12 months ending March 31, 2019, which was $18 million higher than the 12-month period ending March 31, 2018. The Corporation added 2,775 customers through the 12 months of 2018-19, which was lower than the 3,706 customers added during the previous fiscal period. The addition of new customers is estimated to have contributed an additional $4 million of revenue in 2018-19. A 3.6 per cent delivery rate increase, effective November 1, 2017, also contributed to the favourable variance. Delivery rate increases are implemented to address growing capital and operating costs incurred to continue providing high quality, safe and reliable service to customers. In alignment with the Crown Sector Strategic Priorities, the Corporation continues to focus on providing the province’s growing population with efficient and timely access to natural gas service while keeping rates competitive. Transportation and Storage Revenue The Corporation generates transportation revenue by receiving gas from customers at various receipt points in Saskatchewan and Alberta, and delivering natural gas to customers at various delivery points in the province. The transportation toll structure consists of a receipt service charge that customers pay when they put gas on to the natural gas transportation system, and a delivery service charge, which customers pay when they take delivery off of the natural gas transportation system. Gas delivered to the system by customers is considered to be part of the TransGas Energy Pool (a notional point where producers, marketers and end users can match supplies to demand) until it is delivered to the end-use customer. For receipt and delivery services, the Corporation offers both firm and interruptible transportation. Under a firm service contract, the customer has a right to deliver or receive a specified quantity of gas on each day of the contract. With a firm contract, customers pay for the amount of capacity they have contracted for whether
Adopting IFRS 15 Revenue from Contracts with Customers resulted in a reallocation of delivery revenue. The effect of adopting IFRS 15 created a decrease of $1 million in delivery revenue for the period ending March 31, 2019 due to a higher amount of the SaskEnergy customer capital contribution discount being allocated to the specific delivery revenue contract components. Refer to consolidated financial statement Note 3 for additional details.
DELIVERY REVENUE
7000
$350
6000
$300 $250
5000
$200
4000
$150
3000
2000 1000
$100
$50
$0
0 Mar 2016 Mar 2017 Mar 2018 Mar 2019 12 months ending
Dec 2014
Delivery Revenue
Heating Degree Days
they use it or not. Under an interruptible contract, customers may deliver or receive gas only when there is available capacity on the system and pay receipt and delivery tolls when they deliver or receive gas.
TRANSPORTATION AND STORAGE REVENUE
$180 $160 $140 $100 $120
350 400 450 300 250 150 200 100 50 0
$80 $60 $40 $20 $0
Mar 2016 Mar 2017 Mar 2018 Mar 2019
Dec 2014
12 months ending
Transportation & Storage Revenue
Transmission Volumes
27
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